0:00At this point in Menel's history, right, we are going for broke. We are going for the grand slam home run. We want to see everything. We want to win everything.
0:08In this discussion with Veni, we discuss the craziness that's happening in venture pricing, when to pay up, when not to, how to think about market sizing, how to think about when to sell, how to think about being collaborative in rounds. This and so much more in a true nerd venture fest that is this episode. It is a very disorienting, confusing time. Each seed investment is an option bet. You're buying an option to see if it's an outlier. If there's an opportunity to make money on investment, we should do it. The rest of this is all noise. There's no way for venture to be
0:37successful in today's era without the max 7 participating in everything you're doing. There's no limit to what a person can do as long as you don't care who gets the credit.
0:58Beni, dude, I am so excited to do this.
1:01I am such a fan of your tweets. Who would ever call them blowhard, right?
1:05That's a terrible commentary on it. And I was so looking forward to this. So, thank you so much for doing it in person.
1:10Oh, I love this. Thank you so much. And I cannot wait to see if I pass your test.
1:15Uh, dude, you'll pass my test. Now, I want to use this as a a real like learning discussion for me because I want to build a firm like Menllo and I want to learn from the wisdom that you've had now seeing multiple different cycles. You just told me a story that I I loved and it was from you know two decades ago holding a sudden stock. Can you tell me that story and your takeaway?
1:35Yeah. So little bit of a past. Um previously I was at a firm called Globan Capital Partners and we happened to be investors in a company called Avenex which is nobody knows about this company AVNX. I remember the stock symbol even now because I was an associate did not have carry the fund. Avanex was a big winner goes public. They gave the they gave the associates a chance to own shares at the IPO. So I bought some shares at IPO. I remember putting the princely sum of $5,000.
2:04And at one point Avenex got up to 200,000. It was such a big portion of my portfolio. And my wife who's much smarter than me, she was my fiance then. We were getting married. She said, "Hey, why don't you sell some so that we can have something for a down payment for the house?" And I was like, "No, no, no.
2:21Avanex is going to go up. optical components is a critical part of the internet bubble. It's going to go we're going to make a million dollars on it.
2:28And you know how the story ends, right?
2:30It drops 90% and I think I sell it for around $8 to $9,000. So I call it the most important lesson I learned from a 90% loss, which is at some point you should take some chips off the table.
2:43I'm not sure what to take from that because I know I remember having Jake Saper on from Emergence and when he broke down Emergenc's returns basically you just saw this one meteoric outlier that returned 90 to 90 well with Viva yes but it was actually Salesforce.
3:01Um and if they had have held it longer and longer obviously it would have been even more meteoric. And so I guess my question is what should we take from that because we also see the dangers of selling too early. Agreed. I I think a lot of it a lot of this advice depends on the context of who you are as a person and what your balance sheet is.
3:22At this point in Menel's history, right, we are going for broke. We are going for the grand slam home run because we have had home runs before. We have a history of putting it on the table. as a 24 year old with very little in your bank account when you have that kind of for me ax gamechanging money it just makes economic sense to take some off the table and so I do think like the advice is there's no oneizefits-all for these things did you say you're going for
3:51broke like I I love that like all hands to the pump we are going for this does anything change with that mindset internally like is it more aggression is it more willingness to pay up. Is it more willingness to have less ownership?
4:06What changes with that?
4:07We mean is we are going to fight and try to be in the defining AI companies of our era. We want to see everything. We want to win everything.
4:20Cool stuff. So, I want to start with a concern, which is I don't know what business we're in anymore. Um, Venture is not venture anymore. I had my team come to me and say, "Hey, we can't find anything under 100 million." And I said, "Wow, that's a lot of that's a high price for a preede or a seed round." And they said, "No, no, no, Harry. That's the size of the round." Thank you. This is not venture. What am I to do in this world? And can you invest without a billion dollar fund? Venture has
4:49changed. Um, but I also think that you can't take a snapshot in time and draw, you know, a dot is not a line. And right now, you're right. every AI company wants to raise, you know, hundreds of millions of dollars. And I'm surprised they only said hundred million because there are some ones who there are some new labs who want to raise billions of dollars, right?
5:11And they all have arguments for it. Um, and it is a very disorienting, confusing time. I I will admit that. But I also think like these things change quickly.
5:23So So you you don't want to necessarily draw your long-term strategy with a snapshot in time. These things change quickly. So, do you play the game on the field as Bill Gurley says or do you call timeout and say, "You know what? I learned from 2021. You know what I wish I'd done in 2021? Less." This is a really hard conundrum for professional investors.
5:48You know, you're referring to my tweet, right? The Chuck Prince quot is when the music is playing, you got to dance. And as a professional investor, the danger of not dancing is that you do not know when this ends. Like I'll give you a story like there were a bunch of really smart venture firms during the com boom that got in in '93 94 made money and decided to step out of the game in '96 97. And when they stepped
6:15out of the game, they missed out on 97, 98, 999. And the LPs were like, "What happened?" Like, "We asked you. We invested in you because you're going to be at the cutting edge. You stepped out." And they stepped back in 2000 on the pig, right? So, timing markets is really really hard. So, I I I think you have to play the game, but I think you can play the game differently. You can choose to be more selective and you can hopefully think about portfolio
6:45composition and position sizing as a way of mitigating what happens in the cycle turns.
6:51Portfolio composition and position sizing. What do we do with both of those in a market then like this? How do we change them? I I I think you have to think about the venture portfolio as a bunch of options, right?
7:07Each seed investment is is an option bet. You you're buying an option to see if it's an outlier and and so you want to have enough of those so you can make sure you have an outlier. And then when there are true quantitative evidence based on revenue and quantifiable metrics that there's going to be an outlier, then you position size up. So to me like you have to think about okay, what is my fund size? How do I have
7:36enough at bats to use a baseball analogy or a cricket guy and make sure that you have enough at bats and then you only position size up on the things that are already proven?
7:51Totally get that. Do you think seed still really in exists today?
7:56If you want to go into the core AI world with the neolabs, I think seed is hard. But even like AI application like companies, they're raising 10 to 20 like the old 3 to five days which were still quite large seeds and that's gone.
8:11Honestly, I think I think there are two things that impact seed investing today is one is the size of the round and then you have this other sort of externality which is these large funds maybe including us somewhat being indifferent to seed valuations because they using that as an option check to buy because you you are aren't you I don't mean that to put you on the spot but yes I mean we we are trying to buy ourselves a seat at the table and the cost of buying that seat of the table we're somewhat indifferent to at the
8:39seed stage. because our real goal is to size up and invest in them if they become outliers.
8:45Totally get that. Thank you for making my life harder in that respect. Uh but I you should just invest in our funds. That would be funny. Uh that's very funny. Nicely transitioned there. I give you credit for that one. You said like so you place these bets so to speak.
9:02Completely agree. And then when you see discernable traction or revenue numbers, usage, whatever that is, then you can double down. Completely agree with that logic. We're seeing strange numbers like, you know, contracted annual revenue that's not actually annual revenue and it's kind of not live. You're seeing revenue run rate that's kind of extrapolated out from the best day in history and then we times that by 365 days. There's a murkiness to this revenue that we've never seen
9:31before that makes me feel quite icky in a lot of cases. Do you share that and how would you advise me and what do internal discussions look like around that? If any metric is measured by an investor and they put a lot of weight on it, it's going to be gamed and and that's just the nature. Maybe they should coin a lawyer for it. And there are two elements are going on. One uh I'm I'm blanking. I don't know if it's Keynes or another famous economist who's co coined the term bezel. When when when
10:00there's a boom the bezel is high which means like is a notion that the embezzlement of of things will be so not just people are going to pick metrics. People also going to have some interesting accounting techniques which by the way will happen every cycle and this probably happening at this cycle.
10:18So we're going to find out in the next few years exactly the accounting creativity of some of our founders and and the metrics being gamed by some of the people, right? Um one good example of it in doing the SAS way was a lot of investors put a lot of weight on net revenue retention. Mhm.
10:38And so one of the ways to gain net revenue retention is you could get a $100 PO but better get a $10 PO and get a $50 PO a week later because your net revenue retention if you just got the $100 PO was you know 100%. But if you got the $10 PO and $50 PO is for is now you know 500%. And the net revenue retention looks much better. So once a metric is measured, it can be gamed and that happens. And and so to me, a lot of
11:05this comes down to are the founders really focused on building a business?
11:12Are they focused on terminal value or they focused on markups? And I think you want to find founders and investors who are focused on terminal value.
11:20Do you believe in kingmaking? I know that sounds like a strange question.
11:24King making the theory that multiple successive and quick rounds led by strong investors can really help increase the chances of a company being successful. See to me that is a great example of solos's reflexivity, right?
11:39What do I mean by that is you have a company that does well, right? And because it does well and the revenue is growing really fast, it has a quick markup. And because of that quick markup, it gets more capital. It gets it gets to come on Harry's show. And then it gets more notoriety that allows it to get more human capital to the financial capital. It grows faster and that's under the markup. Right now, these are
12:08good things as long as the revenue is happening and the core business is building. But someone a copycat can look at that and said, "Oh, the secret is to have a markup." And a copycat investor might look at and say, "If it's marked up, it's going to be marked up again."
12:23And then reflexivity kicks in. And then everybody starts acting that way. And this explains how market cycles work until it stops. And and one thing we know from Soros is that all reflexivity will eventually stop. We just don't know how and when. And but until it stops a lot of people can look very smart playing it.
12:47We don't know how and when but we can play the game of predicting how and when. If you were to predict how, what is the first signs of this cracking? I think usually the first sign comes with some major debt default and generally equity is never the reason why these things crack because equity you you write it down you just take the
13:14loss debt on the other hand people have this expectation they're going to pay get paid back and so most of the cycles I know it breaks because people lever themselves and so if if you see what happened with um Leopold incurable investor. Right. Right. But when you're 4x leverage, it doesn't matter if you're right. You have to also get the timing correct.
13:41Mr's his risk management class in high school, didn't he? Poor old Leopold. Um when the music's going um so yes, I completely get you there. How do you feel about like the multiple tranch rounds so quickly? I I'm I'm meeting founders very often where they're like, "Oh, we're doing around this week at 100, but then we'll be opening up the second turn of it at later next week at 200 because we've got so much demand."
14:06This just gives me shivers and I feel like like kind of we buy any gold or we buy any car. I feel like in every cycle you get the innovators, then you get the imitators and then you eventually get the idiots. And I think the innovation of the tanch financing was the notion that I can get um build with me money where the these are investors going to come build with me and then use that build with me money at a lower valuation
14:33to get just money at higher valuation and then eventually transition to just pure dumb money and I think that's the logic of this right and so I don't need like money all money is not the same I will bring in some investors who are going to actually build the company with me and then I'll also bring in some capital along and then eventually I'll bring in some very low cost of capital and I think that was the intention but
15:02again like everything else now people everyone's doing it and it's not tied to the quality of the company anymore it's just it's become another technique for people to do so I find like these things start initially with some the core of the idea is actually a good one Okay, I want to actually raise capital but I want to distinguish between capital that adds value and capital that doesn't add value.
15:24Will you do it as a firm if you're coming in in the latter tranch?
15:28Absolutely depends on the situation. We have been on e both sides of this situation and I think if the company is interesting the founders are special absolutely really yeah why I mean at the end of the day I never care about what other people invest what they do. I'm looking at this round and say, are you not hurt by the fact that they are saying you're legitimately less valuable than Peter Fenton who we're letting in at half the price?
15:52Peter is amazing. I think the biggest thing I've learned over time is you never want to let your ego come in the way. My only ego is to make money for my investors. So, if I can make money for my investors, who the hell cares.
16:06Have you let your ego ever get in the way? I have done 100%.
16:10What happened? I I I think you get caught in ways of around negotiating for valuation or being in a syndicate or sometimes you're offered the opportunity where you think you're offered a small piece and you're like well I'm too big for that piece. I think in this business you have to have a high degree of humility because every week I get hit I get punched in my face by things I don't know and I think the biggest mistakes are when we get too caught in our ego.
16:38Look the reality is simple. We raise money for institutional investors with one and one new goal which is to return more of them back. If there's an opportunity to make money on investment, we should do it. The rest of this is all noise. And I think too often because venture capital tends to be dominated by personalities. People get caught in these. You know, you probably don't know a lot of people at Goldman, right?
17:03Everybody can say David Salman who's a CEO but the idea is Goldman makes a ton of money and those people just go do their job and I think too often venture capital we end up because there's so many personalities and people it becomes more about who and our ego as opposed to just do the job. I think that's forced by the fact that we are fighting for constrained supply though. If you're looking at say Goldman's public team you can buy Nvidia, I can buy Nvidia, they can buy
17:30Nvidia. It is a free market here. We are both competing for Max at Lorra and our check. If he takes yours, he won't take mine because there's one lead check. And so we have to have personality. We have to sell ourselves because there is a constrained supply. No. Yes. What you say is absolutely true. Which is that you have to have this two dualities and manage them. One is you have to have a personality. You have to be able to
18:00project a sense of differentiation, right? Because because why does someone choose Harry and not me is because they like Harry, right?
18:08Clearly, I see that in person even more so. Um, but I think if you get caught in that and you get so immersed in it, then you lose the sense of what the core purpose is, right? The core purpose of having that personality and charm is to make money for your investors. That's why it is, right? And if there's a time for you to make money for your investors where you have to let your ego take a backseat, you should do it. And that that's the right thing to do. Now, I'm not saying it's easy to do. I'm not saying I've done it, but it's the right
18:38thing to do. It's kind of like I know I got to eat right and exercise. I know that. I don't do it often, but I know it's the right thing to do.
18:45Yeah. But Jim Conn is so good.
18:49Some things in life are worth it. Like butter chicken. Um I'm a dish. Oh, you are? Oh, well done. Well, don't don't worry. I I like a doom too.
18:57It's fine. Um we said about price kind of hey we're a little bit less um focused on it when it's early. There comes a time when it does matter with the greatest of respects.
19:09Oh say it say men kind of pay up. Um and and for all you entrepreneurs out there we definitely pay up. So definitely call us.
19:18Yeah you do. And every time I'm like, man, like paying up and you prove me right, like you you you're right. And I'm proved wrong when I'm like, God, they're not disciplined on price. And so I guess I'm questioning like, do we just need to completely reshape how we think about TAMs and market sizing? Let's think about when people pay up. People just sometimes pay up to be able to win the deal, right? But I think some sometimes
19:47people pay up because they're able to see a bigger TAM than the other investor, right? And and I think in those cases, you're not actually paying a higher market price. You're able to see that the opportunity is bigger and therefore you're willing to see that possibility. Now, sometimes you're going to be right, sometimes you're going to be wrong. So to me, I don't necessarily think it's just price. Now, sometimes you don't see the time. you're just trying to win the deal and you that's the price it takes and you're just a
20:15clear price taker and that happens too. The problem is venture is an asymmetric game. You can lose the dollars you invest but you can make 10x if you're right. And that asymmetry means that the sense of omissions are way higher than the sins of commissions.
20:32What do I mean by this? You only see the deals we do, right? You don't see the deals we pass. But the most expensive mistakes venture capitalists make are the deals they passed, not the deals they did.
20:44When you say that, what's the most memorable past that haunts you? What is it?
20:51My most memorable past was that I was a young board member on a company called Plaxo, which had an incredible board. Mike Morates, Rahm, Shri Ram, um Tim Kougall from Yahoo, and Little Unknown Me and and Sean Parker and uh Todd Masonus and was a founder and Cameron Ren. Um Sean had some challenges on that board and was
21:20asked to leave that board and he was going he because I was the only person within 10 years of his age in that group. He was telling me he was going to Boston and he's going to work with this college dropout and he's like you should be get involved. And I'm like, uh, Sean, you just got booted out of this board and I I I have no idea what I'm doing and I I didn't even take that meeting
21:48and you know, I had probably had the opportunity to write a, you know, $50,000 check into that. And those are those seed rounds were different. They were million-dollar seed rounds. That's a tough one.
22:00Um, what was Shan like back then? The way he described pla zone, his vision actually worked out. He understood virality, network effects in a way, his thought process around what happened at Napster, you know. So, so my rule of thumb is I'm always looking for people who are incredibly good at communicating very complex concepts in a simple manner and and just have insight.
22:29And Sean just had insight around human behavior and complex concepts and could boil it down in a simple way. He was a really good communicator.
22:41He gets to have Justin Timberlake play him. So I mean it's a pretty cool one. Uh drops the the love it. Um we actually did that. We were the 20-minute VC. Now it's just 20 VC. Yeah. Yeah. Thanks, dude. Um I was talking to Amy beforehand, speaking of kind of the fantasy back there.
22:56Amazing partner of mine. amazing partner of yours and she said that you care a lot about understanding what brought founders together and hearing about you talking about Sean there made me think of this. Why do you care about what brings founders together and are there any patterns or signals that excite you?
23:13The company you build is a team you build right and and so much of the DNA of a company is set by its founding team. And so what brought them together?
23:25why they thought in a world of six billion people they should be the people to do this. How they think about each other's strengths and weaknesses. I think these things all sort of like minority report they're like a precog that tells you around how they're going to make decisions, how they're going to build the rest of their team. So I think it gives you a clue about who are these people and ultimately I think the company's culture and DNA are going to be shaped by the founders. You can ask one question that you find most
23:55revealing of a founder quality. Doug Leone's to me was the one I remember most and he always says, "What's your worst reference?" So, you know, that's a great question. I generally ask your five best friends, right? And imagine they're in a room and if I had to ask them three words to describe you, what would they what would that be? That's a question I normally ask people, right?
24:15I'll tell you, I I listened to Mike Morris on the interview and he asked a question and his favorite question is if you could go back in your life and change one thing, what would that be?
24:25I think that's a pretty interesting question. The reason why I like to ask how your friends describe you is I I think you're more likely if I were to ask you what do you think about yourself? It's harder. But when you think about your friends, you can sort of externalize it and then that gives you a clue about how the people around you think about you. And it also tells you your self-awareness because usually after I do that, I also do references and I'm trying to see if the references match someone's
24:54self-awareness. Right? It's actually okay to have if if you know your weaknesses then you have a much better chance of managing them. It's the people who are blind to their weaknesses that usually have challenges.
25:09Don't mind my weaknesses are revealed in the comments section of every interview. So I I see them glaringly. Um you know one thing that's been I think uniform across the industry is we've seen ownerships go down. Even the hailed benchmark now take less than 10%. Obviously, I thought I thought they said 20 20% are bust.
25:26Uh may maybe maybe let's stick to that message. I love the benchmark guys. So that absolutely but does ownership matter as much anymore. Of course it does. Ownership always matters. But I think you have to think of that relative to the opportunity. Right? What I mean by that is yeah, would I love to have 20% of a company? Sure. But I'd rather take 2% of a trillion dollar company than than 20% of a $100 million company.
25:54So you'll do deals now for 2% 3%.
25:58We did anthropic we own less than 2%. So um my my point is that I think when you think about ownership you can't think of that in isolation.
26:06But I think you're either in the ownership game or you're in the money movement game.
26:10I disagree a little bit. I I think when you're getting your option bet, you want to have ownership because when it's not clear, so let's say you know it's an outlier. If it's an outlier company, then you are in the capital invested game. Prior to it being an outlier company, you have to be in the ownership game. Your best situation is you're in the ownership game in outlier company and then because out then you go into the money movement game. You know what I mean? same result.
26:39No, I thought you you the ownership doesn't matter pre it being an outlier cuz you're there for the information. When it does become known, it becomes a money concentration game.
26:48You want to have enough ownership though. I mean, you look at Higsfield, my partner Amy, she killed it. She We got 15% of the company for a $5 million check. You had Alex on on your your podcast. Incredible entrepreneur, incredible business, right? So in that case we got the ownership and then we also have the opportunity to then size up.
27:12Yeah we've invested.
27:13Do you get my rationale though for actually it doesn't matter if you have ownership in the first place. What you're buying is the information to size up. I get that and I I I if if you're asking me is it better to be in the company regards of ownership or not be in the company. Yeah, it's better to be in the company, but it's even better to be in the company with ownership because now you actually have gotten your ownership that's going to it's going to drive real returns because the problem is once there's an outlier, everybody
27:41knows about it. There's the it's no longer a selection game. It's just okay, can you get access and can it's a position sizing game. There's no alpha there. And then that's the true in the AI greatest hits. Everybody knows these companies. How much of your fund will you put in a single company?
28:00I don't think we would put more than 20% of Have you gone up to 20% before?
28:06Uh we have hit 20% on one company.
28:15It's got to be an exception, right? Um generally that was a hard conversation. We 10x this year, we 10xed last year.
28:24Okay, Veny. Let's do it. But I I do feel that you have to think about the question of ownership and concentration as when what do I mean is that where was the company when what information do you have how much conviction can you have as an outlier company because the the thing about position sizing is you want to position sizes when the data is there and if you position size it ahead of the data then you're taking a lot more risk.
28:50So the question is not did you put 20% of the fund of the company in one check at the beginning of the fund or did you ladder up to 20% on the basis of new data obviously it's much better to ladder up on the bas of new data and and I I think in an era where venture capitalists are going to have ownership come down right I mean I wish we could get 10% even 10% is hard right now your way you're going to win is you're going to establish a position and then size up
29:19as a company does well so that you have sized it commensurate to the outlay opportunity.
29:26Totally get you and get that and everyone says but ownership doesn't matter so much because outcome sizes are so much larger than they've ever been and and they are that is a valid answer.
29:37My question is are they on the whole like do we just have a breadth of companies that will be much larger or is it really just a handful of anthropics and SpaceX and cursor on the smaller end at 60 billion which is still enormous and amazing but is that a good enough justification for ownerships going down?
29:57I think the problem comes down to your portfolio composition, right? If if you are in one of those outliers, I think you can survive with low ownership. But what happens if you are not in these big outliers? Then the because what essentially you're playing a game to use uh baseball analogies, you're playing a game where there's only grand slam home runs or strikeouts. There's no singles, doubles or triples, right? in cricket terms by only scoring sixes and not
30:27having ones and twos. And the problem with that is that if you don't score the six and you don't have the ones and twos, that's going to be a tough fund. And so part of getting ownership is giving some insurance for you that if you missed out on the outlier, the sort of midsize outcomes can still move the needle for you.
30:46But will you do singles and doubles?
30:48No. The goal you never the goal is always to score home runs, right? But sometimes you strike out and and so if you strike out all the time, that's going to be a tough fun. So the idea is that you want to at least say, "Okay, I went for the home run and I got a triple." But I just don't think founders are aware and I say this and people always get at me and I I think they kind of miss the point because I say it like lovingly for awareness for founders that the game has changed and that you know going from 1 to 4 million and then 4 to
31:188 million and then 8 to 16 and then banking in 5 years time we're going to hit 30 and that's an amazing achievement but it is just not enough to get venture excited today. Do you agree with that?
31:32Yes, I agree with that.
31:34Again, snapshot in time because you're seeing companies like But do you think Venue will ever go back to being excited about that?
31:42Well, if you're not they're not excited about it today because you're seeing companies go from 1 to 10 to 50 to 100.
31:48So they're getting to 100 in 3 years or in some cases they're going from zero to 1 billion in 18 months, right? So when you see those kind of companies, of course you want to do those not the ones. But that's because we are moment in time where there's certain trends allowing you to do it. I don't think this continues forever. And so so I think this is where I think you have to take the long long horizon look at this. Right. There were companies who grew they grow fast
32:16but there's a combination of things that make these companies grow fast today that may or may not continue.
32:22Totally get that. When they grow as fast as they are, the rounds come thick and fast and the prices are high.
32:28Yeah. I mean, you look at Instinct, God bless, I wish we were, you know, they've gone from, I don't know, 250 million to 10 billion in 10 weeks.
32:36Would you have done that round at 10 billion?
32:38Smart people have done it. Um, we are in town, which we love and we think very highly of and we're excited about that. I think that there's something going on there. There's a true phenomenon. Um, what I don't know is to understand their data and what it costs for them to keep growing their user base and how does the Muse launch affect their growth.
33:02Can I ask you everyone kind of goes into a lot of investing now with the idea that there's downside protection? I mean, no is incredible. It's in a very strategic space for the incumbents.
33:13Worst case 1 and a half billion lick pref. It's a no-brainer for Microsoft to do it as an addendum to co-pilot or Apple to do it. Jesus Apple, please do it. Do us all a favor and save us from Siri. Um, do you think that downside protection, ah, don't worry, the incumbents will buy it is okay to have or quite a dangerous mindset to have. I think you can easily rationalize a lot of things if you take that mindset. And and the problem is
33:45you threw out this billion and a half number casually because we in this environment where you know AMD is buying a company for 8.5 billion Nvidia bought hugging face for 14 billion you know stripe bought open router allegedly for 8 billion you know allegedly allegedly allegedly uh and I think we have to go and say these are point in time where companies are doing it may not be that way And so today it feels like a billion and a half. It's oh
34:14no big deal. If I'm right it's going to be worth 100 200 billion. If I'm wrong someone going to pick it up for three four billion. By the way that's what you're referring to my tweets. I wrote this thing about if you go back and look at during the com era you know Nel bought Cyros for three and a half billion. Lucen bought Chromatus for 4.5 billion. These were companies with no product no revenue just teams and they bought it with their stock. And so it felt very similar. In fact, I believe um
34:42Jeff Yang from Redpoint, legendary investor, had this quote in the internet standard, which is a magazine that's an existing movie. He said, you know, there's no um there's no risk in venture capital. The company success will be sold for billions. If not, it'll be bought for the proof stack. And you know, it didn't quite work out that way on the other end of the cycle after after, you know, March 2000. So
35:10I I I go with trepidation but I just wouldn't take the mindset oh some large strategy is going to buy my company for preference for the professional stack because they don't care about the investors right they care about the found why would they do that why would they just hire the founders for the same package in a lot of cases they kind of are in these structured deals be honest and screwing the investors So you've seen that and you you can't take that
35:39there's no reason for them to take care of the captive.
35:41Do you think about the dilutive nature of businesses today? And what I mean by that is just like we are suffering more and more dilution as an investor class never before and it's a better time than ever to be an employee given the levels of stockbased compensation SBC for people. Um do you do you worry about that? Think about that should I worry about that and think about that for sure. I mean we look at whatever we invest in at the seat round and we
36:08assume by the time we sell or exit the company if we own 10% we would have 3 and a half to 4%. We expect 60% dilution from the point of a first check, right?
36:21And that's a combination of dilution from financing versus a dilution from option pool expansions.
36:29And so you have to like really think of yourself as whatever ownership you bought in your first check, it'll only be 50% by then at the end. The interesting thing is that is very common in a lot of companies we're seeing today. And then the other interesting thing is companies are sometimes scaling so fast. Allah open router Alex a friend of both of ours where they actually don't take that much dilution because they scale so fast so quickly and so efficiently where actually you suffer almost much less dilution. So it's almost a tale of two dilution worlds. Do
36:58you know what I mean? Yeah. It's a it's a function of time. So so the way to think about it is that um I and I don't think we spend enough time in venture capital thinking about that. We should say what is the time horizon you're going to hold the company because the time horizon will determine your dilution. Right. So part of the reason when you are in situations where your dilution is less is they have quick exits. They crew their value fastly they have quick exits and that's a double win. When your time horizon is long
37:26there two hits you your IR gets hit and your dilution you're going to have meaningful dilution. Did you think of that when investing which is just like what really is the ramp? There's like businesses like in the ERP space where they're like, "Ah, but the revenue is such high quality, Harry. I get you. It's not as fast as your Higsfield or your Lora, but it's so high quality."
37:48And I'm like, "Yeah, yeah, [ __ ] it's slow." Am I wrong to think that? No. I I I think the velocity of the business is very important for venture capitalists, right? Right? And and the velocity will determine a a bunch of things, right?
38:07Because the other reason why your dilution goes down is like if you have a fast uptick in valuation, the amount of ownership you got to give for your next set of recruit, next set of human capital is a lot lower, right? So you you are a $200 million company and you're giving, you know, 2% of the company to hire a senior exec, right?
38:29That's pretty meaningful. You quickly become a $2 billion company. You don't need to give. You're going to give RSUs and you give the same person $20 million, right? Which is.1%. 1% DPI or IRRa.
38:42Um both. I mean you can I I do think actually that you can't have IR without DPI. I think the question you're trying to ask is hey will you settle for a larger DPI over a longer horizon or do you want quicker DPI uh with a faster IRRa I think the reality of venture when I joined this is now dating myself 28 years ago people didn't focus on IR people were like focus on like cash on cash return
39:10because IR took care of itself I think in today's venture the the game has changed you have to focus on IR you know why Because there's no way for venture to be successful in today's era without the Mac 7 participating in everything you're doing. Every every venture company is writing a tax to Nvidia in some way, shape or form, writing the attack to hyperscaler in some way, shape or form and possibly writing a tax to the foundational model in some way tax
39:40form. So if you're going to be successful, right, you're going to be writing attack to all of them. All of them are available in the public markets or they will be soon in the public markets for someone to invest in a no fee no carry index fund. And so you have to think about your IRRa as I've got to beat that with thousand basis points to to justify anyone giving you capital in the private markets.
40:04You mentioned town. I had JD on the show. Really like him. I've known him since the the plan days. I'm pissed off about that one cuz he started the company when he left and I remember talking to him about it when he started and he was doing something in some terrible space. No offense. Uh he'll agree with me and then he obviously pivoted.
40:20Tax thing they were doing something.
40:23Thank you. I'm too old for this [ __ ] You're too old. What am I?
40:30You're a spring chicken. Um and for anyone watching, they'll see that you look much younger than me. Um, but my question to you is we obviously know what happened with the town round in terms of competitive nature and dynamics there. I don't want to go into that.
40:41What I want to go into is actually does competition matter for VCs to invest against now? It seems like Andre has, you know, three companies all doing the same thing and many big platforms do.
40:52Does it matter being in many players in the same space anymore?
40:56I mean, this is a personal preference, right? I think I think culturally for Matt, Sean and I, you know, we like to be committed to the entrepreneur and the situation is going to be like look if we take a board seat and we write a big check, then we want to be if it's like if you invest in the seed round and you have a small check, you're a passive investor, that's a different issue, right? But when we when we make a commitment to the entrepreneur, we want
41:25that to feel like a two-way commitment, right? We expect them to put the interest of their shareholders and commit to it and we as shareholders need to commit to them that we're going to and that's why we didn't invest in open AI right we we only stay with anthropic there's no shade again venture is changing in a way that multiple people are doing different things I think you just have to figure out what is authentic to us and our values and live by those and I think for us when we be
41:53make a big commitment to the founder we think of as a two-way They commit to us, we commit to them.
41:59One thing that we see a lot today is the compression and deployment timelines. In other words, people investing much faster. All the LPs that I speak to are just saying, "God, Harry, Jesus, everyone is coming back to market so much quicker. They're bigger."
42:13Is that okay or is that a sign of peak bubble? Yeah. You know, it's very interesting.
42:18LPS want smaller funds and then they want you to not come back quicker. The the problem is like one of those can't be true. Like if if the opportunity we have is real and there's AI is a the biggest economic platform shift of our lifetime and you want smaller funds, they're going to come back quicker. Now there also large funds are coming back quicker. So that that's a different issue. But I I I think that in the time we are in is one in which
42:46you're seeing companies grow so fast and they need cap and and they need capital to grow. Like this is not a situation where you can grow without capital. This is not Google. Google if you go back probably raised less than 50 million in the private markets. You can't do that today in AI. You need compute. You need to scale. So, so to me, because you're seeing them grow so fast, their capital needs are growing and and and if if a venture firm doesn't provide it, they're going to get it from their competitors.
43:12So, actually, if managers are deploying a fund in 18 months, LP should forgive them.
43:16I think the LPs should ask questions and say and say, "How have you thought about it? How are you managing it? What's going to happen if it things go?"
43:24Vintage devestication does matter, right? It does matter. And and people have to be conscious about that. I mean when I look at Menllo's history, the one fund that wasn't successful at Menllo's history we you know 50 year history we only had one fund that's not return capital which was Menlo 8 which was invested in a 10-month period between 2000 and 2001. Yeah, that did not was not quite the outcome you wanted.
43:50Menlo 8. But I I bring that up because I do think time diversication matters. Now, by the way, Menlo 7 was one of the best funds in Menlo history and um yeah, but you remember Excel 2005 just pre the Facebook fund and they had massive LP chunk cuz they went and did like a load of clean tech and bio and it was not good and then Facebook fund.
44:11So, so, so, so to me, I just bring that up like look as GPS, we take you got to take the fudicial duty you have to LPS very seriously and you got to balance that decision. What I do know is that you can't have like it's not you can't just have dogmatic rules. You have to play the game on the field.
44:31And then you have to communicate what you're doing in a transparent way to your LPs and tell them what's happening. And some LPs are going to be like, "Okay, I agree with you. I want to play it." Some people are not. And you got to respect that. But the point is that you might have no choice to play the game this way.
44:48Did you ever scale out of an LP class?
44:51And what I mean by that is, you know, the funds now are reasonably sized.
44:56They're not egregiously sized. You know, you're not David George asking for the US Treasury, but you're 3 billion. It's a lot of money. For some LPS, they're like, it's a lot. Was there a time when you scaled out of endowment say, and suddenly you had to be pension fund invested? We've historically, our anchor tenant has historically been the Washington State Investment Board, which is the public sector pension fund of the state of Washington from NSLP by the
45:24way. Highly recommend them to anybody.
45:26They've been our anchor tenants since 1981. So, we have never had a reason to scale out because public sector pension funds have been a part. It's a little bit of a cultural dynamic. I think the founders of Menllo came from very humble beginnings. Um, Dibbles grew up in a house with no running water or or toilets. Um, I think John was orphaned very early. He was a scholarship student at MIT. And so they love the idea of working for public sector employees
45:54because that felt like working for their parents and less these people look more like their parents than their children. So there wasn't a fund where LPS went, "Oh, Venie, you're getting pretty big now. I I think you're just scaling out of our our sweet spot." No, that wasn't the case. But we had we raised the first billion dollar fund in venture capital.
46:15Menlo raised Menllo 9 which was raised in 2001 was a $ 1.5 billion fund and Menlo 10 which was raised in 2004 was a $1.2 billion fund. Those funds did not perform as well as we would have liked and many LPs did leave us. You manage a lot of the LP conversations today, correct?
46:36I do. Matt and I do a lot of them. Yes. What do you hear from them? As I said, I hear deployment time is down in terms of how people investing much faster and the funds are just getting bigger. And then I also just see mimicry, which is like I'm calling this out because it's a compliment to her. I I never [ __ ] down on people uh other than your piece.
46:59But every LP just wants Sarah's fund and I completely agree Sarah is incredible and you should want her fund. Great. but like just this complete herd mentality and Sarah and Mike are amazing and no no question about that. Um you know I spent a lot of time with them with LPS and I think first of all a lot of them have two complaints. One they're like enough TV over PI. I need to get some DPI. So I think if you deliver DPI, I think you're
47:29already in the in the right side of the table. And I think it's easier to come back to them to ask for more capital when you deliver DPI, right? So that's one. Um second, I don't think people can afford not to be in the AI economy. And I'll tell you why. Most of them have much bigger private equity portfolios than they have venture portfolios. Like in many cases, 3 to 4x exposure private equity. A lot of private equity over the last few years have been software and
47:59those positions are directly impacted by AI. So if you want to hedge against your private equity portfolio, you got to be in in the AI economy. And so that's the that's the piece that that forces them to come back. So if you are someone who has given people DPI and you can credibly make the case that you are going to be a play in the AI economy, I think you can raise money from LPS.
48:24You got to have given DPI.
48:27We see companies scale faster than ever. As we've said, we see prices that are very high. How do you think about the internal conversation of wo X company is now valued at 10 billion. Can we take some chips off the table? What does that discussion look like? and any lessons on how to sell successfully.
48:46I think you have to step back and look at any situation in which you have a 30, 40, 50x return on your dollar and ask yourself, should I take some off the table? And I think the right time to do that is when the entrepreneur is thinking about taking some right off the table. And I think if you were to work in conjunction with them, what if it's not material? I'm I'm you [ __ ] this. I'm using this as a
49:15consulting lesson. You can invoice me later. I have a company where we are like 40x up and wow, fantastic. You got 100k in there. Return $4 million back to a hund00 million fund that it's in. I I I don't think it's a it's a size issue.
49:30It's just to me like look lock in the gains, right? you you they there they were think if you go back to the SAS portfolio in 2021 there were valuations done uh at let's say pretty high prices if people had taken 10 15% off the table even if it's small it locks in allows you to go long the other thing I I I tell entrepreneurs is that just like when you take some trips off the table you're more likely to go long so are we right because we we we we can
49:59now afford to go long with you and so it aligns and so to me when you ever said all of your position?
50:06I generally no not unless the company is being sold. Not interested. I think that's a different situation. I mean the only time I think it's like if you do not have a relationship with the founder and you like that's that's different. But if you as long as you are and you're in you're going to ride we ride and die with our founders.
50:25Jason Lmin says on the show whenever a founder leaves like I write it to zero.
50:30When a founder is gone, it's zero zero zero. Do you find it to be the same?
50:35When the founder leaves, you're like, we're supportive, of course, and we're still here, but like mentally, you're like, that's a zero. My friend and your friend Nikkesh Aurora would disagree with you and say he goes on founder mode. I mean, look, there are people like Nikkesh G2 Patel at Cisco. They go on founder mode as as an exact. And I think like it's sort of an insult to people like that when you say, "Oh, the founder leaves." like look at the situation who who replaced them founder
51:02mode is a mode of working it's not it's not tied to anyone personally I think anyone can be a founder in terms of the founder working in a founder mode and I think some people do and I mean Frank fluteman look at Frank joined data domain um snowflake service now in each of those places he acted like a founder he didn't act like an exact by the way Nick Ash please don't kill me I love you more than ever and I've always loved you and it was Vanki that said it. It wasn't me
51:31that said it. Don't I'll give you Vanki's address later. I'm going to get a brick.
51:40I'm terrified of cash. Are you kidding me? Uh um so yes. Um that's very funny. Um can I ask you then? We see so many sales now. It's like you know FA sells for 8.2 billion. It's like it's amazing. A phenomenal accent. Well done to everyone involved. yesterday's news. I mean, open routers.
52:01So, yesterday's news. We've all forgotten about it. And I don't mean this gibbly or any I know that sounds so child of this ecosystem, which I'm not sadly. Um, are we just going to see a load more exits now?
52:14Yeah, I I think you're going to see because I think there's competitive pressure. There is also this notion that we have a regulatory regime that will let you do M&As, right? There's been a backlog of M&A that been have that was supposed to happen didn't happen because we had a different regulatory regime.
52:31There's this notion that this is may not continue forever. So one you have a window of time. You also have competitive pressures right when when when AMD buys a model real world model does Nvidia need to do something? Do other people need to react? And so I think um every acquisition forces a bunch of competitive dynamics we have to consider. So I and then and then people have equity prices right AMD is now a
53:00trillion dollar company you know 8.5 billion is still I think less than.1% of the company right so so you can do stuff because of this combination of things and then the notion that you know anything that lets you catch up in the AI wave is very high like is did Meta do a good job paying up for scale I think they would say yeah If you look at the market cap ad of Muse to Meta, maybe
53:28that 15 billion seems cheap. Now, I'm also like so happy for Zuck. It feels like he's kind of almost got like a co-founder in Alex Wang who he can delegate some of the [ __ ] to. Do you know what I mean? I mean, Zuck is a great capital allocator. You you you go back and look at the history of his capital allocation has been phenomenal.
53:47He bought Instagram for a billion dollars, right? He has executed and I would say like bought a NAVO for 400 million which allowed him to see everything that went so smart.
53:59So, so to me like if you look at the history of um like I think they're incredible technologist but I think there are very few people I think who are incredible technologist and good capital allocators Zuck is right up there.
54:11If you could choose one skill for a founder at scale between capital allocation or product visionary what would you choose at scale? Um I would I would choose capital allocation because by the way capital allocation by itself also captures product visionary because you you're allocating the capital to the things that matter. So in some ways you know you part of the dynamics of deciding on capital allocation is which product direction you need to go but the other way is not true. There are some people who can be great product visionaries but
54:40who might not think about where what is going to be the return on that snap. Love the dude. Love the dude. I mean like free candy every year, SBC through the roof. You a shareholder of Snap?
54:52We are not a shareholder of Snap, but look look E is a product genius. There's no question about that, right? And his vision for Snapchat and what he's executed, but I I think it' be fair to say you have not been rewarded being a shareholder of Snap. At least for the last seven, eight years.
55:10I was trying to be polite here.
55:12That's like giving Titanic an eight out of 10 in the holiday review book. Like That's incredible.
55:18I've been rewarded. I've not been rewarded. I blow hard. Um yeah. No, that that's um that's a good way to put it. Okay. Um that's really interesting. Uh are you worried by how much money is being made by people? Like I'm seeing sales reps at OpenAI walk out with 30 40 million bucks. You know, here here's the thing. Um I always believe this. Um money doesn't change people, but it reveals them.
55:45So, so what do I mean by that is money and power people think changes people.
55:48No, it only reveals them. What it means like if you're an [ __ ] before when you have money and power you reveal that and so so what I have found is that the people who are really motivated they're going to be motivated with whether even if they have lots of money and the people who are not motivated who are acting it when the money shows up they will opt out and so to me it it won't change for the A players because for the A players
56:18it it's money is just a way keeping score, but what they love is the game.
56:23So, you're not worried about house prices in the bay and the inflation that we're going to see with IPOs from SpaceX, Anthropic, Open AI.
56:33That worries you or of course it does. I mean, it it it changes the character of the place. But the real issue we have, and this is the issue in California, hopefully not in London, is a question of supply. It's not a question of demand. At the end of the day, we have tremendously increased the cost of and the process of building a house. There's no supply coming in. So any uptick in demand results in prices going up. The way to address that is not to worry about the demand but to increase the supply of
57:02housing stock. And we just do not have the collective willpower and this for a progressive state there's more nimism in California than I expected. And the nimism prevents you from building more housing stock. I saw a a tweet where you said something. You responded to Brian Armstrong. I do my work. I was dangerous.
57:24Yeah, it is dangerous, but I'm I'm joining you on this side if this is where you're going. Um, and you said like I I appreciate your leadership like through the woke times. I mean, I I think what I particularly appreciated about Brian is that he laid out his principles of what he believed and he told people, "Hey, if you really want to engage in political activism, then Coinbase is not the place for you because we do not want to have um
57:52political dialogue here. And if you if that's important for you, you should go and find a place in which you can do it." I think that takes courage to say.
58:00Um, and I think but it's being true to what he wanted to do. And to me, I think that's most important is try to be authentic to who you are. And I think I appreciated him being authentic when I think it came at a cost, right? They were definitely he was catched in in the press and maybe on Twitter and he had people leave, but I think he ultimately said, "We want people who are authentic to Coinbased values articulated by me, the founder." Have you ever been inauthentic to who you are?
58:28I think there are times when you know you say certain things to founders because you want them to like you or you want to win a deal that I think may not be truly authentic. What I'll tell you is that I have dealt with my own insecurities and feeling like an impostor.
58:50And I've gotten more comfortable in my skin now where I just feel like I just don't do it. And if it if it means I have to say something inauthentic to me to win the deal, I'd rather not win it. And and but that's easy to say because I'm sort of at the point in my life I like, you know, that win doesn't matter. Of course, I like to win, but it's not going to change my life. So, so I always say it's very different when you're a 25 year old and you're trying to build your career. You do whatever it takes to win. And so in
59:19some way morality is sort of a privilege of the people who already succeeded. It's easy to be moral now when you already have the things you have. The question is will I be a moral person if I were to go back 20 years ago and start there. That's the real test and I don't think I've lived to that test as much as I would like.
59:37Are you a better investor now you're richer? Yes. Um, you're not afraid as much. You're not afraid of failure.
59:45You're willing to go all in and and and and go, you know, go to the hill. And so I I I I just think you can go for broke more easily, right? It's sort of like, think about it on a poker table. The guy with a big amount of chips has so much leverage to win, right? they they see more cards and there's and so ironically and this is why I think you know like the way our capitalism system is set up the rich are going to get richer because
1:00:13they just have more opportunities uh to be the bully the poker table.
1:00:18Does that mean that emerging market man not emerging market but emerging managers are just in the old staticom game? Like I don't see and forgive me for this and I don't like binaries but [ __ ] it. You're a media so you kind of have to do binaries. It depends doesn't sell. Um I30 to $100 million funds are just the worst place to be.
1:00:38Yes, they are today. Again, snapshot in time today. That's a tough place to be because you're playing in a poker table where people have such high chips stacks.
1:00:47I think they were 5 years ago, dude. In all I I think what happens is if you are lucky enough, right, and I don't know if this true, but I'm sure if you were to go and look at the cap table, there was some small investor who wrote a check. Oh, Anony wrote a check into Anthropic.
1:01:02Now, maybe you didn't have a fund then, but like you wrote a check. You you were a 30 to $50 million check. You wrote a check into the anthropic round, not the $4 million round we did, but like much earlier, you're doing fine.
1:01:13Yeah. But he was an angel, not competing for rounds. And so what I'm saying is the 30 to$100 million funds where they need to move like a million, 2 million, 3 million, it's kind of a pain to fit them into rounds. No, actually putting in 100k or 200k.
1:01:27I mean, I would Yes. I'm I'm just your principle is right but I'm just trying to think about counting I try to be intellectually honest right think about conviction how how did Sarah and how big was Sarah's fund I want to say first was yeah so so $200 million fund and she found a way to be in some of the most interesting companies already so you know can be done and then you've got Dave Tish I think it'd be a really good example actually as well with Box Group like it goes against the portfolio construction that
1:01:56all LPs love which is high ownership concentrated profile and and so I I I think there there's always people who figure out how to play agency odds, right? And so but they are the best of the best and and so you don't want to extrapolate, but in general those are tough places to be unless you're exceptional and and I think I think like I was reading a tweet between um Sarah and Patrick and Patrick like she was like Sarah was telling LP like my strategies are just going to
1:02:24work harder and that's probably the truth, right? The truth is everybody wants to have some magic strategy that you're going to do that nobody else is going to do. There's no magic strategy. Everybody everybody in the venture industry is smart. You have to out hustle and have grit to make through and Sarah definitely has to.
1:02:43Final one before we do a quick fire. Um we mentioned PE being challenged in a lot of ways by a lot of AI companies. Um we're seeing you know the hand the keys being handed back at companies like Medallia. You're seeing plenty a lot of struggling companies in a lot of these PE providers books.
1:03:03Is P pretty structurally [ __ ] Look, they're smart guys. Um, and they know how to figure out and operate these companies, right? They also have majority control. Uh I I think in some ways I would say the ventureback companies that SAS companies where they people paid high multiples the ad tables and mirrors I think and they got spooned as I say
1:03:33and I I think those are in a tougher situation right I think I think I think venture P is a challenge too but the reason why I say the venture back companies are even tougher situation at least with P you have a majority owner who controls the company, who can do things. You have a lot of zombie SAS companies where nobody owns enough to be able to do anything. Nobody cares. And so, how would you actually land that ship? At least with PE, they can do some stuff to it. Now, landing that ship is going to be hard for everybody. But I I
1:04:03think I think in that class of 2021 SAS companies, the best outcome is getting spooned, which really means getting your capital back. And the worst outcome is going to be zero.
1:04:13Good old bending spoons. European. Just Just going to put it out there. Uh, so the quickfire is a combination of mine and Joff.
1:04:22On your team. Yeah. Yeah. He came back with some Why do you love pocket squares?
1:04:29When I was growing up, I didn't care about how I dressed and I did not take any effort into it until I had this one conversation with my dad when he said, "Listen, when you dress, you're not dressing for yourself. You're dressing for others. you're showing them that this is an important meeting that you're expressing the importance of what you're doing to them. And so to me, I I know my partners make fun of this. I dress up for partner meetings because it's like
1:04:58it's a self message to me about the people I'm meeting are very important and what I'm going to do is important. I need to take that very seriously.
1:05:07And now I feel guilty. Oh, Christ. Wait a minute. You know, Jo teed me up for that one, didn't he? Gosh. Um, I like that. It's really nice. Um, yeah. Yeah. [ __ ] Good. Well done. I should probably think about that more. Um, you can invest in one seed fund and one growth fund. That's not manly. That's good. Which fund do you invest in? I have tremendous respect for the best folks.
1:05:33Uh, I I was a co-founder with Byron and I've known David Khan and and I think um they are super disciplined. So if I could invest outside of Menlo, I would invest in Bessemer.
1:05:43That's for the growth fund. What about the seed fund?
1:05:46You know, so I'm looking for people who are going to be in interesting AI companies. There's this group of guys called E14 out of MIT and I find them to be in interesting AI companies and they seem to really understand the MIT ecosystem. So who when you hear you're competing against them are you like oh [ __ ] I think of more people than firms but I I would say
1:06:16benchmark super hard to beat benchmark harder to beat than sequa I think so I mean I I obviously they're both great forms but like benchmark I think is super hard to beat and whatever they do combination of uh Eric Chaitton and Everett and Jack um they are just they are just a beast.
1:06:38What would be your single biggest piece of advice to an LP allocating into venture in this time?
1:06:44Look at the windshield, not the review mirror. The results and financial performance are rear view mirror calculations and they're good about telling you what they did in the past.
1:06:56They don't tell you how some firm's going to do the things like result performance is a lagging indicator and it's actually a 5 to 7 year lagging indicator. So my advice would be call a bunch of entrepreneurs or successful AI companies and ask them who are the partners they respect. And my email is they didn't take the money.
1:07:23And if the firm you're talking to doesn't have a few of those partners in the mix, then that's your that's your windshield.
1:07:30How do you stop your team getting arrogant? You guys have got the winning hand. you're only as good as your last investment. And and so to me like you have to go into the mindset I always say like doesn't matter if you're the lion or the antelope in the savannah. You wake up in the morning if you're the lion. If you don't run, you don't eat.
1:07:51If you're the antelope, you don't run, you don't live. So you just have to run. And and uh I feel like you have to think about the most important meeting is the next one. The most important investment is the next one. The most important board meeting is the next one. And if you don't spend time in the present thinking about it, I I think you lose in this game.
1:08:17What's the secret to marriage when you scale wealth over time together?
1:08:22Oh, wow. Um, well, you got to marry someone better than you, which I did.
1:08:27Thank you. Thank you. That's Thank. And then you got to convince her to stay with you or him, whatever your preference might be. Finding a life partner who inspires you to be the best version of yourself and supports you to be that is, I think, critical. And if you can do that for each other, I I think that will because I think at the core of uh long-term marriages, I think real respect, right?
1:08:54It's love and real respect, but I think respect is super important and and and that comes from inspiring each other to be the best version of you can be.
1:09:04What's the best advice you've ever been given? You mentioned Mr. Steve Sloan and his father-in-law. His father-in-law is one of my closest friends. Um, and he once said to me, "You're never wrong to do the right thing, but the right thing is very often the hard thing."
1:09:19Yeah. I think the best advice I've gotten have really centered around sort of being around people like like I think um I think that Ronald Reagan has a quote that Tom Riley who was a CEO of Trigger told me wanted to do that there's no limit to what a person can do as long as you don't care who gets the credit and I have
1:09:48felt when I Early in my career, I was very focused on getting credit. I really like am I going to get credit? Is is this and been high have let go of that and focused on just doing what's right and not worrying about if I'm going to get credit. Uh that's actually been pretty freeing and I think that's made me a better teammate.
1:10:10I love that. I don't think there's a better way to end than on that. Your humility is astonishing. It's it's really just like one you're very calming. I almost feel like you should be like on headsp space or calm one and two it's just a wonderful humility that I rarely see in a venture investor.
1:10:29But thank you so much for doing this.
1:10:31You have too many successful people on your show. I try to lower the bar for you.
1:10:34I've so enjoyed this. Thank you for doing it. And it you see shows like this why it's so much better in person. You can't have this virtually. So thank you for doing it. Thank you, Harry. And thank you for And look, I have to say, um, my colleague Cla was coming with me and she said, uh, I watch Harry all the time. He has become my favorite show, especially the one you do with Rory and Jason. And this is, she said, uh, this is Trump the All-In podcast as my number one show. So, I have to say, you're
1:11:02getting fans all over the place.
