Discussing All Things VC On The Recode Decode Podcast

A few weeks ago, I sat in “the red chair” of Recode Media’s Decode Podcast recording studio in San Francisco. Most tech podcasts I’ve been on are usually recorded in some back room or startup side room, but not this episode… no, no. Recode’s senior finance reporter, Teddy Schleifer, was kind enough to host me on the famous “Recode Decode” podcast and the episode aired today. You can listen to our discussion above via SoundCloud, or by clicking here (for my favorite mobile app for podcasts).

Ted guided us through a fantastic discussion that touches on many facets of what I’ve observed in the world of venture capital — how to break in, how to land a role, how firms think about hiring, what processes firms use to make an investment decisions, how the public has come to think of venture capital, what the limits of VCs are, why Continue reading "Discussing All Things VC On The Recode Decode Podcast"

The Story Behind My Investment In Downstream

Earlier this summer, my friend Michael told me about a small investment his team made up in Seattle in the Amazon ecosystem. We were about to move houses and with all the impending details that process was generating, I initially didn’t give it a proper look. As we were reviewing new deals, we flagged this one for being different in nature. And as we dug in more, we began to uncover how little we know about a new potential business line for Amazon.

Today, Downstream officially launched, though it is already in the market and helping Fortune 1000 companies get smarter about their spend on Amazon. You can read about their news today here in Geekwire, and I’m happy to be co-investing alongside friends like Michael, Micah, Dave, Chris, and others in Downstream’s seed round.

For me, there were two revelations in researching this deal – 1) Continue reading "The Story Behind My Investment In Downstream"

“There’s A Disturbance In The Force”

I say “no” every day, multiple times a day. Even though I know I’m upsetting folks, I try to be direct, open, quick, and honest. Not everyone will like it. So be it. I elect to be consistent and fair rather than liked. Yet, once in a while, when I say “no,” I carry it around with me. And sometimes, as you carry that “no” you delivered around, it starts to get heavier, and you recall it more frequently.

I had that experience last year. I called the founder to say “no” and the founder was incredibly graceful. A few days later, I ran into a mentor-investor who had also spent time with this founder and didn’t get all the way there. I told him, “I say ‘no’ often, but this one – I felt terrible.”

My mentor responded: “Ah, yes… you felt a disturbance in The Force. Continue reading "“There’s A Disturbance In The Force”"

Investing Outside The Bay Area

This is a post I’ve wanted to write for a long time, but I needed the time to digest all the other great posts on the topics by other investors, and to analyze specific portfolio data from Haystack over the last five years. Well, that time has finally come. As a warning, this post will have more subheading than usual, and it will be packed with lots of links — please click through and read them. I believe this is an important post for both founders and investors in the Bay Area and outside the Bay Area to read carefully.

When I began investing a little over five years ago, it felt like the conventional wisdom was that one had to invest in the Bay Area to harvest venture-like returns. Of course, that was not 100% true, with innovative startups and large outcomes occurring in Europe, in Asia, and other Continue reading "Investing Outside The Bay Area"

The First Live Meeting With A Founder

Recently on this blog, I’ve been attempting to unpack how an investor can sort through deal flow and potential investment opportunities. After writing about “the quick kill” to discard of inbound flow, next I wrote about what actually captures my attention and graduates to a meeting.

So, now, what happens in the actual meeting?

This is hard to explain, actually, because I can have a range of reactions to a meeting. I understand entrepreneurs would like to know the outcome of a decision at a meeting or soon thereafter — and sometimes that can happen — but sometimes it takes a while for things to take shape.

Immediate “Yes” – It is not common, but it is possible that I leave the meeting with all the information I need and, with some quick reflection, signal the founder that I’d like to invest. This can be as short as Continue reading "The First Live Meeting With A Founder"

Paying Attention To Inbound Deal Flow

About a month ago, I wrote a post about how the Bay Area seed ecosystem is generating deal flow levels that are nearly impossible to keep up with. In the post, titled “Seed Deal Flow Tsunami And The Quick Kill,” I attempted to explain how, in the face of the deal flow firehose, I get to a quick “no” which I hope is helpful for both sides.

Now, I want to write about a slightly touchier topic: What actually gets my attention?

To set the context, all new inbound deal flow comes to me via text message (20%) or email (80%). In no particular order, here are the ingredients that push me toward the feeling “Yes, I’d like to meet!” Note, these are in no particular order, and the more ingredients that are presented to me upfront, the faster I want to meet:

-A strong, brief, but Continue reading "Paying Attention To Inbound Deal Flow"

The Harsh Reality Of The Preference Stack

I recently shared this article and tweeted this, and I was quite surprised by the thread it triggered and the reaction it generated. After reflecting on it for a day, I began to understand why — even though this topic has been written about many times, “technology” as a sector and industry now has gone from vertical to horizontal, entirely pervasive across industries, across sectors, across geographies and cultures. And with this, every year, a new cohort enters into the “tech startup” world, and there’s no official canon to read, no “one-stop shopping” site or user manual to get briefed on the things you absolutely need to know.

So, that’s why I’m writing this short post specifically for 1) employees of early-stage startups and 2) the earliest investors in these startups, who are often themselves new to the entire sector. And as a disclaimer, 1) I am figuring this Continue reading "The Harsh Reality Of The Preference Stack"

Quickly Unpacking Amazon’s Acquisition Of PillPack

By now, one wonders what tech news will be tucked into the public record the days before a major holiday travel week approaches. While I have no horse in this particular race, I was really excited to read that Boston’s PillPack was being sold to Amazon:

Let’s quickly unpack the highlights from this deal:

1/ No Schlep Blindness Here – Pillpack succeeded for a variety of reasons, one of them being that the team actually thought about the underlying processes in the industry and rebuilt them with better flows, software, and operations. This success reminds me of a famous Paul Graham post, Schlep Blindness, where Graham argues while incredible startup ideas lie around us, this specific work can feel to many to be both tedious and boring. “Reinventing the direct mail pharmacy business” doesn’t have the sexiest appeal, sure, but it’s clear reading all the reports the team thought Continue reading "Quickly Unpacking Amazon’s Acquisition Of PillPack"

Quickly Unpacking ATT’s Acquisition Of AppNexus

What does a massive telco do to follow up an $85B acquisition of Time Warner? Spend about $1.6-$2.0B on AppNexus, of course. In an age where $7.5B exits like that of GitHub to Microsoft make the big waves, acquisitions like that of AT&T buying AppNexus can feel, relatively speaking, small — but that would be a mistake to perceive it that way.

Founded about a decade ago, NYC-based AppNexus went on to raise well over $300M in private capital. Some of the most recent investments in the company were likely done at a price which is not that far off the final price tag. We don’t know if the most recent investors placed any preferential stacking, but this particular exit is revealing for a number of random reasons:

1/ Mobile Disruption All The Way To The Application Layer – Back in 2010, then TechCrunch contributor Steve Cheney Continue reading "Quickly Unpacking ATT’s Acquisition Of AppNexus"

When The Profile Gets Ahead Of The Proof

I heard this line this past week, and it’s been like a catchy lyric playing over and over again inside my head: “Their profile is ahead of their proof.”

Written another way, when Profile > Proof.

It could apply to a company, a startup, a venture fund, and of course, an individual. And it reminded me the profile of any of these entities can be built up, pumped up, and broadcast widely for not much money or effort. The age of social media is in full-swing, as we all know too well — entirely digital brands are going direct to consumers, disrupting traditional brick and mortar stores; traditional media outlets such as newspapers and cable television are being replaced by celebrity- and influencer-driven “channels”; and “startup culture” is now defacto corporate culture, with early-stage, well-funded startups executives on the coasts commanding compensation packages at many multiples of what Continue reading "When The Profile Gets Ahead Of The Proof"

The Three Drivers of Contentment & Motivation at Work

What motivates us to perform and drives contentment at work? Most entrepreneurs struggle with this question. You want success, want to have drive and yet rely too heavily on fear-based or external motivators which often leave a negative residue. The research shows that the most effective motivators are intrinsic and positive.

A champion needs a motivation above and beyond winning.
~ Pat Riley, six-time NBA championship coach (Lakers/Heat)

This post comes from the first part of a lunch & learn session I recently did at one of my former portfolio companies, Graphiq.

What truly motivates us? Three words: Mastery, Autonomy & Purpose. Daniel Pink, in his book Drive, reviewed the sea of research around motivation at work. While factors like money, prestige, punishment or fear can drive us, these pale in comparison to MAP. This video does a great job expanding on this work (worth the 10 min

Continue reading "The Three Drivers of Contentment & Motivation at Work"

Bourdain On Writing

I’ve been listening to lots of old Bourdain interviews and episodes. This re-run of a 2016 Fresh Air interview caught my ear, specifically the excerpt below.

DAVIES: Now, the book and the article is this, like, grab-your-attention look at things you don’t know about what goes on inside the restaurant and all kinds of things. But, I mean, it’s – the writing is powerful. Had you been writing while you were cooking? Creative workshops, creative writing classes?

BOURDAIN: I had done a writer’s workshop with Gordon Lish, the notorious creative writing teacher, at one point many years earlier. But I’d never actually written. I was – I never had the time to sit there in my garret, you know, writing unpublished novels. I just didn’t have the time, and I think to a great extent, the reason “Kitchen Confidential” sounds like it does is I just did not Continue reading "Bourdain On Writing"

Response To A Thought-Provoking Tweetstorm

A stranger (hopefully a future friend, Pietro Invernizzi) on Twitter tagged me as part of his tweetstorm earlier today about his hope for how VCs and founders should interact around and during a pitch. It was a longer tweetstorm, and I felt it would be more effective for me to respond in longer-form, so I’m reproducing it here with my commentary:

0/ Thread: 10 things early stage VC investors could do better 🐺… based on recent articles and tweets by @willmcq @briannekimmel @HarryStebbings @fredwilson @eamonncarey @2lr @micahjay1 @StartupLJackson @chrija @semil

Ok, I’m ready…

1/ If you say too early, mean it. Telling founders it’s ‘too early’ is an easy rejection: it can always apply | it’s not about the team | it can’t be used to prove you wrong later. Still, if you brand yourself as early stage VC, why not give real reasons?

There’s nuance here. It depends Continue reading "Response To A Thought-Provoking Tweetstorm"

Thank You, Anthony Bourdain

I woke up a few minutes before 5am PST on Friday. I always look at my phone right away. I know it’s “not good for me,” but whatever. And, within seconds, I saw the news about Anthony Bourdain. I wasn’t surprised. Maybe I’m desensitized to the news, or the distance between real life and the characters we all play online. From his seminal book throughout his groundbreaking video work, he dropped little hint bombs of pain from many unhealed wounds of his past. This would come out as guilt, or nostalgia, or even disgust. In a way, his constitution reminded me a bit of Holden Caufield — he was trying to push us to see us the rest of the country & the world, but we kept sitting on our couch watching.

What has surprised me, however, is the continuous, organic, poetic, global, and piercing outpouring of love, sadness, grief, joy, and Continue reading "Thank You, Anthony Bourdain"

Quickly Unpacking Microsoft’s Acquisition Of GitHub

Satya strikes again. After being installed in 2014 as Microsoft’s new CEO, Nadella has turned around the Seattle ocean liner on a new course after the Ballmer regime. With Microsoft’s stock price (and technology brand) soaring of late, Nadella and his team have not been shy, with blockbuster platform acquisitions like Minecraft and LinkedIn, innovative product scoops like Accompli for email and Sunrise for calendar, and rebranding its very active, SF-based venture arm as “M12” to further its future technology agenda.

And yesterday, another feather in the cap — GitHub. Not yet profitable but invaluable to developers worldwide, the decade-old company bootstrapped, differentiated from formidable competitors GitLab and Atlassian’s BitBucket, weathered leadership upheavals, and eventually ingested lots of venture capital which helped them weather the challenges they faced. Buying that time and capital paid off, as Microsoft recently announced it would purchase GitHub for $7.5B.

Let’s Continue reading "Quickly Unpacking Microsoft’s Acquisition Of GitHub"

Seed Deal Flow Tsunami And The Quick Kill

If you read yesterday’s post, you can see just how insane the proliferation of seed financings have been. As a result, I personally cannot keep up with all the deal flow. This a common refrain among many seed investors in private. When I started investing and no one knew me, I would just invest in folks I knew well. There wasn’t a lot of noise for me. In the last five years, we’ve seen the number of micro-funds balloon from over 100 to over 500.

When I started back in 2013, I would try to respond to all the cold and “lukewarm” intros and investor referrals I received as a matter of courtesy. There is simply no way I could do that today (kids, other funds, commuting, etc), and I do not feel bad about this. Surely, some will read this as unfair, and I understand that — so I Continue reading "Seed Deal Flow Tsunami And The Quick Kill"

The VC Twilight Zone

Talk to any Bay Area VC in the last 24 hours, and the talk of the town among investors is universal: “What do you think of the SV Angel news?” Depending on your point of view, it is the perfect trigger for a conversation about the state of the Bay Area’s investment market. Let me be perfectly clear — I do not know anything about SV Angel’s inner workings, and in all of my own interactions with Kevin, Topher, Brian, and @pm (when he was there), SV Angel was extremely helpful and friendly as many people have attested to on social media. (I have never met Ron but hope to one day.)

From afar, in today’s environment of 500+ seed funds, SV Angel is held up as one of the canonical examples for its success at getting into superstar breakout companies (from Google all the way

Continue reading "The VC Twilight Zone"

Ramblings On Time Management

This is a post I’ve been meaning to write for many months. Ironically, I’ve haven’t had the time for *this specific* post until now, today. I’m writing while all my three toddlers are napping and my wife went to work to get organized. I’ll likely finish this tonight after putting the kids to sleep.

This is a post about time — and various attempts at time management. I’ll write a bit about how I manage my time, but most of this post will be about how time has changed for me and my wife over the years.

Right now, Saturday afternoon, the house is quiet, I’m in my home office listening to Ted Wang’s Discover Weekly on Spotify. I am transported over a decade ago, living in San Francisco, dating a girl who is now my wife, and we had nothing to do most of the time. We’d sleep in, Continue reading "Ramblings On Time Management"

Different Ways To Invest In Startups: The Opportunity… And The Catch

The public’s interest in learning more about and participating in venture capital seems to grow more and more each week. I have written a few posts here lately sharing my own experience and point of view, but then realized we all may talk about “getting into VC” as if it is a monolithic endeavor — and that would not do us or the reader justice. In this post, I wanted to briefly break-down the different ways folks can invest today (*assuming they have access to capital — more on that below in a footnote) and benefits & drawbacks of each one. Note, everything comes with a catch…

Angel Investing
-The Opportunity: This is where truly 1,000x outcomes happen. You are your own LP and GP. Angels have been critical to startups’ initial funding for decades. New investors can build their portfolio this way.
-The Catch: You need to get the Continue reading "Different Ways To Invest In Startups: The Opportunity… And The Catch"

The Series A Round: “Could A Round By Any Other Name Smell As Sweet?”

Too many investors subscribe to the Patek Phillipe school of investing “you don’t own the companies’ problems, you merely hold onto them [until you] can get the company to the next round of investors.” — Micah Rosenbloom of Founder Collective, April 2018

If you’ve followed me on Twitter or this blog, you’ve likely seen me (too often) talk about this term — The Series A — again and again. Looking back on this, in a way, it’s silly; yet, for seed-stage investors and the founders we back, getting companies from seed to Series A is a really important milestone, a milestone I’ve likened to getting into the graduate school of one’s choice. The prestige of the firms who fashion themselves as classic Series A investors legitimize a startup’s ambitions a bit more with their large check and structured investment terms.

At a minimum, getting to the Series

Continue reading "The Series A Round: “Could A Round By Any Other Name Smell As Sweet?”"