This Week in Startups - Creating a new venture fund: formation, follow-on strategies & more with Acquired | E1258

Episode Date: August 3, 2021

Ben Gilbert & David Rosenthal from Acquired join to discuss David's new venture fund Kindergarten Ventures (00:56), how to structure a VC fund (12:16), Jason's super pro-rata strategy (30:17), podcasting (35:50), and they tease the next episode on "The Mount Rushmore of Venture Capital" (56:11) & more!

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Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. All right, everybody, welcome to another episode of this week in startups. It's our crossover episode with our friends at the Acquired podcast. Ben Gilbert and David Rosenthal are with us. Again, they co-host Acquired.fm. Ben, of course, is the co-founder of Pioneer Square Labs, PSL, Ventures, and David Rosenthal is an independent angel investor startup advisor. Boys, welcome back to the program. Thanks for having us.

I've actually been, you've been browbeaten me so much over the past year. I have a small, small little angel fund now. What? I'm following in your footsteps. Nicely done. Is this a rolling fund, may I ask? No, it's not. It's a traditional fund.

I thought about the rolling fund. I think we discussed this last time. Decided to start small. Okay. What is the footprint of the fund? It's trying to go for 10 or 20 or 5. What are you thinking? Micro.

Micro. Very micro. So a couple of million bucks. A couple million bucks, yeah. Perfect. And so then you want to try to do 30 and investments of 2550k, 100K, something in that range? Yeah, like, yeah, 100K-ish.

30-k. And you got to hit 30 investments? Is that the portfolio concept? Yeah, 20 to 40 is the plan. 20 to 40 at 100-K. Do it in a year. No reserves. See how it goes.

Got it. So this is like my first preschool, you know, that toy series, my folks record. Yeah, that's exactly. We're calling it. This is my first fun. This is my first fun. It's actually. What are you calling it?

The name is kindergarten ventures. Perfect. So this is going to be your test. Now, the problem with such a small fund historically is that you, David, are not going to have a lot of fees to live off of. Even if you got 3% on $3 million, it's only 90K a year. So how are you going to survive in terms of fees? What are you thinking of fee structure? Well, that's why it's a good thing that I have the acquired podcast with Ben.

And my partner in this in kindergarten, Nat Manning is the COO of a company called Kettle. So he's full-time founder. And so, yeah, this is for our deal flow on the side. Love it. This is a great way to start off. You have other revenue sources. And as people know, my first fund, I just did a 20% carry and no fees. Yeah, and we're not taking fees.

It's, A, because we didn't think it's right because we're both full-time on other things. And B, because, like, what are we going to do with the money anyway? But you should, any legal fees. fees or accounting or something you can put against it, but you're not taking management fees. And that's, I did that on my first one as well. And that fund had Com and, uh, Robin Hood in it. So haven't heard of them. Congratulations, by the way. I, I think that fund, yeah, it's, it's, it's, it's, it'll be a day for you yesterday. You know, in a way, except I don't plan on selling Robin Hood shares for a decade personally. I will distribute the shares at some point to our LPs when our lockups

up, but I don't see a case for me wanting to sell those shares when the company's only worth 30 billion. It's got 22 million active users. I don't know how you all feel about it. So you're not like feeling a take the win, you know, lock it in. Heck no. I mean, think about the last double up. The last two double ups in this game are so material. Oh. We preach about this on Acquired all the freaking time. This is the mistake the Sequo learned with their Apple investment. They sold their Apple investment for $6 million total. They owned like 20% of the company.

Makes no sense. You want to ride your winners, as we've been saying, on the All In podcast a bunch, and it's time in market, not timing the market. I could see, I know this sounds crazy to folks, I could see some of this cohort that came out in the last, you know, group of decaorns. Coinbase, you know, because I do think crypto is going to be around for a while.

I could see Coinbase, Airbnb, Uber, DoorDash. I could have seen Slack and certainly Robin Hood. I could see all of those having a 10 to 20X in them. Yeah. There's a great, well, this is perfect for the theme, the meat of the episode in a little bit that we'll get into. Yeah, it is actually. If you were to look at that cohort, Ben,

oh, Ben, what do you think of? David's plan? It's a great plan. I mean, why is it a good plan? What advice do you have for him? Well, there's so much opportunity

just in the like acquired slack alone from people pinging him and like pinging both of us and being like, hey, I'm starting to start up. What do you think? I really like the pod that, you know, it's a shame.

David hasn't had firepower until now to take advantage of it. So I love the strategy. I also love, I'm a proud investor myself. And I ask, David. A little 2550 in there? Put a little 2550.

Maybe a little sub that. I'm early on the journey, but I asked David, what, what can you promise me? Like, what's, you know, what kind of reporting are you going to send me and what's my portfolio construction going to look like and portfolio construction going to look like? And, you know, what stage are you playing at? And he just laughed at me. And he was like, yeah, I mean, I'll let you know when there's returns. So I like the light lift that he's got going on.

I like that as well. Now, to be an LP in a fund, I do think there's two, you know, putting aside returns, we're going to be pretty sure David's going to get good returns. He's got great deal flow. He's established in the industry. Anybody who's a startup that wants to get $25.50K would be, you know, wise to take his money. I think that's a no-brainer or even 100, but you're going to add a lot to it. But I do think thinking about when you're an LP in a fund, I'm in 20 funds or so,

and I can't be in anymore. But I am thinking about being in this one. And the way I would think about it is, are you going to let us know about the deals in real time as you do them in one of these micro funds, David? Yeah. So the plan is yes. We're still just getting up and running. I've been thinking about setting up a private channel in the Acquired Slack for,

and just putting all kindergarten folks in their LPs, our founders. I'm in. If you do it, I'm in for that. I'll put in 25 if you do it. do that. Great. 25 pay to get access to the Slack channel. Well, I already have access to Slack channel. I'm a paying member of Acquired FM, but I'm thinking if you do a deal and you're putting

25 in, maybe that's just, you know, good signal for me for a downstream syndicate investment. Great. Downstream or current, right? Like, it could be current. Yeah, sure. But, you know, I'm going to assume some of those rounds might be closing up quickly and maybe I don't get into them, but, you know. Well, so that's what I was thinking is like, yeah, things are going on.

We post about it in the Slack like, okay, and then with the founders you're in there and And our LPs are probably the largest group of LPs is GPs, other venture firms. And then we've got other great folks in there. That was Mark and Dresen's plan. He was in our first fund. He was in my first fund. And he came out of nowhere and he's like, oh, I heard you're raising a fund. I was like, would you hear that from?

He's like, ah, you know, I'm Mark and Drison. And he's like, I'll put 50K in. And then I kicked him out of the second fund or didn't invite him back because I invited him on the podcast. And he's like, yeah, no, I'm not going to make it. And then his PR people were like, oh, well, you can have all these other people in the podcast. And I was like, no.

Mark should come do a keynote at the event. And then Mark was like, do I have to be on your podcast and come to your events and do keynotes in order to be in business video? And I just wrote back one word. Yes. And then that was the head of our- You should want to be on my podcast. Well, I was just like, you know what?

You're being a jerk for no reason. And you're on everybody else's podcast. You know, you're on Panda, which is trashing you constantly. You know, like, if you're on Panda.com or whatever, like, come on my podcast. Like it's, you know. I question for you, by the way. And that's where all the acrimony comes from with me and Mark. What is the origin of the twist name, This Weekend Startups?

So I was on This Week in Tech with Leo Lipport. Yep, because that's what I was wondering. I asked him, hey, can I use the name to do This Week in Start Us? Because I was only able to be on, you know, it was very hard to get a slot on This Weekend Tack. And I would be on one out of every four or five episodes. and I was trying to be on more because I was trying to pick my profile, but it was just like Kevin Rose was on and, you know, all these famous people were on at the time.

And I was like, hey, you know, I want to talk about startups more because it was this weekend tech. It was more about the new iPhone and whatever. And he was like, yeah, go for it. And then I started doing other this weekends and that kind of pissed him off a little bit, but we worked it out. We hashed it out. Nice.

Because I was wondering Ben and I were actually talking about this. Why? At this point, shouldn't you just call this Jason Calacana show? 100%. Yeah. I mean, at some point. But I, you know, I kind of like my legacy of this week in startups.

But yeah, I'm doing it four days a week, five days a week. So it's kind of the Jason Caligana show. I guess. Yeah, I'll take that under advisement. And it's where I go to get my, you know, direct drip of Jason. Because what I'm listening to All In, you know, your boys are kind of trashing you a little bit. They're taking the mic. They're running with it.

They talk too long. And then you try and talk. and someone's like, oh, pass the ball, pass the ball. Why can't you learn to pass the ball? So it's nice to have the straight stuff. Thank you for that. It's actually made it easier. Now that I'm doing four or five days a week on this show,

you know, when I'm doing an interview with somebody, I don't need to interject as much because people got their fill of Jason from when I do the news up front and then I do the interview on most episodes. And then on all in, I'm just like, you know what? I'm just the point guard. I don't need to shoot. I'm just a pass first point guard. and if I get some reps in, fine, but you know, you're going to get enough of me from that.

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When you're ready to launch, use the Overcoat Twist and save 10% off your first purchase of a website or domain. And congratulations for the team going public by direct listing on May 19th. What an amazing journey it's been. Congratulations again. Okay. Let's get back to this amazing episode. So what other advice do you have for David, Ben, when he goes out on this road and tries to make the small bets?

What should he do with his pro rata? Should he fight to get pro rata deals? No. Should he do follow on? No. I don't think. No, because look, I think getting pro rata in writing for a fund of that size seems a little bit silly to me. I think having like handshake agreements with the founders,

where you stay really close with them, you legitimately help the company during that round, and then you're there when the next round comes together. For if it's an investment out of this fund or an SPV or whatever, like it seems to make way more sense to me than, especially for checks at this size. I am going to somewhat agree, somewhat disagree. I agree that with the small checks,

you're going to have a hard time in 2021 getting prorata for a 2550K check. Most of the time that's going to happen at what? 250 in a seed round. You get pro rata, 250k. You'd be a major investor in a one or two million If you're lucky. Yeah. But I only do deals when I have pro rata. That's my, I would say 99 out of 100 now we have it. Very, but you're a large, much larger fund and your initial check sizes are much larger, right? Bigger check sizes, yeah. Yeah. And do you always actually get it? Like, even if it's in the docs or does, do people ask you to waive it at a future financing? I am of the, I tell everybody up front, the founders, we plan on taking it forever.

And we plan on keeping our board seat forever if we own over 5 or 10% of the company. I mean, you're doing this at a way different scale. You know what? I started at exactly your scale. So I would anticipate you would be doing it at my scale in five years. And you should actually be preparing for that reality. And so, you know, if you do get 50K into the next, you know, Robin Hood, you, I think asking for the pro rata in a nice way, if they will give you a side letter with it, is well worth your time.

I would ask every time. And if you get it one out of three, and the way I would signal it to the founders is, I just want to be able to place a bigger bet down the road with my syndicate and my LPs, and we will pop up an SPV. So do you have an SPV strategy for this yet, David? Yeah, yeah. Explain it. That's the whole strategy. Is to what?

Oh, is that for follow-ons when, when, it's a great follow-on opportunity, and the founder wants us in that we do at SPPs, not out of the fund. Fund's too small. Perfect. So that is the model I pioneered. And you should totally work on because, and where are you going to do those SPVs? Using Ashore, you're using Angel List? Angelist.

They're managing the fund. Oh, they're managing the fund. What does that cost, like 100 grand to set up the fund? No, no upfront cost. It's 1% or, I think it's 1% or either 20 or 25K a year, whichever is smaller. Oh, that's a nice way to do it. So 1% or 25K, which in a $3 million fund would be basically the same thing. So for 10 years, 30K a year would be 300,000 if the fund exists that long.

If the fund exists that long. Other services are 100K, I think, and 10K a year. So it winds up being about the same. Yep. It was just easy. Do the SBVs come for free with that? I believe they do. If you're doing individual SPVs, I think Angelist is what, like 8, 10K and SPVs.

Basically 10K and SPV and then 5K in wiring fees. Blue Sky fees is, you know, the potential on top of that. So I do think it's very interesting the way you're constructing it. Using Angelus is a great way to do it. Yeah. Question for you. I would love to actually your advice on a specific piece of it. So I'm thinking we're going to do a lot of seed and I've been doing most probably half of what I've been doing over the past year, year and a half as an angel has been seed.

But, you know, we have such great companies and, folks on the pod and in the ecosystem. I've also been doing some A's, B, C's, you know, just like small checks, personally participating. I'm thinking we'll have some great opportunities for that for the fund, too. What do you do when you see stuff like that? Well, we are doing increasingly series A's and series B is when we can get into them. And so we'll do a 50, we'll do a new investment in a 50 to 200 million dollar round.

It has happened. That's not our bread and butter, though. I think what I learned over my 10-year journey, which you're basically starting exactly where I started, which is you got a podcast, you got the audience, you got the brand. What I quickly realized was the amount of work it takes to put in 25 or 50K is the same amount of work as putting in 3 million. Yeah.

And the amount of work you're going to put into it over time is going to be the same. So the quicker you can get to a large, dollar amount put in and to 10 to 20% ownership in the winners, the better you're going to do. And when I went out with my second fund and my third fund to meet with the top, top, top, top, top, top LPs in the world, literally the top endowments. I got meetings with every single one in their office with the top person, right? Because I got a good brand and I was able to, you know, get those intros, etc. The thing they obsessed over was my ownership percentage of me being a solo GP. and I told them like, well, I'm going to be a solo GP.

So if you don't like that, what if you get hit by a car? I'm like, the fun wraps up. That's it. And, you know, a lot of people passed. Most people passed, obviously. And they couldn't get their head around the solo GP thing. And I was like, that's fine. I don't need you.

What year was this? This would be 2016 to 2019 window. Yeah. I was just a weird beast. They couldn't understand. The pioneer, I think, is the right. Okay, sure. Yeah, you know, not for me to say.

But in a way, like if you were, yeah, of course, like for me, like, you know, it's not for me to say. But sure, yeah. We'll say. We'll say. No, it never reminds me of the scene in, uh, get him to the Greek where they're like calling Russell Brand's character. Like, you know, it's like, he's like, yeah, you know, I sort of was going for with this African child of music video and this theme album, like kind of a Jesus, like an electric

Jesus. I mean, it's not for me to say I'm Jesus, but it's sort of, it basically compared himself to Jesus. Oh, he's so funny. Absolutely no self-awareness as a rock star. It was pretty great. But that was my big learning. And then they were like, what's your fault?

All they wanted to know about was pro rata, follow on, etc. And I said, these are the large institutional LPs. And the reason they're asking that, Ben, is what? Why are they asking that question, Ben? Well, at the end of the day, this is not just a hits-driven business. this is like a Grand Slam driven business. And so to the extent that you are in one of the few companies that will matter this decade on an enduring global scale,

it's about owning as much of those companies as you possibly can. 100% correct. They believe, they don't believe in spray and prey. They believe in hitting an outlier, the grand slam of grand slams and 10xing on that. So that's how they, make money is when they get into an Uber, WhatsApp, or whatever, where they're in a fund that gets into one of those with a meaningful percentage. That actually moves the deal for them. And they're dealing

with so much capital. You know, you're the Harvard endowment. You got 50 billion under management. Like, you need a lot to move the needle. Well, they, I think a lot of them are moving to a minimum of a $50 million check size for funds. That's like they're tiny. And I was doing a $44 million. I did a $44 million fund for a third fund. And then I realized, like, I don't really need them anymore because I can email my syndicate with 8,300 members and have whatever, 20, 30, 40 million dollar fund popped up without doing any meetings. And then every time we do a syndicate deal, it does five times whatever the funds investment was.

So we did 12 syndicate deals in June. We're on track to do 150 investments this year and put over $100 million to work. So even though I have a $44 million fund, I'm actually putting $100 million to work, which is sort of like being a GP with a $300 million fund. Are you leading in most things that you're doing? Most things now. Most things, yeah. Leading or leading, co-leading is probably the big thing now.

See, that's the big question I have. We're going to have to see how things evolved. You know, I've been, I was an institutional VC for over a decade. All I did was lead. And it's been so nice, not leading and following. And so the strategy here is follow. And we'll see how that goes. What you really want to do is hit one and then offer it to your L,

get a bigger allocation in all cases. So you find one you love, you're putting 50K in, ask them if they would be okay. with you syndicating to your top LPs and friends, another 250 and see what they say. I did that for Com and exactly those numbers. It was the first DL on Angelus from a syndicate was Com, and that was my first syndicate.

And I put 50K in. The syndicate came in for $328,000. Oh, nice. About $378,000, about 6% of Calm, which is a $2 billion plus return. It's $120 billion position. It's the biggest return. We did a little pro rata.

but we actually were able to sell some in secondary twice along that journey to book some wins. So we still have 80% of our shares. And it's the biggest return in the history of Angel's, although because Angelist and I don't have a good relationship anymore, they never talk about that, I think. But I have the number one syndicate in the world, no longer an Angelist, and I have the number one return in the history of Angel's. No return comes anywhere close to come. We're not saying you, Jesus, but it's not for you. It's not for me to say. Not for me to say.

But you should get on the SPV train immediately and say, if I could come up with, you know, 20 more people who put in 20K, would you be up for that? And just start that now because you're eventually going to get there and everybody's going to want you to put more money in. And, you know, Dave and Rosenthal is a brand. They're going to want you to have more on the cap table. Just give the founders what they want. Give your LPs what they want. And what happens if you have a conference. And you put 50K in from your fund, great.

It goes 400X. It becomes a $20 million position, whatever it is. Fantastic. But you could have put the other, $328,000 in, and that goes $400X. And then you got another $100 million behind it in returns. Maron. That's what you're going for here. We had Ho Nam from Altos Ventures on for like a special episode of Acquired, what, two months

ago, David? And Ho has this perspective where Altos is unique in this way. his comment is seed investing is the greatest discovery mechanism of all time. And they really, like, it's not a secret, but really their strategy is actually they're a growth investor, but they only growth invest in their own fund. And their seed, you know, their fund, their early stage first check exists as a discovery mechanism to be able to better evaluate and better underwrite companies than the market could. So they know when to pile the huge dollars in.

Correct. information advantage away. 100%. You cannot trade on insider information in public markets. And that's all we trade on in private. In private markets, correct? Yep. Like literally, everything is insider trading in a private market.

And you know, the funny thing about the Alto's story and Ho and his partners is, you would think like it's so smart and it's what we do. And you would think the institutional LP community would love it. It took them decades. to get the institutional LP community comfortable with what they're doing. To your point, you know, Jason, about like, they're very conservative. Even if something makes sense and it's logical, if it's different than the way things are classically done, it's very difficult to get people on board because it's new.

It's unproven. It might be better, but I do know the other thing works. Maybe not perfectly, but it works. So I'm going to keep doing the other thing. All around the world, tech companies are innovating and driving returns for investors. Well, Our Crowd analyzes tech companies across the global private market, selects the ones with the greatest growth potential, and they bring them to you. From personalized medicine to cybersecurity, to robotics, to quantum computing, and more.

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the more i watch what's happened i realize i came to this realization the other day because I was like, I spent so much time on these big LPs and they don't appreciate me. They don't understand what I'm doing. They don't appreciate me. And then I've, you know, at the time I had whatever, 800 people in my syndicate

when I left Angelist. I wrote the book. Now it's at 8300. So it's 10xed. And I'm doing 12 deals a month. I mean, I'm doing more deals. Oh, you're like a little Tiger Global over here. Well, you know, what happens is

to exactly your point about, about Honam at Altos, we have 65 of our 325 portfolio companies raising money right now. I literally had to take Emmy or Waterbury producer Jackie off of the accelerator, and I said, I know you want to do four more accelerator classes this year. Do one and then spend the rest of the time working with the 65 companies in our portfolio actively raising. Wow. 65.

I mean, think about the scale of this, Ben. we would normally have a dozen companies. And you know what happens when your companies are raising. They need introductions. Oh, yeah. That's actually the biggest choke point for a firm is that when companies are going. So, okay, let me take a step back. VCs can be valuable in lots of ways.

The way in which they are the most valuable is helping you raise your next round in the best way possible from the best investors with the best terms in the shortest timeframe, or at least a time frame that is reasonable to help the company go back to building. 100%. Perfectly said. So when 65 of your companies are doing that concurrently, I don't know how you also do a podcast because, oh my God, you are stretched thin.

I mean, we literally had to say to everybody, tell us, you know, like fill out this form if you're raising, essentially. And then I just had to put Jackie on it for 80% of our time to just, I told her every day, check in with 20 of the 65. Where's your fundraising at? So, you know, literally Monday, check in with 1520, Tuesday check in with 10, 50. and let's keep this conversation going with them because some of them are going to fail

and then some of them want us to lead and in some cases we want to lead. So this is, I think, David, the tip I'll give you is we require a monthly update in our side letter which I'm not going to give any, there was a profile written about me and maybe some of the controversial terms in my side letter.

I'm not going to give it any juice here because it was so poorly written. But you guys read it, I'm sure. And there were a couple of controversial things in there. One was that I require a monthly update. We require a monthly update. We've never sued a founder for not sending one. And we're happy to get four a year. What we do is we take the data, we put it into a spreadsheet. My team tells me, hey, J-Cal, these three companies doubled revenue in the last four months. What do you think? And I go to those companies and say,

hey, would you like a million dollars at a $20 million valuation? We'll do a syndicate. Fund we'll put in 150K. We syndicate 850 and we're done. Wow. And so that is the big tip is you have that information advantage. Given unsolicited offer, you know where I got that from? I've been thinking about this. I didn't realize that you were at this point.

Who did I steal that from? Well, Sequoia started that. Yes, with WhatsApp. Yep. The unsolicited offer was the Sequoia innovation. So, you know, that's my, that's my, that's my, that's my website, I think. So here's a thing I think what's that was three additional fundraising. and nobody else was on the cap table, which means then Sequoia owned whatever percent,

30 percent, I don't know. It was insane. Which means they wound up owning, if that was 10 percent, was that, did they get 15 percent of Facebook? We kind of add Jim Gets to our pool here. Yeah, I don't know. Yeah, Jim gets pretty great. So here's a thing I've learned from, like, I've been thinking about this particular

issue because I've watched a few great venture firms do it recently in, in companies that we've been involved with at Pioneer Square Labs. and let's say, like, let's take a very negative view of it for a moment. You're like, wow, these guys are just trying to come in at a cheap price and buy up their ownership before there's a competitive market for this equity. They're not quite giving them the next valuation price. You know, this is Sharkey. However, what you're actually doing is pulling forward the time that they could raise

and basically saying, if you don't want to do the work, whatever. Great. You can take my term sheet. Like, I'm happy because I get my ownership. You're happy because you get more money in the door. On the other hand, the worst case, quote unquote, worst case scenario is it gets shopped, and then suddenly there's a frenzy to fund this company that you're already a shareholder in. You win both ways.

It's value creative for you. It's value creative for the company. It's a win-win. When I gave these offers, I'll tell you the companies I gave them to, FitBod, Lead IQ, Neighborly. Who else was in our? portfolio that I gave them to. Anyway, those were a handful of them. All of them said, of the four, the first four times I tried this, a grin, I did it with grin, two of them said, okay, I'll take the money. Yep. Immediately. The other two said, no, it's too low. One said

it's too low. One said, I don't want to raise money. The one that said it's too low, I said, okay, great, take it, shop it, say you have an internal offer and then come back to me. She did four meetings. If you want to get a great external round done these days, like that's, you got to do that. You got to be like, hey, my insiders want more. I'm fighting them off. Exactly. So I did that.

And it was only a million on 15. And the founder came back and said, you know what? I did four or five meetings. It was really annoying. And I don't want to change the governance of the company. And they were having a hard time getting to your number or slightly more than it. And you'll just do this. There's no paperwork.

Nothing really has to change in the government. I'm like, nope. Revenue stays the same, we just give you a million dollars, done. And so three out of four took it. The fourth was Fitbod. They really are like a Pagocyst. They're kind of like calm. They don't raise money.

They just make money. And the cash balance keeps building. And then eventually I got them to take $2 million. And it was at a valuation that was four times more than my original offer. But they, you know, they four X revenue. So or three X revenue in over some period of time. But that's the power move, I think, David, for you is to watch like a hawk and have that system where you can then jump in.

ask for a pro rata. Even you could ask for super pro rata, which is a little bit polarizing. But you could say, hey, can I put 50K in now and get 250 in the next round or whatever? Now, you have to have the ammunition for that, which you don't yet. So how do you manage the ammunition?

Because you don't always, I mean, at this point, you got a pretty good idea that your syndicate's going to be there for when you call on it. It's critically important that you have a track rig where you're syndicate and some predictability. In the beginning, it was really difficult because I would tell founders will do 200 and 600 would come in or 100 would come in.

Right. And I just told them, listen, after I did the first couple, I was like, I have no idea what's going to come in. If you want to do this, it's a process.

It takes six weeks, soup to nuts. And, you know, that's obviously a liability now, the amount of time it takes. So we've gotten that time down to three weeks or four weeks,

but it's still a process. You have to write a deal memo, you have to circulate it. The good news now is, um, we just, uh, did for a very high profile founder who gave me a million dollar

allocation, we emailed the syndicate and said, this is super oversubscribed, Sequoia's in the deal, this other person's in the deal. As a favor, they gave me a million dollar allocation. We're going to allow, I'm putting 250 in from the fund, 750 from the syndicate. It's going to be 150 people at 5,000. We had six million dollars in demand coming for that 750. It's easy to follow, David, until you're getting squeezed out by these ridiculous. It was 600 of the 8,300 members asked for an allocation in the first 48 hours. I've never seen anything like it. And many of them were asking for 75K, 50K.

And I just said, you can request whatever you want, but it's going to be 150 people at 5K each. So that's the level I've gotten to now where I'm basically hosting a lottery. God, that sounds stressful though. See, this is the whole reason I kept this small. I mean, we could have raised 10 times the money, but I was like, I don't want that in my life. You do. trust me, you want to be able to own 10%, 15% of a unicorn. I've only owned 5% of a unicorn, which was calm.

To this date, I own 5 to 15% in many companies, 20%, many companies that broke the 100 million barrier. And I'm starting to watch those now. That becomes like a totally different ballgame because we own 15% in a company now that's worth 300. And I'm like, oh my God, that's $45 million position. You know, and the two biggest positions they ever had were Com and Uber and those both broke $100 million.

And I'm like, wait a second, this company's not worth anywhere near Com or Uber's valuation, but we own so much of it, 15% times 300. If they just get to a billion, I'm going to have a $150 million position in this $1 billion company. It gets pretty exciting, you know. So there's two ways to win. You can hit like literally the sniper shot, which is what your fund is designed to do. or you can get the shotgun or, you know, whatever.

You can hit the 5% ownership. You got to get to 5% ownership in your winners, I think, to really move the ball forward. And you know the winners. So why let other firms take it from you, David? I hear you. And they want you. They don't want these other firms. They want David.

It's true. I have to feel in the love. You could, because they have you as a small owner on the cap table if you're throwing in, you know, 50K in a, in a deal, but you're not like their board member. And the next time that they're going to go raise a round and it's going to be a $10 million round, like, do they want to bring on some unknown or do they want you to step up and be the board member? I don't know if you're interested in that, but being a board member is a lot of work.

David. David, how old are you, David? About to be 37. Okay. This is your prime earning window. 37 to 57. This is when you can make bank. put your head down, say yes to everything, that's a great founder.

And do not worry about time or life work balance. Ben has no life. He's never had a life. He is crinking money. We put a lot of work into this podcast. You put a lot of work into your podcast. Well, no, I mean, here's the thing about your podcast. You know, when you have a top, you guys are top 10 tech podcast consistently.

When you're in the top 10 like that and you have the deal flow we have, you can offer something to your founders now too. You know, it's not just a feeder system. That is the base level thinking of why everybody copied me as a blogger and as a, I'm not saying I'm Jesus or anything, but, you know, when I climbed up to hell and put me on the crucifix, you know, and they stad me and, you know, whatever. I think, I think, you know, you're not Jesus. You're Moses.

You got the tablets. I came up with the tablets. But no, here's the thing. You, um, everybody thinks of it like a feeder system. That's like base level one thinking. And I understand that. what then you realize is then you get to do the victory lap

with your founders and the fact that you get to include them on the podcast have you had your investments on the podcast yet? Not yet, but we talk about them. Okay, so here's what you have to do. Because our format, you know, we do like the huge case studies. I know that, but you can only do an extra one. You should just take two of your founders each,

do a special episode, you have all four of them on, and you each ask them a couple questions, how the business is going, how you came to invest in the company. it's editorial gold for the audience. We started doing with Pachy and Mario, we're not going to say it wasn't inspired by All-in. Not going to say it wasn't. Yeah.

We do once a month, we do we call it the idea dinner where we all just get together and we talk our own books. It's great. It's great. And listen, there's a lot of people copying the, the All-In format now of just, you know, four bros, four, you know, sisters or four brothers, whatever, just getting together and hashing it up.

I think it's a great idea. Hey, everybody. I thought I would bring. Christina Casiopo, I pronounced it correct. I'm hoping, Christina. You got it, yep. All right, you're the founder of Vanta. People have been hearing your ads on the pod for the last year.

And I thought it would be fun to have you on and you to explain why you created Vanta and what SOC2 is and why it's important people get it right. So let's start with what is SOC2 for people who are just realizing they have to become SOC2 compliant? For sure. So SOC2 is at a high level. It's sort of a customer asking you to prove your security. So if you've heard about one, it probably comes, you're probably a B2B company and you're doing sales. And somebody asks you, hey, can I have your SOC2 report? Or, you know, hey, can you go through security review?

Or they usually don't phrase it like this. But, hey, I'm going to put a bunch of data in your product. And I want to know if you're actually going to be secure or leak it over the internet. So they ask you to get a SOC2 report. We know it's 20,000 to 50,000, maybe even 100,000. You know, if you roll your own, you do it manually. what does the average Vanta custom spend? Yeah, so the average Vanta customer spends less.

So kind of 10,000 on up from there. But then even in terms of the cost savings, it's a ton of time savings. So rather than kind of giving up an engineer or two for a year, which is just super painful, no matter how large your company is, it cuts it down to can be 20, 40 hours on the low end. All right. Fantastic. Well, thanks so much for coming on.

And you've been very nice to our audience, giving them $1,000 off, which is a really significant and generous offer. go to vanta.com slash twist V-A-N-T-A-com slash twist to get a thousand dollars off your sock too. Thanks, Christina. Appreciate it. Thank you so much.

It is interesting. So like on a meta level, just to talk about it all in for a second, I've been trying to dissect it in terms of like why it's working so well. And obviously your personalities are fantastic. You all have inside and not SEC inside, but like, you know, inside your knowledge.

Inside baseball. Yeah, inside baseball. Yeah, inside baseball. We got anecdotes. We got anecdotes. We got an anecdotes. interesting dynamics going on. The poker story yesterday.

Wait, wait. But here's a thing that like you guys overcame, which is typically four voices is too many on a podcast, especially for male voices, because the audience typically gets confused. Each of you already had your own personas. So in creating this super group, it became something different. And in the format that you do, you've done it at such a fast pace where it's like, it's It's aggressive. It's like, it's moving at a quick clip.

There's like, everyone's giving each other shit that like you're absorbing knowledge that you can't get anywhere else because it's a very unique set of knowledge that you each possess. But you're having so much fun. Yes. Along the way that I think it's, the number of people who could adopt that format successfully is very low. I think that's right.

Here's the thing I always tell people, because I was getting recruited during that Shark Tank era to be on a lot of the shows, like Planet of the Apps. offer me to be on. I declined on that one. I did a show with NBC. I did a pilot with the Weinstein company that didn't make it on air. Thank God. That would have been really bad. And, you know, a lot of those shows I was going to do, really the big problem they had was credibility. If you did an XY matrix on really, there's like three vectors. Your credibility, your ability to entertain and speak publicly and then your desire to do so. And if you take those three vectors and you look at, you know,

Chamath, he is highly credible. He's got that success. He's really good at speaking publicly. And he wants to do it because he said to me the origin of all in was, hey, I want to do a podcast with you. And then you go to the next, the next, the next. You know, Sacks, great public speaker, very credible and wants to be on. Then you have Friedberg, who is,

very successful. Kind of wants to be on, but I had to push him a little bit. And then in terms of public speaking, I also had to push him a little bit and coach him to speak more. He brings a lot of magic to the pod. Absolutely. I mean, the episode we did without him this week, I was almost going to throw it away. I mean, it was good, but not great.

In my mind, without him. And I think any of the three of us on, it's good, not great. But you're exactly right. Then you look at somebody like the Professor Cole takes, you know, he's not. not credible. He's not credible. He wants to be on TV. Um, you know, and, uh, he can't, and he can't entertain or speak. And he can't entertain or speak. I guess it's cringe-worthy entertainment. Obviously, you know, pretty sexist and misogynistic and gross. Wrong. And, but no, but you, that's what I mean by credibility. So you, a lot of the TV shows are like,

we don't care that Prof. G is wrong. He's taking his shirt off. He's. entertaining. He talks about his ED. You know, but the thing I don't like about him is then him saying Cheryl Sandberg only has her job because she's a pretty face and that misogynistic kind of stuff, which I think is, you know, he's terrible at predictions, but you can be entertaining and terrible. And that, I think that's what I learned about media because all those TV shows would put people on who had no credibility but really were loud voices. And that was the problem.

You know, they were putting on all these celebrities on Planet of the Apps. I don't like it. So on the tablets here, I got the, that's the last piece in the, in the tablet for me. Yeah. How do you think about your

J-Cal portfolio allocation? You said, you know, like, you're still, you're also in the prime of your earning careers. You get your head down. 50. 50. Uh,

the media activities, the investing activities. Yeah. So the media I do because I love. Um, and it literally is, is no effort for me to sit here and talk to you or to host all in. Obviously, that's like a, that's my superpower.

But it's also a real business for you, right? Well, yeah, I mean, I think all, I think right now this week in startups is doing three million a year in revenue and sold out four days a week and we sold out five days a week soon. And we sell it out every year. So, you know, it's sold out for seven years in a row. And every year it sells out. We add more.

So it's great. And it pays for the team. But for me, I just love doing it. You know, like this time with you guys, I'm writing down notes. And it will give me inspiration for things in my day job. And then in terms of investing, right now my goal is to get to, to get the syndicate to, you know, over 10,000 members was always the goal and to do 100 deals a year. And we already surpass that. So now I'm setting a goal of 200 deals a year and 20,000 members and to be able to put 250 million to work a year.

which I'm going to do it for 10 more years when me and I would put $2.5 billion to work with a syndicate as a solo GP there's never been a solo GP who's put $2.5 billion to work and so for people who are like he's the dumbest guy on the All-M podcast that is I'm afraid correct

and actually Jason if you just If you think about any venture firm per GP if you divide total AUM Assets undermanage it by five by number of GPs yeah probably on average 5, has there ever been that much capital put together at that pace under one GP? No. I don't think so.

I'm trying to think. Maybe Chimoth would be actually the example of somebody who's putting that much to work as a solo GPs. How many GPs does the Vision Fund have? I don't know. A lot. A lot. It dozens, I would guess.

A dozen, I guess. Something. Who knows? The Founders Fund probably hits that. They probably have six parts. partners at a given point in time? Yeah, five or six. And they're deploying a lot of capital.

Yeah, so if they have a billion, $2 billion, $2 billion, $6, probably $150 per fund per person, they raise a new fund every 24 months, 36 months. I think the funds are bigger than that. Okay, so let's say $200 million per partner, you do five funds a decade. That's a billion dollars deployed per partner. I think that's possible, actually. It's not $2.5 billion, but, you know, whatever. I mean, I think I could sustain it and enjoy it.

It's just people have to get used. to the fact that I am not the only person at the fund, which people are starting to get used to. So when I go on vacation this time, I literally told the people who are in the middle of raising, Jackie will manage the raise with you and Heidi and whoever over the next, whatever, two weeks when I'm on vacation. And, you know, I can jump in if you need me, but. Oh, now we're into an area that I'm extremely passionate about is leverage on time. So what are, what are the areas where you're like, oh, this is great? Like, I can figure out a way to really scale this and get more leverage and have great people.

work with the company or work with the media? And what are the things where you're like, this actually is a core adjacent activity that I cannot outsource? That's a great question. I think when a founder is at a crossroads where something is going really badly, like the company's imploding

or the company's getting bought or they have a founder crisis with their co-founder, that's when you've got to call in the fixer. There's no substitute for me coming in and guiding them through that storm. So I would say, you know, the storms, you know, a mini storm, no problem. But again, we're talking about serious, you know, the boats flipped and, you know,

the passengers in the water. Yeah, you're going to need me to get on the helicopter and get out there and coast guard it, whatever. The thing I've done in terms of leverage, which, you know, I think is something people, I discovered accidentally was I started doing like an office hours type thing. And then I made it open to more and more people and then having a slack. So I do a thing where, and I just got off it before this call, which is why I was 10 minutes late, sorry. I have had about 10 founders on.

Two founders pitched me their three-year model. So they said, here's our three-year model. Here's what we're thinking, our three-year plan. So I realized because Doug Leone told me, you know, Jason, hope is not a plan. I would rather you have a plan for the company. And they just literally burned into my brain. Like Doug Leone is like super mensch. He speaks.

You listen. Yeah. I mean, Doug Leone has my phone number and he calls me sometime and, you know, I see Doug Leone comes at my phone. Literally, my heart rate goes, whoop. I'm like, holy, I would too. And that doesn't happen with anybody anymore. And I, I know, you know, but he's got a propensity to just call people on the phone and have a two minute conversation with you. And this has happened, you know, 20 times in my life. He more or less cold called the CEO of one of my angel investments on a Sunday a year ago. This is his power move. just calls and you're just like, hi, I'm Stony from Sequoia.

And you're like, hi, Doug. You know, and sometimes it's something completely random and sometimes it's something completely life changing where he's like, oh, this LPE would like to meet you and would you be open to that? And I'm like, yes, Mr. Leone? Anyway, when he told me that, then I started doing this with my companies and, you know, if you are going through the three-year plan and eight other people are listening,

and then you say, hey, what is the other nine founders thing? So those kind of group settings were, I am not the only person, but I'm leading the discussion socratically and asking the probing questions. Man, is that a game changer for founders and for me, you know? So that's how I scaled myself. And I'm going to continue to do those kind of events. And then, you know, if I'm doing four days a week, I told my team, give me the list of the

highest revenue companies in our portfolio that haven't been on the podcast. And lead IQ, FitBod, and Grin, I just did dedicated episodes with those three companies in the last week or two. and I'm just going down the portfolio and that's how I'm going to do it from now on. When the companies hit $5 to $10 million in revenue, I'm going to join the boards. When they're under that amount,

I'm going to have the team, you know, be board observers, basically on those. And so that's my current plan. That's another Honom. It's very similar to what he does, where he says,

once you hit a $10 million run rate, even if you're one of my partner's investments, now you have my attention. And now I start evaluating to figure out if we should be the growth investor in this company. Perfect. I mean, I think it makes total sense.

There's a clear benchmark of where to get to. 17 managing partners and partners not included MASA and the CEO of SoftBanks investment team, according to our quick research. Vision Fund has 10 managing partners, not including Mossa. So that makes sense. So on a per partner basis, yeah, you would be deploying more. I think so, yeah. I mean, also, I think the syndicate is turning into more of a platform than, you know,

vis-a-vis republic, you know, as opposed to a single person syndicate. So we did two deals this past year that were consensus deals. So we started this remote demo day, and I'm interested in your feedback on this, where we said, hey, here's seven companies, which ones do you want to invest in? When they broke 250 or 500, I think, we just said, hey, we'll do the diligence and we'll syndicate. It's not necessarily Jason's deal. The syndicate voted collectively.

So that's something I've got sloshing around in my brain is hey, if the syndicate wants to invest in this company and 100 members want to put in 10K each and it's a million dollars, who am I to stay in their way? We could just process it for them and take the carry, do the diligence, and manage the investment for them. So tell me more about what it means for the syndicate to vote. Is it simple majority? Because remember, we're in a non-consensus-driven industry.

Well, if 100 people out of 8300 wanted to. to put skin in the game of 500K or more, it's such a small bet, and it's such a small amount per person. I think you can be pretty liberal, promiscuous. I don't know what the word here is. You can be pretty aggressive. I think aggressive is probably the best word.

If it was $5 million, you really do want to have somebody who is the lead, right? So I think when you're making these 250, 500K bets, and it's 100 people at $2,500 or $5,000, if you look at it like an experiment, Yep. It's almost like a Kickstarter, you know, kind of like a small bet. So the 25K bet, 50K bet.

Can I give you some advice, Jason? Yeah, please. So I think you need to, I think you need to knight some people within the syndicate to be smart money. To basically say you are signal creators. Because otherwise, I mean, you have literally written the book on how to become an angel investor. So you're going to attract every doctor and lawyer out there eventually. And so you got to make sure that. But some of them are going to be a really good angel investors.

It's starting to have them. But the vast majority of them. Yeah. Interesting. Where's your fun at, Ben? I love this idea, by the way, deputizing people. I've also been thinking about the scout programs. Who's the guy who did the indie v-seating that failed and he did the whole?

Bryce. God, that was a good idea. It was a great idea. I mean, Bryce, I was a little critical of Bryce. With the indie idea, I was like, this is stupid. Like, why would you give founders back their money? Talk about putting a stake in the ground. The burning unicorn head.

I loved it. I think it was good. I was like, this is dumb because you basically are going against the basic concept of venture capital, which is you're defined by your outliers and you're saying you don't want outliers. I was like, thank you. I will send you all the people we say no to. And can you please send me the Uticords?

He didn't appreciate that. And I invited him on the pot a couple of times. He doesn't like me with good reason. I was super critical. But he did get something very right with a scout program, which was he opened it up to anybody. He had an incredibly diverse set. So he took Sequoia's like, you know, doing the management teams that the companies they invested in and, you know, people in their orbit.

And he just said, hey, I'm open and this wide open. And then he offered them a $5,000 cash payment if they made the investment. As opposed to carry that could come down the road. And I was like, that's brilliant. That's brilliant. Just cash. So if you were some 25 year old, your pl, you're pl, plugged in, you're relentless.

That's a lot to you. It does create a signal though to get a deal across the line. Like it does create a strong incentive for you to... No, but they just scout the deal. It's up to then Bryce or me or you or David to then shepherd the deal. They're just giving it to you. They're putting it on your plate saying, I found this company. You know, it's going to be trading for free with, you know, for millennials and an app.

You know, the end. And so I'm going to steal that idea from Bryce, I think. That's a good one. really good idea. Because it's asymmetric. Like to a fund, your $44 million fund, who gives you a $5K, whatever. That means nothing. Well, I was thinking of doing 5K. To them, it means a lot. I was thinking of doing, let me see if you like this idea, 10K, zero carry, 5K, 5% of our carry, so one of 20 points, or zero cash and two points of carry, 10% of our carry. Just for scouting it and filling out like a basic deal memo.

feels like, and then they wouldn't be officially scouts, I got to come up with another name for it, where they just are... They're like... Affiliates. Talks about this. They're your radar network. The radar network, they're just affiliates.

Like, they're just saying, hey, here it is, but I'm not going to be on the board. I'm not going to shepherd the company. I don't even need to, you know, yeah, I don't even need to be an official scout. So that's my fear is I don't want people running around. I had somebody who heard that we, Because we do a carry share.

Their Twitter bio becomes Jason Callicanus' personal scout. Literally, that's what happened. Somebody literally did that. They said they were scouting for me. And I was like, who told them is okay? And one person in my team was like, well, I told them we had a carry share, but I didn't tell them they were scout. But they used scout like in a lower term.

And this person literally put their LinkedIn scout for Jason Calacanis. And then somebody's like, oh, I know where I met with your person. I was like, hey, Jackie, Ashley, did this person work for us? They're like, no. I'm like, does anybody know anything about this? People started searching their emails. and they're like, oh, we found it. Our bed.

Pretty crazy. When you think about it. All right, well, we had a really great idea for this episode, and it wasn't fund formation and innovating and venture capital, but here we are. And we were going to do our Mount Rushmore of Venture Capital. I'm going to call an audible here and say, let's do this for the next episode.

And we will pick our Mount Rushmore of Venture Capitalists, and we should tee it up now. So let's tee this up for the next episode. Ooh, I like it. So we're going to tee it up. Mount Rushmore as a device means the top four of all time. You've seen this on sports shows where people say, here's my Mount Rushmore, it's LeBron, it's Jordan,

blank and blank, and then you have this great, vibrant debate. We're going to do this for VCs. And we need to pick the criteria. Like, I think that's why it's going to separate into two episodes because we could have a healthy debate here on like just how would you decide who should go on Mount Rushmore? Right, because one way would be historical returns, an obvious one. So that would be through the LP lens, but that's not the only lens, is it, Ben?

No, you could also take the founder lens and say, if I could take a check from anyone, all other terms being equal, who was the greatest four people that I would want on my board. Right. And we can even say, is it today? Is it alive or dead? Ooh, right. Because you could say, hey, listen, you have somebody like Don Valentine who founded Sequoia and did Oracle, Cisco, I mean, kind of hard to even...

Atari. Yeah, I mean, how do you even like put Don Valentine in perspective here, you know, compared to Chamoth or David Sachs? But, you know, Don Valentine, rest in peace is not going to be able to be on your board today. So I guess you have to make some allotment here when you're doing your four of historical today and everything in between. I think we should say all of them in their prime. Okay, in their prime.

Okay, I think that's a nice way to put it. So I'm starting a company in 1982 and, you know, that. So if I'm taking Don Valentine, it's like the 80s, Don Valentine. Got it. So if we're talking about Jordan, we're talking about Jordan is prime, we're not putting a 50-year-old Jordan against a 36-year-old LeBron. No wizards here. Yeah. No Wizards Jordan.

We're saying Jordan in the prime versus, because some people are kind of retiring and. Yeah, yeah. That makes total sense. So I think they, I think they're actually three though potential vectors. Vectors. And we should do, I think we should decide on one of them. One is the LP perspective. Got it. Yeah.

Just straight up returns. Yeah. One is the founder perspective that Ben said, which is who do, who do? It's a competitive round. I could have anybody who am I choosing? Most helpful. And I do want to add one caveat to this. It's not the most founder friendly VC.

It is the VC who will help me create. the biggest win for everyone. Right. Right, right, right. They're going to, yes. So we're talking about 2007 Bill Gurley in his prime, you know, doing Uber and, you know, every other incredible company did during that time. Got it.

Right. Because otherwise, you could have someone who's just going to like roll over on every decision and be your, you know, have your proxy, which is like, that's not really what we're getting at here. Right. Yep. Okay. So those are two.

Then I think the third potential lens is your, you know, you are starting a five-person venture capital firm. You are one of the five GPs, who are the other four GPs you want with you? Wow, that's a powerful lens. So you're saying, I'm building my own fund from scratch. Yep.

That's almost the best one. That's like building an All-Star team. Yeah. That's the best one, actually, because it takes everything into account. It takes the founder into account, and it takes the LPN. I think you unlocked it, David.

So this is basically, I'm starting a five-person venture firm. I'm one, David's one, Ben's one. We're each starting a new venture firm. Alpha, beta, delta, whatever. I don't know who wants to be the beta in this group. Or the alpha. What, are we starting like a sorority?

Some thing. I'm just coming up with generic names. Come, help me out. Okay. We're starting oak, elm, and whatever. Pick another tree. Calcanus Gilbert and Rosenthal. What do you like?

Calcanus Gilbert and Rosenthal. It actually sounds like a great law firm. That's a great law firm. A bunch of immigrants. $1,200 bucks an hour. We're going to need a retainer here. But I like that. We each pick who we would want in our new venture firm to build around.

I do like this one because it does take the others into account. The question is, do we care how these characters interplay with each other? Like, can we pick some more and water here? You have to think chemistry. You do have to think chemistry, how they work with you, how they work with each other. Yeah, no, I mean, are you going to have four alphas? Maybe they can't work together. It's definitely something to think about, you know, like, hey, listen, Keith Rebblum.

is a heck of a VC. But what are you about to say? You're not putting Keith Rabeoy and Chimoth in the same firm. I mean, what the whole happens if you have Rabe and Chimoth in the same Monday morning meeting and they're trying to decide on investing in a company. And Keith tells Chimoth, he's an idiot. And Chimoth tells Keith, he's an idiot. And these are two of the most successful guys.

That's like having, too. Oh, I would love that. That's like having Kobe and LeBron or Kobe and Jordan on the same team. There's only one basketball. Chaos agent. Oh, I love, I'm a, you know, the Dungeons and Dragons. like when you're building your character. I'm chaotic good.

Like that's me. I'm chaotic evil, yeah. Oh, great. So I would love chaos. This would be like putting Dennis Rodman and who is the guy who would say ball, don't lie. Rashid Wallace, Draymond Green, Rodman. Isn't Rodman or another? Who else is absolutely going to get a technical in the first five minutes of a game?

Stephen Jackson. Oh no, Ron our chest. Went into the malice at the palace. Here's my team. This is my team. Ron our chest. Rasheed Wallace, Draymond, Green. Dead Robin.

Oh my God. Me and those four guys in an NBA team. And you're the point guard. Literally the four of them are absolutely getting technicals and getting two of them are kicked out of the game. We're playing three versus five. Oh, my Lord. But yeah, Stephen Jackson is the only.

one who actually can, I think, he's the only guy who actually beat up a fan in the history of the our test choked a fan, I think. Wasn't that as the coach? Oh, yeah, you're talking about Spreewell. Oh, that's Spreewell. That was Spreewell. Spreewell choked PJ Carlisomo. P.J. Colissimo, yeah.

But from what I understand, P.J. Carlissimo said something. This is the inside story in the NBA that nobody knows. I don't know if this has ever come out, but I don't know. know people in the NBA. Let's just say PJ Carlissimo may have said something that was chokeworthy to a player. Yeah, that will do it. I don't know that that's true, but the people I know in the NBA said, you know, listen, I stand spray. I'm just leaving at that. I sim for spray. Great. It was our test, right, who changed his name to Meta World Peace. Absolutely. That's right. Yeah. Yeah. I mean, all right. So let's give everybody a cheese.

We're going to give them a tease. And maybe this will be good because then people can tell us, too, if they feel like we're forgetting people that they would want us to include in the discussion. All right. So here's what I think would be a good idea. We each do one pick today. But let's read down the list, just a scratch list here, just a starting list. Don Valentine, obvious. Ben, read the next one.

John Doer. That's a layup. David. That's an obvious one. Bill Gurley, obvious one. Peter Thiel. I mean, Facebook, Twilio, Palantir. We're going to go to the East Coast for this next one.

Fred Wilson, representing New York City. Twitter, Tumblr. Coinbase. Who, me. The question on this one is, are we talking Bond Capital or Kleiner Perkins, but Mary Meeker? And the question is, when was she in her prime? Well, you know, she was not an investor and was an analyst, but she was a great analyst.

She's only been doing venture for a decade? I think we can say we could get her during her Morgan Stanley days as a VC. That would be a wild card because she eventually did move to VC, but if she had left in her prime, she was playing the wrong sport, you know? She should have been at a VC firm probably.

Was she the lead analyst on Amazon for their IPO? I think that was girly. I think that was girly. So what would what IPOs was she? I mean, probably. everything, probably Yahoo and all those kind of companies during that time. Blue Mountain Arts. Kiffcliffe.

Blue Mountain Arts. Forgot about that. Okay. So then you got Jeff Jordan from Andreessen Horowitz. Airbnb. So far, and David and I just finished our two-part, Andresen Horowitz, uh, back-to-back five-hour extravaganza on acquired. Are they 13 funds?

Uh, I know there are 18.8 billion under management. I think in terms of the. numbered early stage funds. They're on either seven or eight right now, but then they've got bio, they've got crypto, they've got growth, they've got the cultural leadership fund. But Jason, I noticed here, I don't see Andresen or Horowitz

on here. I just see Jeff Jordan on this list. Whatever, I got beef with Andreson and Horowitz. They wouldn't come on the pod. They're PR people. Who's the woman who runs all their PR? Margaret, fantastic. Yeah. Oh, God.

Jeff, though, we got to talk up Jeff for a sec. I can't stand her. I find her incredibly annoying. Jeff Joe, Jeff had, maybe. She's the one who jerk me around. They wanted me to have all the partners on and have, and I had to talk to her constantly, no offense. But, you know, listen, I'm Jason Calcantan.

I'd only talk to the PR person. I got Mark and Tracy's my LP and then you're putting me on your PR person to like beg for scraps and try to convince them. And then they're like, she tried to horse trade with me a whole bunch, you know, have this person on the pod and then maybe we'll have him. And I was like, you know what, I'm out. Absolutely. You know, but I'm beyond this.

Like, I'm done with you guys, like, and gals. It's enough. Like, I don't want to negotiate. Do you ever send them deals or are you just done done? No, 100% I do the opposite. And I told that to them. Well, the other thing that happened was I, this is a thing that really pissed me off. There was, I was moderately pissed off about them jerking me around about coming to a conference or coming

on the podcast. Oh, are you going to talk about the Uber Series B? I think we should take, I think we should do a diversion in a second and talk about. So I'll just say that. That to me was like just super annoying and they were super annoying about it. And it was disrespectful I felt to me because I work really hard to put on these events and they're free for founders and you're showing up at everything else. And the second piece was then Margit or Margaret or whatever, her name is like jerking me

around and trying to horse trade with me to get their other partners and their terrible books that nobody reads that they buy 10,000 copies of to put on the list. And I was like, yeah, no, I'm out. But the thing that really got my goat was Mark was like, yeah, send us companies, send us companies. This is when they had their first fund second time. I sent three companies, two of them. Mark gives the founders over, bates and switch the founders, where Mark replied to the founders and said super nice things to the founders.

The founders get excited. Those two founders flew in for meetings. Mark didn't show up for the meetings. Junior partners, whatever, show up. in both cases, they said the meeting was incredibly short. The founder,

the partners were rude, were disinterested, and they felt like they had to take the meeting and couldn't end it fast enough. And that to me was, that was it. I was like,

you know what? If I'm going to have this bad of an experience and my founder's going to have this bad of experience, and I told Mark, I'm taking every company, that's a unicorn.

I'm bringing the ball down court. I'm sending it to Sequoia to Benzmar to Benzmar. I don't really get them riled up. No, I did.

And I was like, listen, Bill Gurley shows up for me on the podcast. Sarah Tavill comes on the podcast. Anybody I ask at Benchmark, Sequoia comes on the podcast, or they come to the events. My God, some of them even sponsored the events

when I was getting started. I needed help. And then Indrisen Horowitz was just persnickety with me. And then they treated the founders badly. And then I was like, you know what? I don't need to have you in my fund. You said it directly to me, Mark, that you don't want to come to my events

and you don't want to have to be, if you don't come to my events or show up for me on the podcast, then you can't be on my fund. Yes, I just decided right at that moment that I don't need to have this level of like, I mean, who's Morgan Drison? Give me a break, you know, like, I'm sorry, like, you're not that important. Ben Horowitz is not that important.

You're not a successful as Sequoia or a benchmark. Your returns are much lower than theirs. So like you're the 15th. I mean, in terms of capital under management, they're incredible. In terms of performance, they're far behind everybody else, right? I mean, isn't that what you learned? Well, we did the math. No, they're, they're doing pretty good.

They're second tier in their returns. They, uh, that was the knock on them for a long time, but they returned $11 billion on Coinbase. And you can't really argue with that. The, the, the base case that we came up with, Dave, is it okay if I spoil it a little bit? Yeah, go for it. Yeah, spoil it. It gets been more people to sign up. So they've raised almost 19 billion in funds.

Uh, we really can only do analysis on the first, like. like 8 billion raised because the rest is recent or bio or stuff that we weren't looking at. Yeah, you're in the bottom of the J curve. Yeah. Makes sense. So of like stuff they could be liquid on. We don't know if they've actually distributed, but on stuff they could, they've returned at least, and these are estimates, $25 billion from that eight with the potential for like 10 to 20 more. Okay, so they'll be a four X fund.

That puts them in the top 20% of funds. Yeah, top tier. With a lot of, as we were talking about earlier, with just like a lot of dollars. This is just from their top 10. I mean, if you're a 3x fund, that's fine. I mean, I returned on my first fund. And again, I'm saying their absolute worst case scenario. These are the returns from their top 10 companies.

I mean, it's still no Sequoia or a benchmark, is what I would say. On IRA, yeah. More dollars return. If you were an LP and you could put money into only one firm, Sequoia, benchmark or Indrisen, you would do it in that order. It depends how much money I have to put to work. If it's a lot of money, I'm putting it to work in Sequoia. If it's a little money, I'm putting it to work in Benchmark.

Okay, let's pick $10,000. 10 million or 100 million. Okay, yeah, so you're debating Sequoia versus benchmark. Right. Benchmark is smaller. Sequoia's bigger. Do we care about multiples or do we care about cash? Okay, just let's play the LP game here for a second.

We're all LPs. Here's your choices. In their prime. Sequoia, benchmark, Fred Wilson, Indriason. Who's last? And we're assuming all of them are doing the same deal with me on carry? Same deal on carry. In their prime.

By Fred Wilson, you mean USB as a fund? U.S. V as a fund, yes. You would pick it in the order of what? We're talking about benchmark Sequoia, Fred Wilson Union Square, right? Or just Union Square and Andreeston Horowitz. Are we talking about today? Are we talking about a NEPRA. We all know who's last.

We all know who's last on that list for LPs. Dead last on that list is Andreessen Horowitz. We all know who's first. It's Sequoia. So then we're debating two and three, correct? The number of times on our Andreessen episode that we use the, if you're going to come at the king, you best not miss line about Sequoia.

Yeah, they missed. But anyway, let's do it. Let's do it right now. Listen, you guys don't have to worry about your relationship with Andreessen because you did your show already. In all honesty, who do you pick as your number one? In each of the firm's primes. In their primes, you can be an LPN.

Oh, all right. You can be an L.P. Here's the wild card is that there's a reasonable chance I'd want to say Andresen Horowitz today because I think their prime is the next 15 years. Okay, fine. Let's take it as in the last decade, who are you making your bet on? Like, if Web 3 is a thing, if crypto's a thing, then they're going to be the best. They are best positioned. Yeah. Unfortunately, crypto is a total giant scam and there's no actual use places out of

NFT. So I think it's actually going to blow up in their lap and it's going to result in a ton of lawsuits. That's my best guest. I think all their crypto investments are going to be, you know, aside from Coinbase, which is a legit company operating, I think a lot of those projects are just never going to actually materialize. That's my gut. I think it's going to be, I think it's going to be like, what was the thing, what was the big investment that Kostla did and he just got demolished? Ethanol? Oh, yeah, yeah, yeah. He did all those ethanol funds or whatever or, you know, at that time. Or the Kleiner green stuff. Well, who would be your, in that four, what would be your one, two, three, four?

if you could be an LP well let's just say it this way if you'd be an LP and only two what are you picking? I mean the whatever the 2007, eight nine benchmark fund for sure.

I mean that in their prime wasn't that fund a 12 X? You're gonna go Sequoia and benchmark I mean that's basically it I think and Fred would be very close I think the Sequoia funds with Airbnb and the like

might have ended up being better. WhatsApp, YouTube, Twitter. But yeah. Sequoia is definitely number one. Right, let's go down the rest of this list. Wait, wait, I'm sorry. It's 25X gross, benchmarks 2011 fund. 25X, cash on cash.

And you're sitting here talking about in Jerezhen Horowitz's 3x, 4x best, worst case scenario. Like, that's the joke of all this. Is Idresen Horowitz spends all this time doing marketing themselves and markets out there creating clubhouse groups and their own news site and their own books. It's so funny, Jason. Because before, when David and I were like,

What should we talk about in Jason's show today? I was thinking, like, it'd be fun to kind of, like, equate what Jason is doing as, like, the pioneer to what Andreessen Horowitz is doing now. This combination, media empire, venture fund, investor. Listen, I'm not sour that they're copying me. I take it as flattery. You're Moses. You got the tablets and everybody's just reading trouble. What I do take offense to is that they didn't show up for me and they treated my founders poorly.

And also then they're just. Yeah. And I also think they blocked me from Clubhouse, which thank you for saving me money. But I really wanted to be on that deal at the time. Oh, boy. And I think they were like... I think we talked about that on our first episode together. They never invite me into any deals.

They never show up for me and they treated my founders poorly. And then I look at Sequoia. I look at those other firms. All right. They're always including me. I'm so sorry. Let's keep going down the list. So after Jeff Jordan, we've got...

Meal Shen. Sequoia China. Big time. You guys keep them. You guys read. Alfred Lynn. Sequoia Early Stage U.S. Huge.

Back to back, two days, back-to-back IPOs with Instacart and DoorDash. Incredible. Airbnb and DoorDash. Yes. Yeah. It's like, remember the Tom Amanski instructional videos on ESPN in the 90s,

back-to-back national champions. It's crazy. Then we got Bestie Chmoth. Bestie C. Which, you know, his venture investments, you know, well, certainly good. I would argue, I think, maybe you've got the inside info

info maybe J. Cal. His non-venture investment's even better. His call on Amazon, his call on Bitcoin, his call on Tesla. I think that's why he wanted to create a firm that was not limited to early stage venture. So yeah, Yamerslack,

Box, Virgin Galactic, all good. Oh, great, yeah. All great. This idea of a crossover fund where he can just put money into anything he thinks is going to go up. I think that's why, you know, when they talk about him blowing up social capital or rebooting it.

I think it was very much like he was doing the traditional venture thing and he said, you know what? I think there's something that I would enjoy more operating, which is a conclusion I can do. This is a box that I don't want to fit myself into. I mean, do you guys think I could work at a big firm? You think of the big firms would like to have me as a partner? I mean, obviously. I mean, some wouldn't.

It's too hard once you've done your own thing to do it. It's just, it doesn't work. All right. That's it. Cowboy Ventures. So on Chamath, by the way, I do want to say, like, today's his prime. So, like, if you're picking Chamath to be a part of your five-man firm, that's today, Chamoth. Exactly.

Alienly, Cowboy Venture, it's great. Yep. Furner, amazing. Yep. Vinod Kosla of obviously Kosla. I mean, I think he was the most successful venture investment ever with Juniper at one point in time. Yep. At Kleiner.

He was, it was Vinod and John Doar at Kleiner. They were just killing it. But that Juniper investment, Juniper Networks, from what I understand, was at the time, like an sick hit, like a crazy. Let's try and pull some data for next time on that one. Oh, yeah. Obviously, your boy David Sachs, who, by the way, I also think would be today. Like, I think that's part of the magic also of all in is all of you are currently on your own rising stars. So it's not like you're pulling on anyone from, you know, they're going to be.

Angel portfolio pre-craft. Oh, unreal. It's unreal. Oh, it's unreal. Unreal. I mean, a lot of them were the series B's, though, in addition to Angel. So to keep that in mind. I mean, still, you do the series B in any of these companies.

We just got done talking about all that matters is getting into the binary companies of our decade. I agree, I agree. I'm just saying it's not a competition or whatever, but yeah. No, he's done pretty amazing. Keith or boy. Keith, fellow PayPal Mafia. It sounds like. Jason, obviously.

is putting in there, along with Jamath, and let's see, Annie Lamont. And don't know her. She's lesser known, but. Co-managing director,

co-founder of Oak, HCFT, which was Oak, but yeah, great healthcare and fintech investor. Chris Saka, who I think may have had

the best multiple on a solo GP fund of all time with his investments in Twitter. Twitter and Uber out of the same small fund. Yeah. I mean, he had Twitter, Uber, and Instagram in that fund.

Oof. Insane. It was like a $3 million fund, right? It was an $8 million fund. I think he only deployed six or seven, and I think it became worth a billion. So it was like 100x fund, which my first fund was 100x, too. If you look at my scouts, $650,000 invested turned into $110 million. It's so weird.

I don't see the name Jason Caliqanus on here. No, no, because it was small dollars, you know, like if it had been six million deployed, it would have hit that. For the record, we told Nick, we wanted J-Cal on the list. No, I don't think I would be on this list right now. I'd be totally honest. I think it's, you know, my best days are ahead of me. Well, we got last in the original list sticking in the angel investment category, the OG, the original Super Angel, Angel, Ron Conway.

I mean, I think that makes sense. I don't know the numbers. From what I understand, he had such a small amount of Google. it actually wasn't material, but the Facebook was material. I think that's the what, you know, you never know with this,

you know, back channel, but it was like, I think he had 10,000 in Google or something. So depending on how long you held it, you know, it wasn't like a hundred K check in the angel round of Google.

And then our, uh, two or no, Ben, you had one edition before the show. I had a Jim Breyer from Excel because I think like Peter Thiel gets a lot of glory

from that Facebook investment. Excel had probably the single best venture investment of all time in their investment. Yeah, I don't know what that resulted in today's dollars. I mean, that's the thing I'm thinking about with all these investments is I'm starting to think two decades now in all my investing, 10, you know, six to 12 years as private companies and then 10 to 20 years as public market companies is my current thinking of how to hold these. I mean, if you're going to end up with a Facebook, Amazon, Apple, Microsoft, Google, caliber a company.

Never sell. I mean, you just can't. Those companies are growing faster today than they have in the last decade. Absolutely. Breyer-led Facebook's $12.7 million at a $98 million dollar valuation. So I guess you're only 10%. Pretty wild. And it's worth a trillion now?

What does Facebook work? Yeah, I don't know. That's the thing I want to do some research on is what Excel's liquidation from Facebook was, or at least their distribution. All I'm going to have lunch with Hohanam. While you were talking about him, I just, the best. Did this happen publicly on Twitter?

No, I just literally DMed him on Twitter while you guys mentioned him. I was like, I don't know this guy. And I just wrote lunch, question mark. And he was like, sure. This is why Jason's been so checked out this episode. He's just like been DMing the whole time. No, I'm not checking out. I'm engaged.

Oh, what's this new theme music? Let's listen to your new theme music. Oh, wait, wait, wait, we have one more though that we added during the episode. We got Jim Gets. Of course. Got to have him on there. Oh, yeah. Do we want to have, should we have Young Spielberg and Mike Taylor play out this episode?

We absolutely have to unplay it. All right. Listen, thanks for coming on the show, boys. And we will do in two weeks our venture investing, Mount Rushmore, building a new firm, us plus four, five-person firm. Who do you put on it? Super group ventures. Super group ventures when I'm back from my trip. Here we go.

Taking us out, Young Spielberg, Who Got the Truth. Bye-bye. Who got the truth? Is it you? Is it you? Is it you? the truth now. Is it you?

Is it you? Sit me down. Say it straight. Another story. Everybody's talking. Nobody's listening. These days I feel lost me. Lost in opinion.

Everybody's fighting. It's going on in the world I'm living. Is it you? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down. Say it straight. Another story.

I had hair for the cheap talk. They flip-flop like a seesaw. Not free under these laws. Now the world see what we saw. People wonder what to do now. It took a body cam to get the truth out. Got so much to lose now. You. Is it you? Is it you? Is it you?