This Week in Startups - David Tisch shares insights from 350+ early-stage investments in companies like Plaid & Roman, importance of reputation, dealing with sharp-elbowed investors & more | Angel S5 E1

Episode Date: January 21, 2021

Check out BoxGroup: https://boxgroup.com FOLLOW David: https://twitter.com/davidtisch FOLLOW Jason: https://linktr.ee/calacanis

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We've come back. We're doing another 10 episodes of Angel, which is the sister podcast of this week in startups where we interview people who are investing in startup companies and who have been doing it for a long time. First up, David Tisch, he's a general partner at Box Group, and he's been doing that since 2007. when I met him, last time he was on the podcast was back in May of 2011. He was on episode 143. And here he is back on episode 1,100 and something. How are you been, my friend?

New Day, same thing. But thanks for having me back on, Jason. Well, I mean, it's, it's worth pausing for a second and looking back at what happened over the last decade, 10 years ago. Has anything happened? The market just went. up and to the right? In a way, yes, the market went up and to the right. We started angel investing, you and I, right as the market was coming out of the Great Recession. So it was a very interesting time.

Describe for people who maybe weren't investing at that time. Let's call it the 2008 to 2012, 2015 vintage of startups before we had SPACs, before we had Bitcoin 30,000 and all this craziness. there was a moment in time when companies like Uber or Thumbtack were pitching at the Open Angel Forum, a project you and I worked on together back in the day. Explain to people what that time period was like for startups. Totally. Contrast it today. Yeah, I think the easiest thing to identify was that this was a rebel job. You weren't doing something that was talked about or taught in schools, which it is today. You weren't doing something that people wanted to do. It was so. of off the cuff. It was an opt-in industry. People had to find their way to it and want to invest in startups. The risk was enormous. There wasn't a sort of proven out set of returns.

As you said, we were coming out of 2008, but even more so, you were still in the remnants of the dot-com bust. And so there were definitely interesting new companies that had emerged at that point in New York specifically where I'm from, you had Etsy, which started in probably 2005. Facebook was developing and Facebook was obviously this new monumental important company, but there was still immense skepticism as to if Facebook was real. They weren't making money. They were not cool this week. And then they expanded outside of like colleges into high schools. And every time Facebook had a button, it was a news story. And so the, moment was different. This wasn't a established world. There wasn't a set of resources for new

investors. There was not a set of resources for entrepreneurs. Why Combinator was nascent, but emerging and clearly something important, but newer. Even though it had started years earlier, it was still newer. And today you have a mature ecosystem in almost every part of technology on the company side and on the investor side. It was interesting at that time period. We would do this Open Angel Forum. You were running New York. I was running L.A. and Saka was running, and Kevin Rose were running San Francisco. I guess Bradfeld and some of the team were doing Boulder. And at that time, the number of angel investors was very finite. We had a hard time finding 10 angel investors in New York to come to the event. Talk about that, like how hard it was to find an angel investor and even companies

like, we had to work to get six or seven companies to come present, right? Yeah, it was just such a different world because, again, it was like sort of a rebel job. You had to want to fund this really risky asset class. And at that time, there was enough volatility in the public markets that you were able to make money in many other ways. That this wasn't looked at as a primary source of quality investments. And so whether it was part-time investors like doctors, lawyers that were extensions of sort of how they were spending their capital, or it was a early group of former founders or executives that big tech companies in New York finding that group of angel investors. And, you know, Angel is a funny word, right, as we'll probably talk about. Angel technically means

investing your own capital. And over time, a lot of those angels, investors became backed by outside investors. And technically some version of VC, even though we've labeled them super angels or, you know, early stage investors. And so I think there was a group of people that were investing their own money back then, but it was, you know, a handful, not a plethora. Yeah. And back then, the ability to do a round of financing, it took a month or two. and the velocity, you know, was much slower. Much, much slower. Absolutely.

And there were less seed firms. There were a handful, right? There was first round capital, you know, clavier at soft tech back then. Yeah, rebrand. You know, Steve Anderson at baseline, but they were doing mostly West Coast deals. They weren't doing East Coast deals. There wasn't this established seed industry in New York. Roger Ehrenberg had kicked off IA and was doing some great work.

But the traditional firms were focused. on Series A. And Series A is sizewise what today's seeds are, but Series A was a three to eight million dollar round for 20 to 25 percent of a company. And the sub three million dollar round, that seed round, it was just a non-established market at the time. And over time, you basically saw new entrants on the venture side emerges as seed investors. In New York, it was, you know, Thrive Capital started as early stage investors. Lair Hippo emerged as a force. And box group, we've been doing that for now 11 years based in New York, writing a lot of early

stage checks every year. Our portfolio is geographically diverse, but our home is New York. And correct me if I'm wrong here, you are, you originally started investing your own money, but then you raised outside capital and you have a fund properly backed by LPs. So now you're investing other people's money. And your typical check size, if I remember correctly, $250,500K in that early seed round, you're not a Series A investor.

And I don't think your pre-product launch typically, but typically describe your Goldilocks zone, what you're trying to do with that $250K to $500K check. We were so originally non-LP backed and actually lasted until 2019. So we never took outside capital until 2019. So it was about a decade of internal capital. own money and funding startups. We looked like a firm. We were just sort of a scaled angel investor.

And in 2019 decided to take on some outside capital. We raised two funds, $82.5 million each, so $165 million of capital that we're managing today as a, I guess a VC. I hesitate to say that. I like angel investor better. But we are VCs. We're early stage. Early is early as anything. It can be ugly. It can be two people in an idea. It can be a product. It can be a Figma drawing. It literally can be anything. Traction's great. Traction in this market is like a series B. So we'll take anything we see. 250 to 500. We will lead pre-seed deals. So a sub-2 million dollar deal, we're happy to write a term sheet and lead. And that check will be sort of 500 to a million. And then in a traditional seed round, which is above $2 million or so, we'll write a $250. to 500K check, targeting the second or third biggest check on a cap table. We'll do so before you find a lead. So if you don't have a lead and we meet you and you want to raise $5 million, we'll commit and then we'll help you find that lead. And so we'll work with you from the onset

to put that round together. How many deals did you do in your first decade of investing or so, you know, leading up until this having a fund? Yeah. About 350 deals. Wow. 350 deals. So it's a $250 to $25 to $35 a year average. I just realized I've broken $250 in that same period of time. And that really is like a Super Angel mentality. You're really placing a lot of bets. And that's why we decided to kick off this season of Angel, which we're calling our Super Angel series with you, David,

because managing that many portfolio companies and placing that many bets, that is a certain specific strategy that you're trying to, to deploy when we get back from this commercial break. I want to know how does somebody doing 350 investments and having that one-to-one relationship with those founders, what are they betting on in terms of how many outliers do you expect out of every, I don't know. So how many 100x returns do you expect to have in a 350 company portfolio when we get back on Super Angel? as somebody who's invested in over 250 startups, oh my God, has it been that many? Well, I want to talk to you about a serious pain point that I see all the time with my startups. Too high of a burn. They're just spending too much money and the runway is too short. One of the things that people have spent a ton of money on these days is buying SaaS products. Great idea. Make your company more efficient. But what if you're buying too many? What if you're not using some and then you're wasting all of the things? And then you're wasting all of the things. You're buying SaaS products. Great idea. Make your company more efficient. But what if you're buying too many? What if you're not using some? And then you're wasting all this time integrating them together. Well, there is finally a solution and the solution is O-D-O-O-O-O-com

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people who have really been doing this for a long time, let's say, 10 years, plus like David and myself. And how the dynamic changes when you've got hundreds of portfolio companies and what the goal is, I guess it's really easy to do in retrospect. I looked back on my first. hundred investments and counted how many unicorns. Look back on my 200, counted how many unicorns. And obviously it takes five, six, seven years, I think you would agree to figure out if it's going to be a unicorn or not when you're an angel investor. You kind of, or it's going to be a big

return. What is your expectation in a 350 investment portfolio? How many will be 100 X returns? How many will be 500 X returns? How do you think about the math? Or do you not think about the math and you just have crazy faith? I was going to say, I'm not going to answer your question directly because I don't think in that framework. Every single time we're fortunate enough to meet a founder that we are excited to back, we believe that what we are investing into is a unique opportunity, a unique potential outlier company. Obviously, that doesn't happen every time. I think it's easy for investors to do the math and to play out probabilities and to look back and sort of look at each one of these decisions as a number. But behind that

number is a person, a team of people who've put their life into that one company. They get an end of one. We get a portfolio. So it's an unfair business model shift in terms of what we do versus what a founder does. A founder has to bleed for their company. And in reality, as an early stage investor, 50-ish more percent of your companies will not work. In that situation, that And that will not work. You mean go to zero, shut down, return zero capital, and the founder spent five, ten, fifteen years of their life, and it didn't work. And that is the humanity of it. In a way, what I like about what you're saying, David, is, you know, if you just use another analogy, like, does anybody set out to make a bad movie? Does anybody who's producing that

movie, any studio that backs it, do they say, you know what, let's produce a really bad movie. It's just, you know, we're going to do 100 movies. Who cares? They're actually looking with intent, right? And you have that intent to back something that you believe in and that the founder believes in every single time. And every time we make an investment, we should be able to articulate to you being an outsider why we believe that can be a standalone magical company. You use unicorn, whatever word you use. It should be a standalone magical company. And that founder that we're investing in, in reality, we're trying to identify the best founders. And so we should be playing in sort of the top echelon of deal flow. So we're not funding anybody and everybody. We fund about

one out of every hundred companies that we see. So one percent in that decision is a person, is a team, is an idea that they are so deeply behind that they are going to commit their life to it. And it's not going to work every time. And I think that's the humanity of this business that is so hard to articulate in the media, in a printed news story is what it actually takes. And I think there's a sort of empathy, we call it entrepreneurial empathy that we as a firm have to have when we think about our business. We don't take our business problems and put them on our founders. It's not a, even saying the word our founder, I hate it.

I would rather say the companies were fortunate. Yeah, it's the companies that I am fortunate to be able to invest in. that's really the relationship. You know, I say our partners, because we are entering a partnership, right? We're bringing capital and hopefully some network or hopefully, you know, some patterns we've seen before that could be helpful. I pray that I'm adding enough value for them to call us their partner. I just think we are fortunate to back people who are building something from the ground up that one day can become a monumental part of the economy of society, of industry, of industry. And looking back over 10 years, we've been very lucky to be part of a lot of those stories.

What are the big hits from the first decade, from the first decade of investing for you, David, as a super angel? You know, we were- You look at your returns, the top three returns. You know, it's timely. And we were, you know, one of the earliest investors in Plaid. And so Plad was a company that we met, you know, day one and we're fortunate enough to, be allowed to invest into. And they've had a quite the public journey to this point. Some others from the journey. Yeah.

Yeah. Well, they, yesterday, I guess I don't know if I'm supposed to date this, but yesterday, they decided to break up with visa. So they had been. There was a merger. There was a merger for $5.3 billion. And the government decided to cause some trouble. And the companies decided to stop the merger. And so Platt has suddenly gone from a you know, exited company or a theoretically exited company back to a private company. And I think the irony is a year later, that deal was announced a year ago. The market for what Plaid's doing is probably a lot greater than the exit that they were fortunate enough to find. Oh, really? Because I was going to be about a $5 billion merger. I don't know if it was a merger of equals,

but you met them in what stage? And then what did you see in the founders? Yeah, we met them day one. Zach actually was an intern at TechStars when I was running it in our last program at TechStars before we left to do. You were running TechStars, New York for people. I was running TechStars, New York. And I left to do Box Group full time. And Zach was one of our early investments after we left. And Zach was somebody he had won an award at Bain for the most hours clocked by an analyst, which at a firm like Bain is probably really hard to win. And Zach at TechStars was our job.

just a unique outlier of an intern. And it was an intern, but he was just intelligence-wise off the charts with his ability to sort of look at the portfolio companies we had invested in and jump in and help them. And Zach and his co-founder, William, who were friends from college, had identified an opportunity in FinTech that they wanted to attack. And it really involved labeling FinTech data. So as all the charges were coming onto credit cards, it was how do you label it? And in essence, what happened was they started the company. And in order to get the data to label, they had to figure out how to get the data. And that's what Plaid became was the way to get the data out of the banks. And that connector, this simple connector from basically

app to banking system is the core of what Plaid is today. So we were fortunate enough to be in their earliest round and have known them for a long time now. And they've built a totally unique company. and are back as an independent company. And obviously in the time since all this happened, blank check companies have become a thing. Obviously, my friend Chamoth leading that and just taking a SOFI, I guess, was announced as one of the SPACs he's going to do.

And so that's basically something that Plaid is going to benefit from. There are other opportunities for them to explore now that the government stepped in and said, hey, pump the brakes here. and that, in fact, might be a better outcome for you as an investor, correct? Very many options on the table for Platt. I think selling to another sort of financial institution at this point, the government has said no. And so luckily, there are some other avenues that they can presume. I think the crazy thing to point out, though, is, you know, that's an investment from 2013.

And it's back as a private company. And today, you don't know how Platt ends. And that's the timeline of the business that we operate in is it's a decade long. So you said five to seven years to know if it's a great company. That might be right. But it's much longer to sort of get to the end point of a company where you're actually finding inability to exit. And that delayed timeline is something that as a professional, you have to be comfortable

with. And as a founder, you have to sign up for. And these are, you know, you say it lightly when you meet somebody. This is a 10 to 15 year journey. It's a sound bite. It's cute. But think about that. Like, that is a long.

long time. And that's what we sign up for. If you think about building a franchise, like the Knicks or the Lakers or something, like what it used to take to build before a star has just moved around like willy-nilly, you know, it used to have to have like a five to 10-year plan to get to the playoffs and then hopefully maybe have a chance of getting to the finals. And it really is, you know, a 10-year journey when you- Or another way to think about it is it's the length of a career for a professional athlete. It is literally like the length of LeBron's career to get these exits.

Right. Yeah. When we invested in Uber, you invested in Plaid, you know, like Kevin Durant was coming into the league, right? Or LeBron was just getting his first playoff appearance or something, you know? Like, it is mind-boggling to think. And it's maybe two or three presidencies, you know? Absolutely.

You invested when Obama was in office. We get back from this break. I want to go through how you think about the amount of capital and the amount of investors that now exist. Because we were, that tip of the spear, you and I and tech stars and Angelist and Naval, Nive, we were all looking and saying, you know, more people should be involved in angel investing. And lo and behold, here we are 10 years later. My syndicates got 6,000 members in it. And we've done over 140 deals, the first of which was calm.

And then Angelist has rolling funds and all this other stuff. And then there's equity crowdfunding platforms have blossomed. And the crypto mania, which essentially was ICOs were like a whole startup boom in and of themselves. It might have been completely fraudulent in 99.9% of the cases. But it was a boom. Nonetheless, I want to know how that impacts the system in which a super angel operates because you do not operate in a vacuum. You operate in a system and you have to change your behavior or not when you operate in a dynamic system like this where five times as much venture capital or six times as much venture capital

was put to work in 2019 as compared to 2010, $207 billion was put into venture capital globally. And in 2019, $300 million, basically, $295 million. So that's a 6x difference in a decade. I wonder how things change for you as a Super Angel. We'll get back on Super Angel. on angel all right the new year is here and it marks a fresh start for your small business and you are going to need talent to pursue all of these new efforts you thought about over the break so we're hiring a ton of people at launch customer support we need another producer for

this week in startups we need another video editor for this weekend startups we need a community manager and i need people who are driven hardworking and who have skills both hard and soft skills and you know where I'm looking for them? The best place to look for talent. That's LinkedIn jobs. You know that. LinkedIn is the greatest place to find talent. They have more than 722 million members worldwide and let's face it, we're now a remote company and I'm willing to hire anybody anywhere. It doesn't matter to me where you live. I'm able to post jobs on LinkedIn jobs with screening questions and they will get all of those job offerings, all of those amazing career opportunities in front of the right people, and you can edit this on your mobile phone or do it on

your desktop. Bottom line, LinkedIn is going to match your job with the right candidate. So I want you to visit LinkedIn.com slash angel. Again, LinkedIn.com slash angel and you can post a job there for free right now. That's right. They're giving everybody who hears my voice right now a free job listing. Some terms and conditions do apply, of course, because they're giving it to you for free. LinkedIn.com slash angel to get that first free job posting because we need to, need to get to work. We need to do the work in 2021. Okay, let's get back to this amazing episode. All right, David Tish is with us. You know, Plaid is definitely going to be your big head. That's pretty clear. What else was in that upper echelon of startups that you invested in in terms

of valuation, exit, et cetera, and meaningfulness in terms of returns? Totally. We've been, incredibly fortunate to back some amazing people who've built some great companies. And so in terms of sort of exits at this point, pill pack and flat iron, health and then over the summer, companies like Mirror or Bread have been real needle movers for us. But in the fund today, and again, back to that timeline point, these are companies that we were fortunate to invest in a long time ago. Airtable, Warby Parker, Scopely, which was a very early investment for us. Oscar and Barkbox Row, Zipline, which was two pivots later, a magical breakout company,

amplitude class paths. There's a lot of incredible companies. I'm forgetting some and we'll get yelled at. But essentially, 5% of your investments are going to drive 99% of the, you would say, 90% of the returns ultimately? I think we shoot for 10% being the fund drivers. If we can hit that 10% number, I think we will be very good at what we do. But again, back to the empathy side. Yeah. That means one out of 10. That means nine out of 10 are not sort of living up, to what you theoretically invest. And it doesn't mean that they're having personally bad outcomes, nine out of ten, but a lot are.

And I think we just try to stay thoughtful about how this business works and very long-term, focused in our nature. It really is interesting as you get more mature and more reps under your belt as an investor. You and I entering our second decades. If you think about this crazy profession where it takes 10 or 15 years lag to know how good you are. And you start to get an indication if you're any good, I think, in years five, six, and seven, right? You can kind of get an indication based on the follow-on funding to your seed investments if they've had any follow-on funding, right? That's a really good indicator because every time they go out

to market, they've got to re-establish, you know, a price of the company and get people to buy into that price. So that's a really great indicator, but not the only one. But how does it inform, your behavior, both this long-term 10-to-15-year outcome horizon, and then only one out of 10 has any material impact on the scorecard. It is a really bizarre game when you think about it. It takes 10 years, and only one in 10 of your bets is actually ones of being material for returns. So then what does a logical person conclude, how should I behave in the second decade?

And I'm guessing one of these things that you've done is double down on, hey, as a brand, we care about every investment deeply because you keep saying that, right? Like we're just lucky enough to get into these. We really care deeply about those. How does it inform how you go to market and interact? It's authentic. I think you develop that empathy, right? No, I do think it's authentic.

No, it's true, though. You develop that empathy because I think early on you're just in it for the chase, the rush of it. And you don't actually understand the other side of it. And when you're having a relationship with a human for 10 years to not. care about their journey is bizarre to me. And I think, you know, we were going to touch on the rest of the ecosystem and the other investors. I think believing your markups are real is a huge mistake. It's not sort of what you can drive your business decisions on because there are

investors out there that will mark things up and those don't end well either. And I think given the 10-year time arising, you've seen things not just go up and emerge, but also go up and fall as well. And those are the actual lessons to me is don't count sort of wins until the story's over. And I think for founders, it's the same way, right? A great series A, B, C is not indicative of the company fully working. A lot of the times there's a lot of risk left on the companies and execution risk. And so the old don't count your chickens before they hatch is really super important here.

And the feedback loop is 10 years. Right? That's the crazy part. It's not just like I'm getting some feedback along the way. It's the full feedback loop of are you sort of making an investment monetarily that's going to pay off can be, you know, 10 years. I think the other side of what I'm saying is that not all investors are very good at this. And you have to appreciate that, you know, when a company is raising around and they go to market, there are investors where you can feel good. If Sequoia invests in one of your companies, they are really good at this. And they're discerning and they have the best deal flow of anybody. So therefore, if you clear market with them, you have beaten out so many high quality companies, right?

And they'll miss too, but they're really good at this. Like everybody wants to be Sequoia, even if they don't admit it. And there's another handful of funds that you have confidence that when they are underwriting, benchmark. Amazing. Andresen, Founders Fund, you know, Thrive Capital and what they've built, unique quality fund. in Union Square Ventures for years. First round as an early stage investor. There are great investors in the ecosystem. And a lot of new ones, as you alluded to, that are emerging.

But they're also bad investors. There are investors that don't do well by the founders and are sort of in the business of trying to tell founders how to build companies. And that's something that I think I've learned over the past decade is dangerous. That not just, I mean, think about this, right? How easy is it to be a venture capitalist if you have capital to invest? So if you have investors, all you do is you have to, but you have to hang a sign on your door. Right.

I give people money for a living. And if you are a company and you need money and you go to the market and the top investors aren't going to give you money, you come down market. And when you come down market, not all money is created equal. And that's something that I've seen over and over play out. Well, I mean, and it is very rare for a founder to come out and talk about when things go bad, right? But Ryan Callback from CircleUp was on episode 1141. And he went, I don't know if you saw that.

We had a nightmare board member. What was your take when you read Ryan Calbex, you know, he released the email he had previously sent like a year earlier to this board member who was, you know, calling in from his phone and was, completely, you know, deriding the founder and the company and just incredibly negative. What was your, according to Ryan, and we invited the, I forgot the name of the guy, Nick will remind me of who the guy was that was the board member. But I don't want to shame him, but I did invite him to come on the pod and he ghosted me. But what was your thought when you read that? What was collaborative fund?

Paradox of all paradoxes. Look, I think it's important. You probably were in a collaborative fund. Are they the worst VC in the world? or are they I think it's important to have the feedback from entrepreneurs

out in the ecosystem but that's not how it really happens that's a public side of it and I think it's important to sort of just tell stories it look not all investors are going to behave well for us what we get asked

all the time from founders like how should we know if you're good or anything like and my favorite soundbite and the way that I answer that question every time is call anybody we've ever worked with. Talk to anyone in the entire portfolio.

And whoever they pick, I have to be confident that that person is going to say positive things about us. My lifeblood in this business is my reputation. And if we as a firm don't have customer satisfaction across every company that we invest in, we're screwed. It's going to come back to bite us. And the deals that are competitive that are doing diligence on you as an investor are going to turn you down because you.

your reputation did not qualify for them to choose you over the other competition in the market. This is the best advice for founders is just literally do the backdoor references. And just to put it out there, Craig Schoferro of Collaborative Fund, come on the pod and talk about it. Like, I mean, he had his say, you should talk about what you learned. But I think, and I think founders will respond, especially in a positive. or negative light, right? If you are neutral, they might not engage. But if they love you, they'll reply to a cold email. And if they don't love you, they will reply to a cold email. Absolutely. And the reverse is true for founders. I had emailed a mutual friend of ours and I said,

you know, hey, what do you think of this company? And my phone rang within 30 seconds. And I was like, oh, that's interesting. Yes, I understand what you think. And I answered it. And he was like, okay, here is all the fraudulent crazy stuff that happened at this company run. You know, like I'm, this is one of the investments I regret more than anything. It's a life lesson though, right, Jason, is you have, you have one reputation. And if you blow it, people are going to talk about that behind the scenes and it's going to impact you. Is it going to stop you? No.

Everybody finds a way to sort of go forward, but it's going to impact you. There will be moments in time where you and a founder don't see eye to eye or you disagree about what should be the next step in a company when we get back from this quick break, I want to know how you handle irreconcilable differences or roadblocks and try to maintain your relationship, even if you feel the founder is doing something that is not in the best interest of themselves, the shareholders in the company, the stakeholders, and the company, when we get back on Angel. Do you ever wish you got to invest in these incredible IPOs in 2019 or 2020? Well, our crowd investors did invest early in many of these awesome IPOs, we're seeing people who are able to wet their beaks from the Our Crowd

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for Box Group, you know, many of them. And we're talking a little bit about reputation, super important for Angels to think about, especially if you're going to become a Super Angel, and obviously people are going to do those dark reference checks. But let's be honest, you can make a mistake investing in somebody. Founders, I think, self-select for charisma and their ability to convince people to invest in them, either with their time and coming to work for them or investing time and buying their product or investing, literally buying shares in their company.

You can make a mistake. Certainly you've made a mistake and backed companies you regret or founders you wouldn't back again because of something. Take me through a situation without naming names, and you can make it an amalgamation or you can blur it however you like to protect the innocent or guilty, as it were. But take it through a scenario where you didn't see eye to eye with a founder and it was clear the relationship wasn't going to work. How do you handle that

disconnection? I think it's a quick answer. And I think this has changed over the course of my time doing this. It's their company. I'm not in the company building business. I will help. I will advise if they don't want my advice, they don't have to call me. If they want my advice, call me. If they disagree with it, hopefully we can have a productive conversation about it. But it's their company. I come back to it, right? If they're going to to lose, I'd rather a founder lose on their beliefs than on mine. And I think it's important to respect their choice and their path. And I'm never going to change the amount of the percentage of companies in our portfolio that don't work. So I don't try to spend my energy or mentality

fighting. It's just not interesting. I'd rather watch them run the experiment. And if it doesn't work and they were great at running the experiment, well, let's do it again. I feel like some of our best investments today are second-time entrepreneurs where their first company didn't work as well as they wanted to. And those are the opportunities that I think being in this business a long time unlock. Ah, so backing the entrepreneur second time is a real secret. I've had this now. I've backed Josh Williams, one of my first angel investments is gollala, then the last guy.

Now your newest investment is goala. And my newest investment, that was Gawala. Yeah. Funny on that works. It's so funny. Like, without going into too much detail, you know, our shares in Facebook were locked up for some technical reason for some long period of time and eventually got some shares in Facebook. And I think it wound up because Facebook accelerates so much that maybe it was a modest return for Gawala 1.0. But now they've got the IP back.

And, you know, last guy didn't work out, his second company. And now here we are. We, you know, when he said he was going to do it again, I was like, where do I write the check? And he's just like, wow, Jason, you're amazing. like you're literally going to bet on me a third time. I'm like, how do I not bet on you a third time? We're an investor in a company called Roe, the men's health company. And Zach was a founder.

We backed in his first company right out of college. You mean Roman? We would know it by Roman. Roman. They were on your TV on any single sports game you watch. And Zach came out of college, started a company, went through YC. We invested. The company was a great product, didn't work out.

Zach sort of went back to the drawing board for about two years and had some stuff he dealt with and came back and started Roman, pitched us. We were their first investor in the pre-seat round by ourselves, and that company is awesome. Wow, congratulations on that. Did they go public or they're spacking? No, they're private and doing great and still on your TV. Yeah, no, I mean, everybody go to get roman.com.com slash twist. Go to get roman.com slash twist to get you're free. They're advertised yourself on this podcast.

You don't, you don't judge the first sort of company as a net like return. You judge the experiment. How great was this founder? I think the other thing you were asking earlier about this world is the markets change, right? There are a lot of investors. And the competition, if you will, is fears. I think you asked me how we changed. We're quirky.

We haven't changed. One of the strategies we've taken is to just try to play a long game here. We are who we are. We are who we say we are. And we will continue to be this style of investor. I think what that does more than anything is tells the market and tells the founder that we are going to be consistent. So when we write an early stage check into your company, two years, five years, ten years later, we are not suddenly a gross stage firm. We are not suddenly leading series A's and sitting on boards.

by committing to this style of investing, we are aligning ourselves with a stage and a style of investing that we believe we are great at. We want to be, our craft is early stage investing. We would like to be the best early stage investor. It's not a lead investor. We don't sit on boards. We don't want to be a parent in the room. We want to be your friend. And that's not said in a, in a disingenuous way. We actually want to do exactly what we're doing for the rest of our careers. That's a promise to the people who take our money. And I think it aligns us in the right way to say, this is what we do, and we're going to keep doing it so you can rely upon that consistency.

Now, when you went out to raise your fund and you had LPs, I'm certain that people brought up with you that concentration is a critical word, right? What a good of logical word. Yes. They love that word. Concentration. Concentration is what matters. in returns.

And ownership. And ownership, percentage ownership. I know when I talked to folks, they looked at this like, you know, in their minds, a mess of investments. And then they would pull up like, tell me about these three companies. I was like, yeah, that founder ghosted me, never returned it. I think that one absconded with the laptops. And, you know, and this one still hasn't shut down the company.

And I'm getting tax notifications about it. Like, it's so messy at the stage we're talking about here. And there's so much, you know, collateral damage and just, Etrious everywhere, you know, from companies nine out of ten failing. Whereas with a company that does series Bs, you know, maybe they have one out of four fail and two return something modest or, you know, half their money and then one out of ten does it's really nicely for them. It's a whole different ball of wax, right? Totally. And what was your answer to them about that concentration question and ownership? It's the crux of our conversations with outside investors. I think the first

thing is we are who we are. And we're not going to be apologetic for it. And we, ended up finding people who believe that the way we approach our business makes sense. And we can articulate in depth why we think it makes sense. I think fighting for the win, right? Because at the end of the day, there's one firm that gets to lead the round. And that's the firm that is concentrated with ownership, as you've alluded to, which is the core of the venture model. That's what historically has been the VC model by 15 through 25% of a company in a round. and hold on to your pro rata, sit on a board and build the company. I think it's a great model for the best firms.

I think it's a mediocre model for the mediocre firms who will inevitably have mediocre returns. And they are not destination firms. So if you are going to compete at the Tier A level with that model, great model. I don't want to fight that fight. I don't think it's that interesting of a fight to fight. And if I beat Sequoia regularly, like something's wrong. Like, I should not beat Sequoia in a head-to-head battle for a deal. And so why am I fighting?

Instead, what I want to do is invest in great companies. And if I have a product that can invest in great companies, that's the product that I'm going to sell to the market. And that product is we're going to be on your cap table, second, third biggest check in around. We will help you put together your future finance. things. We know everybody. We have a consistent, trustworthy relationship with everybody. And math-wise, I'm pretty confident our model works. But pro rata is, and maintaining, you know,

that prorata for at least a round or two seems to be important in terms of outcomes mathematically. So do you require prorata to make an investment? And, you know, if you're writing a 250k check, that is a major investor threshold in most people's minds. You should get pro rata. And then do you take the pro rata? We try to support our companies for the lifecycle. And we have an opportunity fund now. And so we can deploy capital up through a series CD round and try to maintain if not increase ownership. And that's only going to happen if they like us. So you can have like you've been here. You can have contractual ownership pro rata rights. And then the lead or the company decides, no, we're not going to honor those. And either you sue the startup, which then you're out of. a business, or you relent and say, okay, noted. And there is a third option there. Yeah, fine. You talk about them on your podcast.

I lost stuff. No, I just go directly to the investor who's trying to take our prorata and I say, why would you do that to me? Sure, but that works sometimes. I'm just saying there are situations. And the real answer to me is if a founder doesn't want me to take my prorata, I did something wrong. I didn't add enough to their journey so far that justify them wanting me back.

And so we try to earn it. It's like, again, it sounds like a nice soundbite, but it's true. And this is a decade's worth of learnings here. It's like, I have to earn what I get in this world. And- See, I agree. I like your philosophy, but I do think that there are bad actors out there who will say to the founders explicitly, screw your early investors,

we're only doing this deal if we get to do this, blah, blah, blah, blah, blah, and take away their rights. But then I'm not going to send them deals in the future. And I know I'm playing along. So yes. Have you had that happen with the firm? Oh, yeah. How do you?

They don't know how much I dislike them. Oh, they don't. So you don't call them and say, hey. No, they just never see things from me again. And when I'm talking to a founder and they want to know who to raise from, well, that firm is not or that person is not on the list anymore. So they don't even know the ramifications of their behavior. See, I make it explicit to them.

They did it to me. They did it knowing that I am a repeat actor in this industry. So if they want to F me over, like, I remember. I know how this works. It's a classic ghost move. See, I take a different approach. You grew up in Manhattan, right? I used to be louder and I used to be more power.

I just have taken a different approach. Is that for your, is that because of psychotherapy or something? And you didn't want to be confrontational. No, my shrink is, my shrink's great. But no, it's, I think it's derived from like, you knew what you were doing. doing and you effed me over. Why did you do that? You clearly don't give a shit about my relationship with you. So noted. Now I know where you stand. You don't know that I know that. So game on. And it's not passive. It's instead passive aggressive or like cautious like like secretly aggressive.

Yeah, no. I mean, it is definitely a strategy. I tend to pick up the phone and call the person. and then I just tell them explicitly what's going to happen. And they literally, I've done it four or five times in my career. It happens every two years. And four to five times I've done it, the person has been apologetic. And then, you know, kind of denied they even were going to do it. Yeah, look, if we want something, if we want something, we'll ask for it. We have great relationships.

But I'll tell you what I've learned. The best firms don't do it to you. Even though they have reputations. No. They don't. Sequoia would never do it. The best firm. firms don't do that to you. It's that next tier of firms that do it to you. Right. And why do

they do it? If you were to do the psychology of it, why do it gets misbranded in this industry? What? The later stage investors. The growth stage, the crossover investors. If I am a founder and I'm looking at sort of late-stike, there are firms, whether it's addition in what Lee Fixel is building, or, you know, you can look at green oaks. These firms that are not loud and in the market, these are great investors and they are incredibly helpful to companies as they scale. And they also don't do it because they understand the long game here. And to me, what happens is there's a tier B and a tier C of VC and those investors don't understand how to balance sort of selfishness and ruthlessness with some long-term relationship building. And that's what I've discovered is that if you try to

work with the best investors, they are very authentic, genuine in their relationship building and will be consistent in their behavior. Yeah, it's interesting. Tell me about Lee Fixel. You work with him, Addition, former Tiger? Yeah, I think, I mean, if you look at Lee's portfolio from the outside, you know, while he was at Tiger, Lee made early investments into some monumentally great companies. And he was, you know, not a gross stage investor only at Tiger.

Tiger, it was, you know, companies like Warby Park or Harries or Peloton. Peloton and Flipcar, early investments into those companies. And so I think Lee being on his own and building addition from the ground up, you know, his brand's not fully out there yet as a standalone entity. Addition isn't. But I think the people who know Lee and are fortunate enough to get in front of him, he's he's a world-class investor who's in our space and will looking back on this era be one of the true standouts yeah and he's raising a 1.3 billion dollar fund with addition or he's raised and according to reports a third of that will go to early stage which is 400 million into early stage startups and then two-thirds into growth but he doesn't do any press but

let you know Lee come on the pod let's just chop it up you can do it like a you know for just it for the deal flow. Just do the deal flow, Lee. We've invited him on the pod three times. He hasn't ghosted us. I don't think he even returned our emails, which is a, which is a weird one. I think you hear about these sort of names in our industry who are good at branding or good at tweeting or get their names out there. But when you go get the sort of reputational check on people, they're not all consistent. Yet, you know, the biggest and best firms get hit on because they're easy to hit on, but man, are they good at what they do? And I think that, you know, we want to be in this business for a long time and play alongside of everybody. And that's what we've we've sort of watched over the years is that people are

the best of what they do. You know, Union Square Ventures and the quality of relationship that they build with companies, it's admirable, right? They see these investments in these companies and people through. And they're awesome. And, you know, And Driesen and founders fund and, all the others are great to work with as well. So I, um, and benchmark and thrive, um, etc. So when you, uh, look back on the career, what patterns do you see? That sounds like I'm retiring. Yes. Now that you're, you're a 36 year old LeBron. 32 year old LeBron and you're still in the league. No, I mean, you have crossed the Rubicon, by the way. Once you take other people's money, that just changes everything, I think.

Noted. And it definitely gets inside your head. So really, two important questions I want to wrap with here is one, how does your behavior change when you're investing other people's money? And then I want to talk about, you know, when you look back at the pattern and you look for, you know, why did these ones break out and these ones didn't, you know, do you find a pattern in your own ability, your own placing of the bets or the nature of. or the nature of the founders and their products.

When we took outside money, I did my very best to tell every one of our investors that we're not changing. We are who we are. And we want to be great at what we do. We want to be great at our craft, a cheesy way to think about us like the benchmark of seed. If we can just be this small boutique firm that invests amazingly well across the seed space, I think that's a great sort of dream to have. And I think that's how we sort of view ourselves is to go out there and build the best early stage firm we can build.

And I think our investors hopefully align with that. For me personally, I don't panic every day. I like am I have immense fomo. I'm neurotic and panic that like we're not good at this tomorrow because you only know how good you were like 10 years ago. And so I feel like when I took other people's money, I ratchet. up the pressure. And I have always worked incredibly hard and I feel like I just keep pouring my energy into working harder and trying to be good at what we do. And so I have a lot like, it felt like a reset where, yes, we were good for nine years, but now I get to reset and start

from scratch and now I have like nine, 10 more years to prove that we're good. Because they don't benefit from my history. They only benefit from this 2019 starting point. So I have to be good at what I do. When you look at the pattern, I think it's, it definitely increases your focus and intensity for sure. When you have other people's money, you know, going in alongside yours or becoming the majority of what you invest, which is probably what will happen now that you have these giant funds. And it does, I think. We're a boutique. We don't call them John. We're a boutique, Jason. Yeah, I know. Thank you.

Giant for seed, I guess, is now change with KOTU and, you know. We're a boutique firm based in New York City, just harmless, nice, quality investors. I don't understand how these like very large seed funds that are 400 million or something are going to be able to write. That's tough math. Yeah. How do you do 400 million dollar investments and then manage it? How many partners do you need to have? How many company, if you're investing in one out of 100, you have to do 400 investments,

you have to meet 40,000 people? Really? You're going to be 40,000 companies over what period? The 30-month period? That's 10,000. That's 1,000 companies a month. These funds are now 12-month funds. Don't be silly.

Yeah, and if they, well, if they deploy it, let's just say they deployed over 30 months, just to be reasonable. You know, putting 10 million to work every month. That means you're doing 10 startups a month. If you had to meet 100, it means for each of those 10. You have to meet 1,000 companies a month. If you're working, you know, 20 days a month. you have to meet 50 companies a day.

It's just math people. It's 50 companies a day. The only, I mean, an associate can meet three or four companies. What's my pattern recognition? I'm cutting you off to come back to your refocus. Let's go to pattern recognition. Look, like, you have a rubric right in your head when you're meeting an entrepreneur. It's team, which is like you say that word, but man is that underrated.

And it's important to understand what that actually means. So team, market, idea, product. Those are the four areas that you're looking at. And then why is, in essence, what you're trying to ask, why is this team the best team to build this product right now and do we care? And that do we care comes back to us? It's a tasting. Like, am I interested in this business?

If they're right on everything they're saying, like, does it matter? Is this something I want to invest in? And that's something you never push on to the entrepreneur, but that's your internal, like, taste judgment. Do I want to be involved in this? Yeah. And there's sometimes when a founder makes you care. Like, I don't really care about what they're building, but I have to give that person money. And that's a different lens of it.

And that's when the team spikes so big that you're like, here, hope this works. Right. I don't really care, but you care enough to make this important. And then it comes back to team. And to us, the biggest pattern I've taken away is you need to fund people who are strategic thinking geniuses. And genius is not this academic implementation of that word. It's a, you have to fund the best.

The only companies in a space that are going to work are the best companies. And so as the founder that you are funding the best and is the team that you are funding the best, if we see a deal, what's the risk of that deal? Is the risk of that deal technology, product, marketing, sales, team building? And you identify that risk. And then you say, is the person that is going to solve that risk in the room right now? So three business people building a technology risk company, we're out. On the flip side, three technologists building a sales company, if they are not aware that this is a sales.

company, well, you shouldn't probably fund them. And you have to sort of drill it down to what's the risk of what they're going out to do. And finding businesses at our tech risk, which I think is where you lean heavier into just the engineer driven founder, those are different than I think a lot of the software eats the world businesses you see today where go to market and product become vital. And that technical team needs to have an appreciation for those areas. It doesn't mean in dev tools you need to have, you know, a magical designer, but it does mean in bottoms up SaaS, something like Airtable, it's a product company. So problem team match fit.

Yes. Right? Totally. Yeah. And you can't solve the problem if you don't have the people to solve the problem. And when people say it's a people business, that's really what they mean. But there are some people who are just really good at attracting talent. So that is a superpower, right?

That next one of like, is the person sitting in front of me? And it's a CEO that you're looking at with this lens typically. Is a person in front of me capable of standing in a room of 100 people and 1,000 people and leading an organization of greatness? And what is the quality of those 100 or 1,000 people going to be? Can you see this person attracting great talent? So in order to hire, like it gets, again, it's a nice soundbub. But in order to hire somebody to your startup, you have to convince somebody to stop whatever

it is they're doing and join your journey. Like that is a big ask. And if you're going after great people, that's a huge ask. So you're going to have to convince somebody. Especially in a market, right? If you mentioned before how many investors there are, one of the existential risks we have right now is there's so much money in the market that that getting somebody great to fill a position, well, that person can go start their own company or being independent, you know,

and if you are great, if you have a great background and if you've done great things in your career, to join someone else's company is a monumental ask. And there are companies that are able to recruit those people very well. And there are companies that can't. And if you can't, well, who are you recruiting? You can have an answer for like, I can't hire established talent, but I am going to be magical at hiring, like, talent. Emerging talent, whatever it is. Talent that I identify, yes, from pockets that, but a lot of the times it needs to be inherent within the team where those people are going to come from.

So did you go to school with them? Did you work with them? Have you already identified and met them? So if you're not from within an established network, you can do things to get around that sort of limitation, which is start business. building a ground-up network on your own. Money doesn't sort of unlock the ability to meet people. It unlocks the ability to pay them, but it doesn't unlock the ability to meet them. So if you coming into a seed round can't identify where some of the three or four first hires are going to

come from, I think you're behind the ball. So we like we like to look and say, like, have you done all the work you can do up until this point? And that's in this market where things can get funded in hours, not always going to be the case. But a lot of the time, that's sort of what a founder will do is I'm going to push this as far as I can every step of the way. Yeah, it really is like an amazing skill to be able to get somebody of high quality to not start their own company. You know, I was talking to this about somebody was like looking for a podcast host. And I was like, you do realize like it's so simple to start a podcast. that your ability to then go get a podcaster to work on your project

is going to be hard because they can just show up and do their project. So therefore you're either going to have to develop talent in the podcasting space or and then you're going to lose them and it's going to be hard to keep them. It's just some businesses, if it's such an open playing field like podcasting, it's hard. And you're seeing it now with journalists, you know, leaving to start their own publications or substacks or podcasts or other things. they can become independent so quickly that they become functionally unhirable, right? It creates this amazing admiration for the teams that do scale with like depth of talent,

right? Amazon, Netflix, Tesla. And you go back to early Facebook. Like the first 50 hundred people at Facebook, that depth of talent on. You don't see anything near that today. You can't get that. PayPal. PayPal was very similar.

But today, in today's market, when everybody, can start their own company. The idea of aggregating 100 people at that level is so unique. Stripe has been able to do it. They're probably the company in today's modern startup world that has done that the best, right? What do you think it takes to do that? Founders who are able to tell you their story and their ambition in a way that makes you give up your independent dream and say like, I'm going to do that with them and a business opportunity that you can intellectually align yourself to. Yeah.

See, that's, it's such a big problem you're working on. It's got such amazing transcendent potential to be a trillion dollar company, whatever it is, meaningful in the world. So that's your point about the storytelling, right? And I have to join you. You, oh, my, I've never met any. It has to be this lens of like, I've never met anybody like you. You are better than other people.

I've ever met. Adam Newman. We work. It's just, it's so transcended. I have to be on that. Were you involved in Wework? You're in New York. I got to ask you. You must have interfaced with Adam Newman a million times. We cost on We work from afar. We didn't actually see the deal. We we kept hearing about WeWork as a place where companies were going to work out of and never asked like, what's WeWork? We work. We just thought it was another co-working space. So no, I never saw the deal. I've met Adam before, but we were not involved in WeWork. What's your take on what happened? there, like the out-of-control founder and the out-of-control business. I think the media does this world no service.

I'm not going to sit here and make excuses for WeWork or talk about what they did. But the media is, like, this is why am I quieter than I used to be? Because all that happened in our world was it used to be startups are cool. Like this is intellectually and media-wise. academically fascinating, people starting a company. And then what happened? And oh my God, here are these unicorns. Let's like talk about the magic of these companies. And then what happened was it shifted to unicorn hunting. Okay, that company's good. Let's figure out how to get it. And it's this, and I understand why those are more interesting stories. More people read them. But in reality,

what happens is you bring down things that have created a significant amount of value in a relatively positive way. It doesn't mean that the founders that have been chastised publicly are all good and it doesn't mean that there's not actual bad HR issues or bad companies and those things should get rooted out. And I don't in any way support cultures that have done harm to the people that work there. But I do believe that the way the world shifted and it's broader than just tech, right? It's the whole world. We're in a- No, the whole world has become like so polarized, whatever, the Trump presidency, whatever's going on in the world. And it's a attack mode. And so I just, that's not what I do this for. I don't do this to- So you've basically said, I'm going to put my

head down and just go to work and I don't really care about this other noise that's going on. But you do have this anti-capitalism kind of vibe in America that I thought we'd never see, people are more interested in some cases in a handout than an opportunity and, you know, more interested in universal basic income than investment. Or they're just the loudest ones, right? Or that's it, yeah. And that's what the flavor of this moment is. And it's because of the income disparity, right? And it needs to be solved. And it's not to ignore those voices. It's to say we've created a system here where too many people are being left behind. The irony to me, me is that the best thing that will happen to fix that is technology. It doesn't mean that the

founders of these technology companies aren't going to be the biggest winners, but the distribution of opportunity that the internet and software has unlocked is the magic of this moment. I mean, if you think about, you know, the ability for people to go make money on Etsy or to rent an extra room they have on Airbnb, all of these things. Or to learn. Or to learn, right. The amount of information and education that is out there for the taking is because of technology. It's unlocked that in a way that we couldn't dream about 20 years ago.

Yeah. And you can connect with people. So it's not just learn. It's network. It's open up doors. If you, if you, like, and it's not to say that it's equal, but it's out there. And I think that technology has done more. or to create opportunities, this whole creator class that you're seeing come about,

these solo entrepreneurs who are just building independent businesses. You get shit on in our world for building a lifestyle business. A lifestyle business is a wonderful thing. It is allowing you to have a lifestyle that you want. Yeah, people got that twisted. Lifestyle business originally meant that you're going to have a kick-ass lifestyle. you're going to have a lifestyle that's so good that you would not get on the venture industrial complex treadmill. Which is a good thing.

Yes. You're going to make a million dollars a year from this business working three days a week and be skiing four days a week or hanging out with their kids for days a week. Or you're making $150,000 instead of $60,000 in a job that you're happy with that you control. And the platforms that allow you to work independently versus for a boss, even if it's not the end outweigh. you're looking for, they begin to unlock parts of growth that I think are beneficial to society. So I struggle with this notion of tech being evil. I struggle with this notion of all these entrepreneurs doing things that are negative for the world. I do believe that if I look back over the past 15 years, at the startups that I've watched start and grow ones we've been involved with and ones we haven't, the net broad opportunities that are created here,

are immense. And it's what leaves me optimistic for the future and not just sort of critical of the present. It's such a great observation. And if you look at what the gig economy did, I know a lot of people like, oh, the gig economy is so terrible and people don't have a safety net and all these issues. When you look at what the gig economy did is they took a lot of jobs that were off the books and that were jobs that existed in the underground gray black market of employment, i.e., you know, illegal immigrants or people who were getting paid off the books, like food delivery. Food delivery was done. People don't remember this, but when I was in the restaurant business, especially in New York, you know, somebody was an immigrant from another country.

Especially New York, right? Especially New York. So you'd have somebody who's a Chinese immigrant or a Mexican immigrant or previously an Irish or an Italian one, whatever it is. New York's the melting pot. And you had this rotating group of immigrants come. And they would be given $2 per delivery in cash and then whatever they got in tips. and they would just sit in the back of the restaurant and some nights they get zero deliveries and they might throw them $10,

sometimes they might get $7 and they would make minimum wage or double minimum wage, but it was this sort of like underground economy. Same with people picking, you know, fruit or something like that in a field. And now it's an actual job. It's hard for us in our seats in a very fortunate position in life

to put our self in those shoes. However, the opportunities that these platforms have created are independent and they allow more control. And if you play this whole thing out, yes, there are flaws. In given moments of time, there are bigger flaws, right? As something is scaling, it's more broken than when it's scaled. But when you get to an equilibrium, if there's supply and demand,

and the demand is, I want delivery food and I'm willing to pay X or Y for it, it will normalize the supply so there is an equitable trade. And if on the supply side, somebody can have an independent life through that unlock, that is a tremendous movement in the right direction for our society. And even, you know, Facebook and Twitter are getting, you know, railed on for the censorship slash freedom of speech issues. And I agree, right? There's a lot of complexity in there. There's not a simple answer.

Just like, by the way, most things in life, there is a middle and there is a gray. Yeah. Nuance. Yeah. So there's a lot of nuance in that. And it's not right or wrong. But what Facebook and Twitter have done for the world is a net positive. A hundred percent.

It's given people who don't have voices of voice. It's given people have an independent channel to speak. It has created relationships for people that were never able to have. have them before. And, you know, Facebook, because I think it's the monumental one here, created this social part of the internet that today the offshoots are everything in, in that world that have benefited. Tinder, right? Tinder gets shit on for being whatever it is. But like, man, the amount of marriages that have happened because of Tinder is such a net benefit to the world. You don't have to random, I met my wife in a nightclub. There's a normal story to it.

But that's the nice sound bite to it. But like, you don't have to go out. By the way, that was how people met. In the 80s and 90s, like you met either in a bar or club. Or through a friend. Or at work? There's a democratization of access that has happened through all of these internet platforms that I think the world continues to judge because there's a lot of wealth in it and a lot of

wealth creation. But there's a lot of challenges that these platforms have that are not always perfect. But I do believe, you know, Amazon is a well-meaning company. They are not out to harm the world. They are definitely challenging to businesses that are not capable of competing, but they are not out to harm the world. And I look at all the big tech companies and I just don't see evil. I see incredible progress in terms of the things that they've unlocked.

It's pretty amazing. When you look at there's an incredible graph of how heterosexual couples, couples have met data from 2009 in 2017. It's a nutty graph. I've seen that graph. It's crazy. The online graph is almost a hockey stick. It's a hockey stick that they met online.

And like met in a bar or restaurant. Is the reverse hockey stick? Well, it's actually, it's stayed somewhat flat. But met at church is there's like a couple that crashed. Pummeted. Neighbors, I think, plummeted. met in school plummeted, met from family, massive decline, 30% down to 6%. So to sit here and criticize any of these things when in reality they've actually distributed

opportunity. I don't know. That's like, that's what's so cool about what we get to do. You get to work with people who in the end make these massive impacts, right? Your investment in Uber, the impact that Uber's had on the world and now Uber, it's insane. And the width of that impact. It's not just in America. It's all over the world. Global. I mean, that was when I had my mind blown is when I got off a plane in Tokyo or. And you press a button. Cutter or Sydney. And you see an Uber logo and people are on an Uber line halfway around the

world. It was just mind-loyal. And what Uber did was trained people that you press a button on your phone and something in the real world can happen. Yes. And that company that trains the world of that unlock another 100,000 companies after them to do that same type of... The on-demand economy, right? Exactly. And then if you look at, you know, my belief is those jobs, entry-level jobs that people could have on demand, those used to come with conditions. You show up at 6 a.m. and you're done at 11.

And you have a bad boss. Yeah, and you got a bad boss and you got to travel 90 minutes to the job. And so it was arduous and painful. And then people then said, wait a second, I could just work four hours and I could pick which four hours I work. I'm not going to go work at Starbucks or Apple or Walmart or some other bad job. And those people had to raise their offering in price, right? And Apple, Starbucks, and Walmart are probably at the best version of this. And the pressure to me is that hopefully what we're doing is rising the tide across the ecosystem. A hundred percent competition in the free market,

does that? Everybody needs to put forth a product that can attract talent, that can retain talent, and that can inspire people every day to work there. What Starbucks has done with free education to me is an inspiring. And healthcare too. Right, corporate. So I just, I feel like tech and technology wise, some of the cost savings on the supply side. So if you look at where logistics and supply chain innovation has improved,

these are unlocks for big businesses that can get passed through. What's the biggest issue to me? The stock market rewarding quarter by quarter earnings, which don't allow sort of long-term thinking and long-term value creation, which punishes the entire system. Well, not the private companies. So, I mean, in a way, when you say it like that, it's actually the private companies get to think in a decade long way, don't you think? And then the public companies.

Yeah, and then show up and lap the public company. Exactly, which is like what Uber did. Like, they could actually think long, right? When people are like, all these companies are losing money. for a decade. It's like, also known as an investment. But it just, I think there's a like cultural idea that the, the world should take a step back and sort of look a little bit longer out. And that's why you can be prepared for things like a pandemic. You can be prepared for sort of economic shifts and try to invest, as you

said, investing in the future, invest in education, invest in public health, invest in infrastructure, not because the payoffs tomorrow, but because of the, A payoff in 20 years is going to be so monumental to the world that it's worth doing. And coming back to our business, that's why the timeline that I operate on, this decade-long timeline, it's hard, but that's what you sign up for. And you just have to stay patient. You know what? Hard, but going through this mutual couples therapy that we just did for the last 70 minutes.

It was good. It makes me inspired in a way. I kind of want to stay in the relationship with you, David. I was thinking this was the end of the relationship. now I kind of feel like I want to re-up for another decade with you. There's always season six, man. We got it. We got it.

All right, listen, David Tisch, one of the great, authentic, early stage investors out there. Just grinding it out day after day, making those investments, 30 a year, 40 a year. How many people you got working out the firm now, now that it's a firm? We're a team of six. I have amazing people that work with me that I feel fortunate to work with every day. I have 12 people now, six work on, like the podcast, six work in the investment company, basically. and it is now like, whoa, this is like becoming a bit of a factory, a bit of a firm, right? And it's going to be all these interesting things.

And I've been together for 11 years. Our partner, Nimi, joined six years ago. Greg joined six years ago, left, but missed us and came back. And Adina and Claire have been with us. Claire, Claire came left and came back. And Adina's been blessed for two years. Yeah, we've got two boomerangs. And I feel like that means you're good.

Boomerangues means. Yeah, I've got a couple of boomerangs. It takes a certain type of boss to curate boomerangs. Like, I think you have to be an even-kill person who's like, oh, you want to explore some of the things? Good luck with that. You know, hire and train your... I get sad internally.

Don't kid your... I have feelings. But look, I think we're a unique team, and I think what's cool about us is we work as a team. And box group deals are box-script deals, not individual deals. Such a great way to do it. I mean, that's how Sequoia does and everybody else is like, you got to really think, like, it's a team effort,

and we rise and fall together, you know. And like, it's so random. like one investment over another returns the fund. And, you know, there was one fund that fought tooth and nail to not invest in Google. And basically that toxicity of passing on Google and that partner passing on it in that meeting just, I would say the name of the firm, but it's just that firm doesn't exist anymore. I name names. You're not naming names. It's cool. I'm not naming names. I can't remember is really the reason. It will come to me. I'd have been more David Dow, but I don't want to say now. But there was a firm that I think it was more David Dow that.

famously passed on it. If somebody will correct me from law. Oh, George Zachary told the story. All right. The receipts are out there. The tea is spelled. But you know, you don't hear about more David Dow anymore. Nobody knows more David Dow. But you remember more David Dow from a decade ago. I just think our business is about like actual alignment, right? And so if our team isn't aligned, we're not going to be aligned with the companies that we invest in. And, you know, we all six of us try to engage with every company we invest in because all six of us have a different network and we want to be again just real people in this business and that's that's how we approach our business so thank you for having me on yes let's do a deal together soon

deal i'll talk to you soon brother okay jason we'll see you all next time on angel and our super angel season thanks to our partners for supporting independent media like this week in startups