This Week in Startups - E1048: The Power of Accelerators E1 Steve Barsh, Managing Partner of Dreamit Ventures on top portfolio companies, focusing on specific verticals, tips for nailing accelerator interviews, follow-on philosophy & more

Episode Date: April 22, 2020

1:00 Jason thanks all frontline workers and intros Dreamit Ventures’ Steve Barsh 3:33 How did Dreamit start, what is the goal and how is their program structured? 9:43 How often does Dreamit follow-on with their portfolio companies, how do they think about pricing, valuation & leading rounds? 15:15 Steve goes over some of Dreamit’s top portfolio companies: SeatGeek, LevelUp & Houseparty and explains how SeatGeek pivoted while going through Dreamit’s program 18:20 How early will Dreamit Ventures go? Pre-revenue? What verticals do they focus on how do they improve their program? 27:24 What is the most important thing Dreamit does for founders: advice, anointing or money? 30:07 At what point during the process does Dreamit turn on the criticism? What questions do they ask during Accelerator interviews? 42:58 How much of Dreamit’s program focuses on the fundraising process? 48:59 Lightning round: How founders should judge accelerators, nailing interviews, multiple accelerators, follow-on philosophy, bridge rounds, top firms that Dreamit works with

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Looking to stay organized and in sync with your team? Try Notion. It brings all your notes, docs, projects, and more together in one place, all fully customizable. Get 50% off Notion's team plan when you sign up at Notion.com slash twist. Hey, everybody. Welcome to this week in startups. And I hope everybody is safe and everybody's family safe and you're doing the social distancing thing during this corona pandemic. As a disclaimer, obviously, thank you to all the people on the front line. Whether you're a janitor or delivering food or keeping the food supply up or obviously a nurse, a doctor, an aide, anybody on the front lines of this war. We appreciate you. And we're in awe of your sacrifice. talking about business, talking about people's livelihoods can seem to some as maybe inappropriate or off the mark during a crisis. But as we all know, the second order effects of this crisis are going to be people's

livelihoods. And we've seen record numbers of people file for unemployment and to keep the economy going so people can pay for their kids' school, pay for their mortgages, pay for their food, pay for their health care, their medicine, and to generally have the resources. they need to run a productive life. Well, a lot of those jobs come from startups. That is the driver of our economy. And the driver of startups over the last decade have been accelerators and incubators. So we thought it would be a good time to do a special 10-part series, and we're calling it the power of accelerators. Incubators is another word for accelerators. We like to use the word

accelerators. And during this 10-part series, we're going to talk to the different people who run them about how to get into them, how to get the most out of them, why they exist. And what has become kind of the de facto phase for first time founders and even some second time founders for starting up a company, which is you can do it and bootstrap it and not go to an accelerator. In fact, probably the majority of companies don't. But for those folks who are trying to get that rocket fuel going and trying to learn and build a network, they can be an incredible accelerant. And so we're going to do this 10-part series and we're starting today with episode one with Dream Adventure, Steve Barsh. They have over, have had over 350 startups go through their program.

Those companies have raised over 800 million and have a combined value of two billion. Welcome to the pod, Steve Barsh. Thanks. Thanks, Jason. Good to see you. Thanks for having us. And I'm assuming everybody is safe and your social distancing and you're working from home, I can see. We are working from home. We are safe. People went home about three or four weeks ago. Our offices are in Philadelphia, New York City and everybody is safe and well. Great. So tell me how did Dream It start and what is the goal of Dreamit? Sure.

So Dreamit started back in 2008, so about 12 years ago, 11 or 12 years ago. It was started by three entrepreneurs in the Philadelphia area that really in the beginning wanted to give back, wanted to help other entrepreneurs and other startups get their first start. So it started way back then and it certainly evolved over time. time. The mission and what Dream is here to do today is work with the best startups in the world. We've really evolved the program over time. We now focus on pre-series A startups. We like startups that are a little bit later than when we first started and we focus on three specific

verticals. But then the mission is to help find the best of the best and make them better and invest it's based in Philly and it's in person. It is based in Philly. It is not in person. So we got rid of that about three years ago. So it's hybrid location for this particular cycle during COVID-19 it is completely virtual, but typically it's hybrid location. We don't do, you know, you don't have to be physically present. You're with us part of the time, but not all of the time. And it's a 12-week program, a 16-week program. What's the duration of the program?

Program, each cycle is about 14 weeks. And some number of those weeks, they come to Philly and spend a day or two or 10 days. How does that work? Great question. I'll just run you through at a high-level what the program looks like. So 14-week program, they spend the first week with us in Philly. We bring all the companies in. It's great because we want to get to know them.

We want them to know each other. We do a bunch of social things, but it's a lot. It's very heavily programmed. They spend a lot of time with the different managing directors and that type of thing. They then go back to where they're from, wherever they're in the world. Most of our companies are U.S. companies. We have some European, a lot of Israeli companies that come in to dream it. A lot of West Coast, Silicon Valley, LA companies come in to dream it.

We go for about four weeks from there, and they go through a whole process. And then the next phase we do, and we get back together. And that's all over Zoom. We're doing intensive coaching and mentoring over Zoom every single week with all the startups. From there, they go back home. About four weeks later, we get back together and we do something called customer sprints. And that came from, we work with all these, you know, very technical founders in the different verticals we work in.

And they would talk about, well, I'm busy doing a dev sprint. We'd say, well, how about do a customer sprint? So then the startups get back together. We travel with them. A lot of times we go to New York. We go to Boston, Philly, sometimes down to Tampa. and for two weeks on the road, we meet with customers in their offices face-to-face. You're a secure tech company.

You're meeting with a C-S.O, Chief Information Security Company, Chief Information Security Officer. You're a health tech company. You're meeting with the VP of Innovation or the chief medical officer. So we go when we do those customer sprints. We're back together again, and it's all about building their pipeline, building their customer base, and getting exposure to great customers. Typically, they meet with about 20 customers over a two-week period face-to-face. they then go back to wherever they're from.

We work with them remotely, coaching, mentoring. And then the end of Dreamit, about four or five years ago, we killed our demo day. We found it was pretty much a waste of time because we found most demo days are, you know, yay, startups. Look at what our community is done. We're not about building community. We're about building startups. Community is a second order of fact.

So we then do a two-week bi-coastal investor roadshow. We email all the investors we know, say, here's the companies that have gone through Dreamit. here's 20, 22 companies that have gone through Dreamit. Who do you want to meet with? We do a very bespoke investor sprint is what we call it on the West Coast. We go to the Bay Area, a week on the East coast, usually in New York, Boston, and D.C. for our security companies. And it's all about helping them get their next round of funding. And what's the standard deal for Dreamit? So what do you get? What do they get? What do they get in that standard deal? What does that look like? So companies that come into Dreamit just to focus, I think,

It's a lot like launch, by the way. It's very Goldilocks. It's a great way. I love your expression on that, but Goldilocks kind of company. So companies to get into Dream, it's just to add that, right? We're looking for companies that have product,

have a little bit of revenue or have traction. They have solid customer trials going on or they have revenue. A lot of companies come into Dream it. They're already doing half a million to a million dollars a year or coming up on a million dollars a year of ARR across our three verticals, health tech, secure tech, and urban tech. So that's the stage we're looking at. They're pre-Series A.

So sometimes they've raised their friends and family or a seed round, but they're definitely pre-series A. So that's what we're looking for. The offer that we make to those companies is we look for a small amount of advisor equity in whatever their last round was. We're not setting valuation, and I can get into that. And then we look for an investment right. We look for about a half a million dollar investment right.

So we have the opportunity to invest up to a half a million dollars in the company after they've gone through Dream It. So different from other accelerators and other models. And at the end of the day, we think of Dreamit as a venture curve. firm. We're a venture firm with almost like a pre-investment program. And you look at a lot of venture firms that have like a platform team. So our platform executes before we invest. So they go through this process with us. We get this investment right. And we're looking to take that investment right. But we don't set valuation. So we're not writing a check for $120,000 for 6% of your company,

kind of an arbitrary valuation. And a lot of accelerators will say, well, don't think of it as a valuation event. It's a valuation event. So we float, right? We're not setting value. So whatever that lead investor comes in, we're going to decide if we're going to take our investment right. At the end of the day, dream it as a VC fund. We want to deploy our funds and invest in as many startups as possible to go through. And then what those companies, that's what we get out of it. We get that investment right and so what is the, you get a 1% of the company as a consultant or something? You said there was a consulting fee or something?

No, it's, we think of almost like an advisory fee. So it really, it usually comes in it around about $150,000 convertible security. we're not writing a check for it. We're basically getting a small amount of equity in the company. Got it. So the company was worth $10 million. You would get that 1.5% in lieu of cash just for running the program. Correct.

Exactly right. So it's that one, it's that. Yeah. And then after you make that decision with the $500K, how often do you actually do that? Half the time, two thirds, one third? Great question. So about 50% of our companies raise within six months of getting out of Dreamit. So about half raise.

And within those about 80 to 85% of them will write a check. The times that we won't write a check just quickly, if the valuation runs away from us, they do some, you know, they have a huge strategic investor. We're more of a financial investor and the valuation gets way run up or it's not a real lead. Sometimes we won't. But at the end of the day, we want to write checks. Our job is to deploy funds and invest in the best. So you want to see them get a lead.

If they can't get a lead investor, you're not going to just be the lead in that case. Correct. We don't lead. we don't set valuation. It's one of the things that's really, we think unique about Dreamit in our model. Again, we're not setting valuation. We're coming in at whatever that fair market value,

that FMV is. Fantastic. And then in terms of what they get out of it, obviously they're meeting those customers. You set up those meetings. And they're meeting all of those founders, all of those investors. So you're basically acting as an investment bank

in terms of doing the introductions or another investor. And as a de facto, Acto business development person setting up all those business development meetings. I would, it's a lot of business development. It's a lot like investment banking. But the other thing we do, and I think you do it too. And you talk to a lot of people on your shows about it, which is great. We beat the shit out of them. Our job is to find the best of the best and make them better. And we have companies that go through Dreamit that have been through other programs.

A lot of our companies are two or three years old. They have five to ten people. And they'll sit down with us in the first week and say the questions that you guys ask, well, you do deep dives. And we go through their deck and go through their pitch and go through their strategy. They'll say, no one has ever asked me questions like this. I've been working on my company for two or three years. No one has asked me questions. You're so insightful and so fast. And we'll say, well, there's a lot more like this coming.

And they're like, that's great. It's like, well, then we're going to get along really, really well. So it's not just the getting them in front of customers and getting in front of investors, but pressure testing and seeing through the model and really getting them ready. So when they go on that investor sprint, like a lot of investors will come back to us and say, we don't know what you do with your companies, but my God, they're so tight. Everything's well thought through. It makes sense.

So there's a lot more, the coaching and the mentoring. And by the way, all the mentoring at Dreamit, 95% of that is Dreamit team members. So Dreamit, we're still small. We're about 16 people, but we don't have this whole field of mentors and this big mentor network around the world because to us, I think, if I remember, your background's in psychology, right? Yeah. That's diffusion of responsibility.

Yeah. Who has responsibility for that startup? Who has to make sure they get over the line? We do. That's our job. We take it seriously. So we have full-time people at Dream It that are seasoned entrepreneurs, they're exited entrepreneurs, that are full-time staff members with deep domain expertise working with these startups.

So, again, it's not just the business development working with customers is critically important, working with investors, but it's that process of thinking it through and getting them ready for it. All right. When we get back from this quick break, I want you to go through the portfolio of graduates, tell me which ones objectively have hit the biggest highs in terms of revenue. valuation and raising money when we get back on this week in startups, our Power of Accelerator series, episode one. I want to take a moment and tell you about the importance of insurance for your startup.

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Accelerators, our special series, a 10-part series, this episode one with Steve Barsh, he's S. B-B-A-R-S-H. Dream Adventuresures, you can go visit them at dreamit.com, and they've been doing this since 2008, and you've been a managing partner there since 2015, correct, Steve? Yeah, about five years. So is there early on? I left to go do another startup, and then I came back. I was there in 2009 and then came back.

So tell me, what are the top companies to come out? of Dreamit so far. And what heights have they hit in terms of, you heard me earlier, traction, fundraising, valuation revenue, you know, the things that would be the real metrics people would qualify these companies against. Okay. So I think some interesting companies that come out of Dreamit, level up, came out of Dreamit in 2007. It was acquired last year by Grubhub.

There's a great company, House Party, which was Mirkat, came out of Dreamit. It was acquired by Epic Games. Siki came out of Dreamit back when I was running it in 2008, 2009. By the way, it's interesting. So Seekkeek went through Dreamit. It came in as I'm trying to remember, it was a blogging authoring platform when it first came in. We spent a lot of time beating them up in a really big way, focused on what are your one or two key assumptions? And how do you de-risk those assumptions?

And halfway through the program, they said, you know, we've tried to de-risk our most critical assumptions. And we've decided we're wrong. And we wanted your permission to shut it down and do something else. We're like, you don't need our permission. It's your company, not ours. So it was originally, Seekek was originally. like a Tumblr or a WordPress? No, no, no, no, it wasn't that sophisticated.

No, and I'm trying to, it was a network to find bloggers and share blogger work. And I'm trying to remember the name because I worked with them pretty closely on it. And within four to six weeks, they just shut it down. They're like, we can't, we're trying to prove or disprove our most critical assumptions, right? All the hypothesis testing, all the lean startup kind of thinking, it was pre the word lean startup. But, and they prove to themselves that they're one, their two core assumptions. They were wrong on both and shut it down.

and Seekek was the Phoenix rising from the ashes. It was a great store. And I remember they were in front of the rest of the cohort. This is back when we used to do things in person. And they turned to all the companies and said, we've come up with three names. This, this or Seekkeek. And everybody's like, Seekkeek, we like that. Okay, we'll go with that.

So Seekreak's a great company. They're still an independent company and growing. They're up in New York City. So up because I'm in Philly, doing really well. In our more recent companies, we have companies like Redox. So in the health tech space and digital health, Redox is the gold standard. for how you integrate with healthcare, electronic health records, EHR and EMRs around the world, so they're gold standard.

Companies like Cherry and our urban tech space just closed a really big round with Intel Capital. What does Cherry do? Cherry is in the analytics space. For an urban tech, it's real estate analytics. Got it. Data provider is what they do. Tissue analytics and health. So it's across health, urban tech and secure tech is where we've focused for the last few years.

But lots of companies, we've had about 350 companies go through. health is the oldest of the verticals. About 130 companies have gone through. So there's a lot of companies at different stages of their growth. So we're going for companies that have products in market. So you're not an incubator. You're not incubating idea. Somebody comes in says, I have a business plan.

I have a mock-up, a prototype I made over the weekend. You're not doing that stage of company, correct? We're not doing that stage. We started there, but it's like, you know, we're not interested in sitting there and explain to a founder, what's a cap table? How do you incorporate? It's just, it's not as value added and it's not as interesting for us. And we think there's more founders we can help once they get past that to really accelerate,

really build and grow the company once they've gotten just a little bit of like the smoke is coming out of the little teepee of wood. And then we want to really help push that forward. Isn't it also a bit of a tell if they can't even get a basic product and one customer to use it? I mean, in today's day and age, you could do that with sweat equity with two or three people. and whatever, maybe 10 weeks of work. So if you can't do that, don't you disqualify yourself from kind of even being in the startup game? Absolutely.

Absolutely. And, you know, we'll go a little bit early. If we see something that is exceptional, the founder is exceptional, what they're doing is exceptional. It's really unique. And we know our verticals so well. I'm probably like you. There's so many founders we talk to and they're pitching us. And we know so much more about the vertical than they do.

But if we see something exceptional, we'll go a little bit earlier. Maybe they don't have revenue. They just have a couple of unpaid trials. Like you said, they're not, I think you've talked about, they're not customers. They're free users. They're freeloaders. Maybe they have that, but you're starting to see the way that people are reacting to it. Once in a while, we'll go a little bit earlier if we see something that really catches our eye.

But yeah, we're looking for that little bit of early traction. And you said there were three verticals. Explain those verticals again and why? Sure. Yeah. The three verticals that we focus on, health tech. which is really focused on digital health medical devices and diagnostics. The original thesis, by the way, behind that, we started health tech about eight years ago.

It's when electronic medical records were coming online. And we thought, wow, if these EMRs and EHRs, you know, remember Jason when you used to go to the doctor when you were a little kid, there was no computer. You know, they pulled the paper chart off the wall. They had a lot of file cabinets. Yeah, a lot of file cabinets are gone, right? We said, well, if this all gets digitized and then Obama made it mandatory and there was funding for that. oh my God, the data that this is going to throw off will be enormous. That's why we started Dreamit Health and Dreamt Health Tech.

It was like, this is going to be huge. And luckily, we were right. So health tech is, again, digital health medical devices. It's really cool right now while we're recording this in 2020, a lot of those companies, we have over 15 companies that are getting sucked up so quickly because they have COVID-19 frontline solutions. So that's really cool. So that's health tech. SecureTech is three kind of areas.

We focus on cybersecurity. physical security and things like fraud. We love the space because they're really big problems, they're urgent problems, security and cybersecurity is such a big issue. It's a really big pain point. We have a managing director for health that's Adam Dakin. Mel heads up secure tech. So those, again, cybersecurity, physical security.

So it's not just the digital side, but there's all the, whether it's cameras or detecting, that type of things like fraud, counter fraud, any fraud, any money laundering. They're just big problems. They're interesting. They're very B2B and enterprise and we're good at that and we have domain expertise. The last one is urban tech, which focuses on construction tech, real estate tech, prop tech, huge trillion-dollar industry around the world. Lots of big things going on and we find it just a really interesting space. So again, there's like each vertical is a, excuse me, is a very big umbrella and then there's sub within those verticals and that's what we focus on.

What if you have a consumer company that looks really promising? and they're making a game or a subscription service for doing, you know, workouts like yoga or something, and you just fall in love with the founder and you love their progress. You don't invest and you just pass them on to other folks. I'd say call Jason at launch. I'm not kidding. Right? You're, you're very agnostic for all the right reasons, and I love your thesis. We focus on three things, and I think we do it exceptionally well, and I think we do it better than anyone in the world. I know you're going to have like 10 different accelerators on. I think, there's a handful of venture firms that do acceleration like this, like a pre-investment program

or acceleration, I think there's a small handful single digits around the world that know what they're doing. Yeah. We know what we're doing. And the areas we work in, we're exceptionally good. We don't, you know, it's a consumer app for game. Nope, we won't do it. We won't invest in it. It's just not really well. And it also, in order to pursue your, your tours, when you go on that road trip and you do a customer sprint, if you had 30 different verticals, you'd have to do 30 different sets of, of customers, it wouldn't be possible. Here, you have three different verticals, and the customers are all going to be in those three. So do you run the classes on a rolling basis, or is it one class and is it one theme per class? Or do you have a mixture of those three in each class and how many

people per class? Great question. So we think of them as cohorts. We run two cohorts, two timed cohorts per year, much like a YC, right? We do a spring and a summer, they call it winter. but we do a spring, excuse me, a spring and a fall cohort, two cohorts per year, all three verticals run at exactly the same time. It gives us scalability. And by the way, I think of Dreamit a lot of times like a startup, right? We're a business that helps other businesses. It's so funny.

By the way, I don't know, you know, you're an entrepreneur at the end of the day also, and like everybody at Dreamit is too. And people be like, well, you know, now you're not a startup or an, you're not an operator anymore. You're an investor. No, we're still an operator. I mean, if you're a VC, you are writing checks and it is different. But when you run an accelerator, you have a customer, the startup, and you really have to build a product that appeals to them.

Right. And the way I think of it, and I'm sure you do it with launch too, right? I don't know if you're going to interview yourself for that because I mean, what you guys are doing is really cool. I'll interview you. We'll flip around. But anyway, no, and we think about it just to digress for a minute. We think about it with dream it. We think about investors.

The number of times, how many of you times have you done this, Jason, as an entrepreneur, You'd meet with an investor and they say to you, well, Jason, what makes you unique? What's your moat? What's your defensibility? You know, what's your cost of customer acquisition? How, you know, what's your IP? And the number of times as an entrepreneur I'd want to meet with that investor and hold a mirror up to them and say, have a question. What the fuck is yours?

Yeah. What makes you so special? Yeah. And so at dream, we almost, we just think about that all the time. We obsess. What makes us unique? what makes us different, what makes us special, how can we get our startups to win?

So we think and build dream it along those lines, like any other type of company. Sorry for the digression. No, no. Let me go back. When we get back from this quick break, I want to know what you think is the most important part of what an accelerator can do for a startup.

The anointing of them, in other words, saying this is a valuable company worthy of your attention to the downstream investors, the money or the advice when we get back. on this week of startups. Now more than ever, we need people with the right skills to support our communities, especially the frontline workers who provide resources and care for those most in need. To help, LinkedIn is offering free job posts for healthcare and essential service organizations

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First up, Steve Barsh from Dream Adventures. When we left for the break, I wanted to know what you think is the most important thing that accelerators, as a category do for startups, if you had to rank these three, first ranked, the advice, the money, or the anointing. Stack rank those for me. Which one is the number one, which is number two, which is number three? So I think it depends. I think for dream it, it's hard to pick. It's like pick your favorite child, right? Yeah. I think for us, the advice is really important. Again, we have probably like you do at launch, we have so many startups that come in that are well on their way. They're a few years in.

And we just start tearing into them and pressure testing all over the pace. And once they come in, we take the gloves off, right? You made it through final round interviews. Welcome to dream it. And by the way, I look at it. And again, I think it's like what you do and other people do.

I think of dream it like a Harvard or Stanford. How many students have you met that graduated from the university that you're like, they're not that smart? They're all brilliant. By the way, they're brilliant. They wouldn't have gotten into Harvard or Stanford if they weren't brilliant.

Their jobs to make them better. At dream at our job is to attract the best of the best, pick the best, the best, and then make them better. So I think part of it, like those universities, there's a branding component to it, like, oh, they're a dream company. And in the verticals we operate, that really means something. If you're health tech, secure tech, urban tech, people say, oh, it's a dream of company. I know it's going to be good because so few of these companies get in. So that that curation is really important.

I think, though, again, I was getting to the advice side, the mentoring, the pressure testing, companies that come out change materially. Like when a dream it company talks with another dreamt company from a previous cohort, they're like, oh my God, you're going through dream it. I remember that. That's pretty intense. I think those are the top. So advice is your number one, the mentorship and advice. That where do you put the money and the anointing factor? I put the money probably last. And also we, again, like we talked about a little earlier, we don't write an upfront check. We got out of that business. Yeah. You know, we want an investment right and we don't want to do some bullshit valuation that's artificial. Like we'll give you 120. for 6% of your company. Our companies, every single company, 90% of dream of companies, that would be a down round if we did that, if we wrote that check. So it's not the money for us. It's going to be to help them get that round as they go through the investor sprint,

through that process, and we write a check afterwards. But, yeah, I'd say money is last. Yeah, money's last for me. I put the anointing first, but that might be unique to me. And then the advice second, not that we don't do a lot of advice and not that we don't try to hash through it. And maybe the founders would pick something opposite. You know, I'd be interested also in hearing what our founders say about this in terms of rating our programs.

How do you know, since, you know, the advice and you've now mentioned twice that you really hammer them and you try to be candid with them, most VCs today say there is no downsize, there is no upside to criticizing an entrepreneur when you meet them or giving them any kind of hard medicine or doing anything that is even remotely interpreted as criticism because you're, you might upset the founder and they might not want you to invest or you might get a reputation for being too candid, too blunt. I know I got that early in my angel investing career. So how do you know when to turn that on and not have it be obnoxious or unnecessary, but to have it actually be constructive? When they, you know, when thousands of startups, thousands and thousands of startups apply to dream it every single year, we don't turn that on in a big way until they're in, right? The beating doesn't begin until they're in. When we're doing final round interviews, we'll ask them tough questions. And we've talked about

this. There's a bunch of corporations that have talked to us. Like, how do you do what you do? How do you? You will go into corporate accelerators, by the way, and they're like, oh, come in and take a look at our startups and we'll spend, you know, an hour and talk to eight startups and say, what do you think? Well, who are the winners? And we're like, there's nothing here. You don't know how to triage startups. You just don't understand the questions you should be asking. So when companies go through a final round interview with Dreamit, we want them to walk away and say, you know, because you have a brand like you're talking about, you have a reputation. And it's that joke definition of diplomacy, right? What's the definition of diplomacy? You know,

being able to tell someone to go to hell and they enjoy the ride. We need somebody to go through a final round interview with Dreamit. And if they're not going to get in, they say, you know what, those questions were tough, but they were fair. But we won't give a lot of advice. We're just going to ask a lot of hard questions, which is what our job is. And we always do. Once they come in and they are a dreamt company, in the first week, they do something, we do something with them called deep dives, where we go back through with them, because dream it is not pre-programmed for every startup. It's customized because every startup comes in at a different stage, different funding, different market. We do a deep dive with them. It's like a diagnostic to

understand where are they strong or where are they weak and where do we want to focus on with them for the next 14 weeks. During that deep dive process, the gloves come off. The true thoughts come out. And I'd say 90% of the startups go, oh my God, this is, this is crazy. I love this. Can we do this some more? It's like, we're going to get along really, really well if you think that. So that's how it's it. I mean, the truth is, if you are really trying to win, any criticism you're going to look at as a gift, a way to get better. Right. What are the questions you like to ask during those interviews and why? Okay. Great question. So what are the questions we like to ask? The first thing we like to hear about,

is what problem you're solving, right? It's this kind of standard stuff, but I'll just tell you why. To me, Jason, I think about, again, a lot of what we do, it's triaging, high-speed triage. And I want to understand, we want to understand what problem you're solving. Is it a big and urgent problem? And what's your unique insight around that problem? The reason why is, just to use a medical analogy, if a patient gets wheeled into the ED, by the way, we've learned that in health tech, you can't call it an ER.

It's not an emergency room because it's not the cardiology. room and it's an emergency department. So if a patient gets wheeled in from an ambulance into the ED and I put their fingers on their pulse and there's nothing there and there's body is cold, I don't need to do a CT scan, an x-ray and pull lab work. We're done. If a startup comes into dream it and starts pitching us and we don't believe the problem, you know the fact, right? 50% over 50% of startups fail because they're not solving a big and urgent need. First thing, what big problem you're solving? We're going to put our fingers on the pulse and see if we agree with that, what evidence do you have that the problem exists? Then we want to start understanding

what taught us about your solution, what's unique about your solution, what's your unique insight. The solution doesn't just need to be a technical solution. We do a lot of series called the Dream at Dose, and we talk about this there. How can you be clever on more than one axis? Are you being clever in the product, in your go-to-market strategy, in the way you're acquiring customers, how do you think about all that? So we look at problem, we look at solution. We do look at total dressable market. We want to understand that and how they're thinking about it. Competition, competitive differentiation. We have a great dream of dose on that on competition. We always talk about no magic quadrants. Don't want to see your bullshit magic quadrant. We want to see a well-thought-out

competition. And when most startups are pitching us, they're going to not do well on these, but we can ask enough questions to figure out if we like it or not. And then understand the team, that type of thing. So kind of the usual things. What's your go-to-market strategy? It's another, if I want to pull the rug out from under a startup, I could say, tell me about your pricing, where to come from, and telling me about your go-to-market strategy. Usually they'll fall down. down on that. We can fix that at Dream It. We can really help them fine-tune that. But problem, solution, how big is the market? What traction do you have? What evidence do you have that people care about this greatly? Which one of those questions at the stage you're investing do people

struggle the most with? On competition and go-to-market strategy. They just don't even understand. What's your go-to-market strategy? Direct sales. That's not a go-to-market strategy. That's a sales strategy. I find they struggle with that a lot. So explain that to me. What does go-to-market mean for Dreamit and for you? Sure. And there's another Dreamit dose on this, go-to-market strategy. So the way I think about it is, particularly for early on, and we just had Jeffrey Moore on, from crossing the chasm. And I remember, that's where I learned this from originally, right? You know, he's talking about what's the definition of market. We want to understand who is your first target customer. And most of our companies are B-to-B kind of enterprise-y type companies.

what's the targeting criteria and why? What type of customers are you looking for? Like, I love to go fishing. So we make lots of fishing analogies. You're going fishing for what type of fish. And I'm not worried if you're going for flounder or tuna or bluefish. I'm worried about the criteria. Like, what are your best criteria?

What are your best target customers you want to go after? And why? So for that go-to-market strategy, we really want to understand what market are you going after, what type of customers, why? And then how does that evolve over time as you grow, your solution, grows and your brand grows. And I find 95% of startups, you just pull the rug out from under them. They're just all over the place and round them. Give me a great example of a company that really define that and dialed that in, if you can. Let me think of a company that define that

and dialed that in. I don't know. Most of us, I can't think of one off the top of my head. Most of them, we make pretty big adjustments. I'll give you an example, by the way. We do a lot of health tech companies. And they're all chasing what are called AMCs, academic medical centers. And we'll say, why are you chasing an academic medical center? Everybody's chasing them. It's like I live on the east coast, the United States, right? So if you want to go fishing, you go over to New Jersey. It's like tuna fishing. You're trying to catch something. It's 80 to 100 miles offshore. It's nearly impossible to catch. If you catch one, you're eating and you're doing well, if you don't, your boat runs out of gas and you're going to die of starvation.

And we see a lot of startups. So we try to adjust them to think about how do you start getting fish in the boat? Like, let's start making money here. Let's start getting traction. Let's start getting out there. So a lot of them we adjust their thinking around that. Or go to market strategy. How do you mess with pricing? How do you do almost like a price guarantee where you as the startup, if you believe so strongly in your product, how about you take risk and say to the company B2B, look, if it doesn't work,

you don't know us anything. So we also play around with their business model in that sense. Yeah, I think understanding your ideal customer profile, who you're going to go after first, that tip of the spear, the wedge strategy. Yep. people haven't even given that much thought, huh? Nope. Very poor thought. It's just kind of random. And look, they're young companies and they're being opportunistic and I understand that. It's a little bit like, I don't know if you know lawyers when they graduate from college,

there's a joke. What kind of law do you practice? Door law. What's that? Whatever walks in the door that day, that's the law I'm practicing. So they're a little bit like door startups. Like, look, these are customers. They happen to be local. But then once you get going, it's like focus. Because you know, right, so many startups die because they're not focused. They're all over the place. They're scattered, focus. And for that ideal customer profile, like you talked about, who is going to suck up this solution? Where do you fit insanely well with what they're doing? So you're not spending 18 months pounding down a door, but the door's open for you because you're well aligned from a value proposition. Yeah, I mean, if you put it on an X, Y, axis, there's how easy it is to sell

the person and then there's how much value they get from it. Or you could do how easy it is it to sell them and how much money do they spend? And, you know, if you've got a product where people are just lining up to use it like Slack or something, you don't really need to go top down and try to get, you know, IBM to buy 50,000 seats when you're starting. You just get startups to buy five to 50 seats. Absolutely. It's like Brex, right? How did Brex launch? Brex and comes out of YSE and goes back to YC and they do a lot of stuff with us, right? We're going to go back after startups. Our value proposition fits ridiculously well with a startup. That's what we're going to focus. explain what Brex is.

Oh, Brex is the really cool credit card that if you're a startup and you don't have it, you don't want to sign a personal guarantee and get a credit card that gives you $5,000 worth of monthly spending or credit line. Brex is more focused that if your venture back, they'll look at how much money you have from your venture round and they'll give you that basically that amount of credit. Plus they have financial products. We have the CFO on Dream It Live, actually, a month or two ago. Great story from what you are your investors in them?

No, no, no, no, no. We're not investors in Brex. Just use the product. Know them really well. And they're part of when you come into Dreamit, you get a Brex, you know, preferred rates with Brex. Yeah. And they sponsored this pod, in fact. Oh, cool.

Yeah. When we get back from this quick break, I want to know how much of the program is focused on the customers and the advice and the stuff we've talked about and how much of it is based on fundraising and what your best practices are for your companies to close rounds when we get back on this week and startup. I got so much going on here. Obviously, the podcast is doing. great. The launch accelerator is amazing. We've got over 100 graduates now in my fund,

a ton of events. We just did Angel University for 250 people, founder university. We've done 15 or 20 times. So many projects. And my team members are so in the weeds getting so much done. How do we surface and control and organize all this information, all the different projects we're doing? Well, we use something called Notion, N-O-T-I-O-N, Notion. And it is amazing. It's one tool that does many jobs. You can organize your notes, kind of like a wiki or your docs, kind of like a word processor, as well as projects and workflows in one spot. And it lets you use all kinds of different free-flowing objects. So you can have a list, you can have a table, you can have comments, you can have bullet lists. So what we did was we started a book club in the This Week in Startup Slack.

You can join that, This Weekend Startups.com slash Slack. And somebody who was in the Slack said, here's my notes on the first book we're doing. We're doing Robert Iager's book, The Ride of a Lifetime. So we did the first book club. And like 60, 70, 80 people showed up on the Zoom in Slack. And those are great for talking and chatting. But they both suck for taking notes. One of the members of the community made an outline of the book.

And then two of my team members, Laura and Tracy and Presh, three of my team members, were contributing all of their thoughts on the book and taking what people were talking about and making an outline of notes of everything we learned from the book. And we did that beautifully. and you can see it here on the screen in Notion. So we had this incredible flourishing conversation that would have went into the ether, the ether, but it got captured on Notion for all time.

Then we took that experience that 60, 70 of us were having, and we shared it with 10,000 people. I'm not kidding. And now all those people are going to read Robert Arger's book, and we've got to get him on the podcast, by the way. All of this was done with Notion, and it works so well for startups. It is a complete no-brainer.

It's your wiki, it's your managing, projects, creating documents, and taking notes all in the same place. So here is your call to action. Get started with Notion. And they're going to give you 50% off their team plan for your first year by going to Notion.com slash twist. Please, I know you don't need to save money in a lot of cases, but use that URL so that they know you came from the pod. Notion, N-O-T-I-O-N-O-N-com slash twist. I am addicted to this product. It is like one of the great products of all time. And I know.

know this is an ad read, I know they're partners for the program. We were using this long before they decided to sponsor the podcast. It's kind of got that magical feeling like Uber or Wikipedia or Slack or Zoom had when you first use it. You get that tingle. We get that Notion tingle. Notion.com slash twist. 50% off their team plan for your first year. It's a great offer. It's a great product. It's a world-changing product.

I can say that. It's a game-changing product. All right, let's get back to this amazing episode. Okay, welcome back to this week in Startups. We've got another 10-part special for you. It's called The Power of Accelerators, and this is our first episode in this series with me is Steve Bar. She's a managing director at DreamAdventures. You can visit them at Dreamit.com. They've got over 350 companies that have gone through their accelerator. They get a little

bit of advisership fees and then the option to put $500,000 in your round. They focus on three verticals, security and healthcare and urban. And urban is an approach. pretty wide one, but I think you guys understand what it is. You pick the nice, easy ones. Healthcare and construction. Wow. Right. Exactly. Simple little industries. Yeah. Didn't want to go into the music business, huh? No. Journalism, interesting to you? Media. When we went to the commercial break, I wanted to know, I get what you're doing in terms of customers and helping them with how to think about their market and their go-to-market strategy. Let's talk about the fundraising process. Obviously, we're taping this during the coronavirus, but let's

put that aside, and let's talk about in a normal market, maybe not as hot as we were in, maybe not as dry as we're in right now, but in a normal market. What are the best practices and how much of what you do is about the fundraising process? Or do you do such a good job on helping them build a great customer base in clients that is just a formality of you just introducing people? It's a great question. I think it's a third, third and a third. You know, the customer, customer sprints, getting them in front of lots of customers face to face is, very important getting them ready for that so they're fine-tuned. The coaching, the mentoring is very intense and it's a game changer for them and we really change the way they think about

their business and they talk about their business. And then the investor sprints and getting them ready for that process. I think it's a third, third and third all the way across. What gets them, and then was your question, you know, what gets them ready for the investor sprint? What's that process like? Yeah, I'm curious what the process is like. Do all 10 companies come in and do two minutes each? Do they do 30 minute interviews, with them and you set up individual meetings? What's the actual tactical process of those fundraising tours? Sure. So let me get, let me walk you through that. So when companies come back from customer sprints and go home, right? We start getting them ready for the investor sprint.

We know basically what we want to make sure they have in their investor deck, where they're going to get asked questions. We want to make sure it's really extremely well thought through because, reminder, you know, these are all pre-series A companies, but they've got revenue. So the question, you know, they're going to get down to the, the weeds of, well, what does your sales pipeline look like? How do you think about the pipeline? How are you growing the pipeline? But everything that's going to be in a deck that needs to be in there, we want to make sure that story is solid. There's no record scratches in it. It all holds together from that front slide to the back slide. And by the way, crescendos with a really great vision,

right? We see so many startups that make the mistake of, I'm raising two million dollars to get to a three and a half million dollar run rate. Okay. Then what? Right. So people like yourselves, other great investors, they don't want to be sitting hitting singles. Like, how are we going to build this into something really big? So it's one of the areas we focus on, by the way, that we see a lot of founders like, but what's the vision? How's the world changed three to five years from now because you're in it? So we spend time on that. So then getting them ready for the investor sprint, one of the, we start reaching out to all the investors we know, which is a couple thousand on both coast of the United States. We email them and say, these are the one pagers, these are the

companies that are getting ready to come. Who do you want to meet with? You pick who's interesting to you. So that curation saves a lot of time for everybody. Typical dream it startup will have 15 to 18 one-on-one meetings on the east coast and the west coast. So all of that's getting curated. The investors pick who they want to meet with. Startups are going into their offices. They get usually 30-minute meetings. We always tell startups, look, your job in that 30-minute meeting, there's one thing you want to do is stay away from no. You're not trying to close the deal. You're trying to wet their appetite and say, this is interesting. I want to find out more. Those startups are very tuned to the point right before they go on and

investor sprints, we do something called mock VC interviews, and we have friends of ours that are VCs, we do it, and we start beating the crap out of them. And it's like a real VC meeting. We actually say, turn off your deck. I want to talk to you. You know, I don't give a shit about your deck. I invest in people, not decks. Why are you doing this? And we'll distract them and do all kinds of all the nasty tactics so we can think that as entrepreneurs we've been through and really get them ready for that experience. Then the process is curated. They go out for two weeks. High watermark for a dream it company, they'll have 30 to 35 VC meetings, individual meetings in a two-week period, average 15 to 18. That's what the process looks like. Our definition success, our KPI of what we're

looking for at that stage of going through dream it is what percentage of companies raise around within six months of getting out of dream it. And roughly that rovers around 50 percent, about half raised within six months of getting out of dream it. And then we're looking to write a check as part of it. And I'm sure out of the ones that raise or don't raise some number of them, maybe don't want to raise at that point in time. They want to go back to work and raise that a higher evaluation where they haven't dialed it in to the point at which, you know, VCs are going to be truly interested, correct?

Sure, absolutely. And as a matter of fact, it's interesting you brought that up. Let me unpack that a little bit. Yeah. About a year and a half ago, two years ago, we actually unbundled Dreamit. We'd have companies that are like, I want to come into Dreamit.

We actually have a lot of companies that come from seed stage firms. They write a check for a million dollars and say, go to Dreamits. They can go do all that heavy lifting. Let them get for you in front of customers. and then we get all the metrics and investment rights that work for us, and it makes sense. So they'll come in. They just close their seed round a month before they got into Dream It.

They don't need to go on an investor sprint 14 weeks from now. It's a waste of time. So they can actually unbundle that and do the investor sprint in the next cycle, or they can come in and just do half of customer sprints and say, I don't really need customers. I'm fine on revenue. I need more help on investors. So they can actually unbundle Dream it.

We don't want them like, get on the bus. It's leaving. They can modify Dreamit so it works best for them. and our platform and platform team is actually set up for that. When a founder is considering going to an accelerator, what's the best way for them to judge how good that accelerator is? It's a great question. Talk to founders that have been through it.

It's just like, you know, if I want to find out what's, you know, what's Jason like as an investor? You need to talk to previous companies. Talk to previous companies that have been successful. Talk to previous companies maybe that haven't been successful. I've done that for VCs that have invested in startups that I've run. it's the best way. And when you're like a dream it and some other great accelerators, there's a lot of companies that have gone before you. It's, you know, it's like if I'm touring

a university and my son's going to college or our daughter's going to college, you want to find out what the school's really like, talk to some students there that have been through that process. So that's, I think, the best way is to find out, talk to people that have actually been through it. What are the top three things that somebody can tell you in an interview for your accelerator that make you a heck yes. I'm working on a really big, urgent problem, and here's the evidence I have. Here's all the customers I've either been selling to,

talking to, but you have evidence. You know, it's like the line, don't bullshit a bullshitter. Don't sit there and come in with fake crap. So, you know, it's a really big urgent problem. And I think like Bradfeld talks about, that's where I learned it from years ago. It was the first time I heard it.

I don't know about you. You know, it's a little bit like in that problem area. Are you selling vitamins, aspirin or antibiotics? It's an antibiotic, right? It's a really big urgent problem. The thing, I don't know if you've ever heard this, Jason, we use sometimes. It's like, you know, when you go to the dentist and they tap on your tooth, Jason, is it this tooth? No.

Is it this? No, this. Oh, oh, that's the one, right? We're looking for companies that solve a really big pain point and it's clear. We're looking for a company that has a solution that's based on a really interesting, unique insight. And then finally, the other thing is we want to understand that you understand the competitive landscape, what makes you unique, what makes you different. We want to make sure you have a really good understanding. If those three things, those are probably the top three things that we're looking for.

Should a company go to multiple accelerators and under what circumstances should they? You know, I think so. You don't want to do it too many times. And the way I look at it, by the way, if you think about an accelerator from Dreamit, and again, we think of ourselves more as a venture capital firm these days with a pre-investment program, it's a little bit like I go to undergraduate school and then I go to grad school. And Dream it's like a grad school for startups. We have a lot of companies.

I'd say, I don't know, 20, 30% have been through an accelerator before Dreamit. That's fine. You want to be careful. You don't want to, if you're signing all these notes again and again and again, are you making any real progress. And there's a lot of like accelerators that are just not very good and they don't add a lot of value, but they take something from the startup. So I think it's okay.

We see a number of startups that have gone through Dreamit. They're like, this is easy. For the minor amount of advisor equity and we get an invest, give an investment right, this is like a biz dev function for us. It's like, holy shit, you guys are going to get us in front of 20 potential customers over a 14-week process. It saves us six to 12 months. So I think in that case, if you have a group like ours, a team like ours that can put you in front of decision makers and important customers and a lot of them, it's a great thing to do. And I think it's okay to do more than one.

And who shouldn't go to an accelerator? Who shouldn't go to dream? And obviously, outside of people who are not in the verticals. But when is it not a fit to even go to an accelerator or to yours specifically? So let me, it's a great question. Let me ask you a question, Jason. Jason, do you have any side hustles which really aren't a scalable business, but you just kind of do something? It's monetary.

You're making some money. Sure, my podcast thing. Okay. Okay. Hold on the podcasting team all of a sudden. Wait a second. Nick's like job security, right? It's a side hustle that is done well.

It's a side hustle. You know, I have a couple of sides. Hustles, they don't deserve to go through dream it. Look, if you want to have a pizza shop, if you want to have an auto body mechanic, if you want to do something that it's going to, you know, look, if I make a half a million to a million dollars a year and there's seven people working here and I'm happy, I'm fine. I don't need all the aggravation. I don't need investors. Don't go to dream it. Like dream it and brethren like dream it companies and teams that do what we do, they're for companies that really want to scale. So if you want to scale something, go into a dream it.

You know, if you don't, you know, why go get a PhD? If you, that type of thing, right? So it's for companies that want to scale. And I have a couple side little things that I do on the side. They're not scalable. It doesn't make sense. There's no need to. And when you put in the 500,000 in that case, what is your follow-on philosophy?

A lot of, you said you're like a venture firm. A lot of venture firms are really into following on and doubling down on the breakout winners. do you follow on after that 500K check? Absolutely. There's a reserve right again for that same amount. Oh, oh,

absolutely we want to follow on. So that's the intent. And we have ratios of what our expectation for follow on, but there's a reserve that we put in place for that, for those companies based on certain ratios that we do want to follow on. Absolutely.

And then we can... One out of four or five you're going to follow on with something in that range? I don't know the ratio. So another managing partner dream, it runs more on the fun side. Got it. I'm on the whole kind of front end.

I don't remember the ratio off the top of my head, But it's a lot. It's designed for a lot that we do that follow on. Yeah, it's the way we think about it. And how do you think about companies that are struggling and need a bridge and saying no to those companies? Because you're not really designed to be bridge funding, I assume. Sure.

No, we're not designed to be bridge funding. We will participate in a bridge. But it's something, you know, I was an EIR a long time ago with Josh Kauffelman at first round company, at first round capital and just learned so much. And I remember the expression there, right? It's a bridge to. where? Like, where is it? Is it a bridge or is it a dock and I'm going to just walk out and I walk off and I'm in the water? So it's really understanding where is it getting to you? Why do you need a

bridge? What are the fundable milestones? What magically is going to happen when you get to the other side of that bridge? So we'll participate in a bridge if it makes sense. If the business isn't working and it's a bridge to nowhere, it's not as interesting. At the end of the day, look, when we have companies coming to dream and we talk to our managing directors that run the different verticals all the time. So you realize you're getting married to these companies and I, the number of times, and I'm sure like you, especially when the times are tough, we're talking to our startups all the time. Text messages from founders at 11 o'clock at night, one in the morning, you know, my CTO just quit and we're getting on the phone. We're there to help. We're all entrepreneurs. We want to get in it to win with them and we enjoy that.

We're not just, you know, I've met some VCs, you know, they have an MBA from Harvard and they never ran a company. We love to build companies. It's our passion. We want to drive them to success. So we're We will participate in bridges when it makes sense. And we're always there to advise and guide and really brainstorm and soundboard through difficult issues and challenges. When you look at downstream investors, one of the top two or three firms that you want your founders to get meetings with and to hopefully close an investment from? Sure.

So they get the biggest impact downstream from you. I think they get in front of some of the, on the most prominent investors. you can think of, but again, we're in these verticals. So, you know, if it's urban tech, it's fifth wall ventures. If it's health tech, it might be health X, which is, you'd think who's health X, but they're a great firm in Madison, Wisconsin. Terrific. As a matter of fact, we have a lot of health X companies that come into dream it. They write a check and they come into dream it. And sometimes it's the other way around. So it really varies by vertical. Sometimes it's the big brand name investors, you know, whether they're going to see

with an meet with an Andrewson Horowitz or Sequoia. They're going to meet with them. But a lot of ours are very, you know, they're specialized verticals. And Health tech isn't for everyone. So maybe it's a four or six ventures out of Boston or that type of firm. So there's the concept being there's a, if you're specializing these verticals, you know specific downstream investors who are also in those verticals. And you've sent them three, four, or five companies in the last year already. So they know the quality that you're bringing.

And it gets back to my point about the role accelerators play in anointing and picking wins. And by the way, and they're sending us companies. It goes both ways. It's before they've written a check and sent it, or they're like, you know, they're not ready for their series A, but you should go back into Dream It and come back after you've been through that process. After you, as I wrap up here, after you go through those, like, say, 20 customer meetings, what's the chances you actually land one of those in the next year or two or three of them even? Does that happen?

It's a great question. Yeah, it absolutely does. It actually happens in the meeting sometimes, not all the time. We've actually, and it's a little bit like when you go fishing, you go fishing for one type of me. We've had once or twice in the last year where people are on customer sprints, And they turn out to be investors. They're like, wait, wait, we weren't looking for money. So it varies.

Look, the number one thing, we talk to Dream at startups all the time. When you go on customer sprints, don't sell. Talk about how you want to partner because they don't want to be sold to. If they feel like a piece of meat when they're in there, they're not doing it for that reason. So a lot of times they're looking for proofs of concepts and trials and to move forward. That's the ask. They have a very clear ask. Like, can we do a POC?

Can we do a trial? How do we get this to next stage? I'd say most companies come out of Dream It with maybe one P.O. C-ish, but when we hear time and time again is we're accelerating the process. You got us in front of 20 decision makers over the last 14 weeks and you've accelerated our pipeline by 6 to 12 months. And oh, by the way, the C-Sov of American Express, B.N.Y. Mellon and J.P. Morgan, that's one day of Dreamt when we're in New York City. They'll meet with those three Chief Information Security officers in one day. It's like I couldn't have gotten a meeting with any of them in the next four months, they won't even return my calls. So it's, it accelerates that overall business development process. So there's something about an investor saying, hey, I want you to meet with our latest investments that is easier than a random company because there's so many random companies coming in the front door. It's your anointing, right? They're anointed dream it in these verticals. And those customer sprint partners that don't pass anything, by the way,

there's no money changing hands between us and our customer sprint partners. It's a, it's a, I don't know if I can use the term anymore. It's a quid pro quo, right? We get our companies in front of great people and then our companies get a chance to grow. So we don't charge for that because it's like bullshit to us. It's so valuable for our companies. Tell me which other accelerators do you take notes from and think highly of as we wrap up here? I think highly of YC, I think somebody highly of tech stars. Those are the ones, you know, sometimes startup health a little bit in the health side. Those are the two that I think about. I'd like to see what they're doing and I think they do and I think particularly YC does really interesting, great work. I think it's interesting.

some of their later stage companies they work with. And I like what they're doing in biotech and health. And we overlap in a lot of areas. So I think those are the two. The others, like I said to you, I find, you know, you see most accelerators around the world. And I'm sure you have to visit. And launch, by the way, will be in the area.

What you guys do is absolutely awesome. Yeah, no, no. What you do is really really awesome. But it wasn't. But I know you weren't. But like, you know what the hell you're doing, right? You see somebody as accelerators. And the person who's running it has their MBA.

is a year out of school and they're advising startups on how to build and grind it out. What the hell do they know? Nothing. Yeah, I know. That is. There's very few. I think most of it's just, it's tourism, like you call it tourism, right? It's entrepreneurial tourism. And having a bunch of startups in a cool space and it looks all start-appy and you do fun things and you serve some alcohol and some dinners and have some great speakers, you're not adding any value. You're just kind of sliding around over the place.

So I think that's what most are. If you look at the person running it, you just ask yourself, what have they? achieved, what have they done in their lives. It's a pretty good tell if they should be taking their advice just generally, let alone. Do you come up against Y Combinator as a competitor often? And then how do you try to win that competition? Sometimes we do. Sometimes, you know, we have in our current cohort, I think we have two YC companies that are now going through Dreamit because they're very focused and they're like, this is awesome. You guys have so much expertise. Sometimes, usually it's not head to head. And a lot of times it's also what the value is.

We look at a startup and say, look, if you're willing to give away, in a sense, giveaway, 6% of your company for 120,000, 150, I forget the current offer, and that valuation is okay. I think it's 7 for 150. 7% for 150. You do that implied valuation and you're willing to give away. I mean, wait, didn't you just raise a, didn't you raise previously a million dollars at an 8 million cap? You're going to do that? Okay.

We try to make an offer structure or dream it that's not a question. It's an IQ test. It's really easy. It's at fair market value. It's fair to entrepreneurs. It's really balanced for them. So, you know, once in a while we'll come up against them. But usually it's not head-to-head.

The timing isn't exactly the same. And we can take companies after they've gone through a YC and they can go through dream. And again, if it's in one of our verticals that we focus on, they focus on everything. All right. Continued success. Thanks for coming on the pod. And we will see you all next time on.

Thanks for having this week in startups. Bye-bye, everybody.