0:00
Today, uh I am honored to have my good friend Aileen Lee here and we're going to have a conversation about stuff.
Search this video
0:10
Um Yeah, well, I hope we talk about like Aileen is is is um a very public personality in the in the venture world.
0:22
So, there's lots of great talk she has given online and I hope not to do too much of that but she she tells a lot of amazing things.
0:28
So, it'll be hard to avoid but uh so this will just be the the latest version of of pearls of wisdom from Aileen but hopefully we'll try to push the conversation in other areas if we can.
0:38
So, um how about a welcome for Aileen Lee?
0:47
Welcome to Startup School. Thank you. I'm happy to be here.
0:50
So, um You they might not know that much about your kind of interesting and I would say idiosyncratic career that led you to being the founder of of of Cowboy Ventures.
1:05
Maybe we can just start with you giving a quick overview of your background.
1:07
I don't know from the gap to to now.
1:10
I mean, by the way, how long do we have?
1:14
And are we going to do Q&A or just We're definitely going to do a Q&A and um like your time schedule is actually the constraint cuz cuz the one of the reasons we're doing this at YC now instead of at Stanford is that like Stanford you're like constrained. We're not. This is our building.
1:32
So, usually we talk for 30 or 40 minutes and then do a Q&A. Whatever's natural.
1:37
So, um do you have a hard stop at a I can't remember but maybe. Probably. Okay. Uh okay. Hi everyone.
1:44
Thanks so much for spending time here. I'm really appreciative. Um Aileen uh let's see.
1:47
I am a first generation immigrant.
1:51
My parents are both from China.
1:52
So, I have a very like I grew up in a very traditional like our family had nothing.
1:58
We they saved up money to to buy a Chinese restaurant.
2:00
People in the family worked in the Chinese restaurant.
2:02
Like uh and uh I grew up in New Jersey.
2:07
So, you grew up with entrepreneurs. Kind of. Yeah, I mean, I yes.
2:09
I guess I mean, I think immigrants are entrepreneurs, right?
2:13
Cuz you come here with nothing and you have to figure out how to get a job and how to find a place to live and how to make it work and yeah, like I think there's a phrase uh at Kleiner Perkins used to say like an entre- definition of of an entrepreneur is like who does more than anyone thought possible with less any than anyone thought possible.
2:29
And I think that's probably true for entrepreneurs for immigrants as well.
2:30
I bet that resonates with a lot of people in the audience. Yeah.
2:35
Um and uh but I was fortunate that like my parents were very focused on education.
2:38
So, I wound up going to MIT, being in completely over my head.
2:43
Uh and then I did a stint banking for a couple years.
2:45
This is I guess the idiosyncrasy.
2:46
I lived in China for a year and taught English and studied Chinese.
2:50
I went to business school and at business school I was always really interested in brands and in particular consumer brands and how they generate a lot of organic customer love.
2:58
Uh and so I kind of and this is like kind of pre-internet.
3:01
So, I used to go to the the library and read Fast Company and Inc.
3:05
Magazine to try and find names of companies that were kind of up and coming and I would then look them up in the phone book Doesn't that just sound quaint now? I went to the library.
3:15
Like how many people here have gone to the library to like read magazines? Like yeah. Like five. Five.
3:21
Yeah, but that's how we did it back then.
3:22
Or you could you could look up and you could look up older magazines on something called microfiche. Um remember that?
3:28
Raise your hand if you know what microfiche is. Cool. A lot of you. Wow. Oh, cool.
3:32
Um and so I found a company called Odwalla and a company called The North Face and they were both out here.
3:38
And so I called like I would just call the phone number and just ask to talk to whoever would talk to me and I convinced them to hire me for the summer.
3:44
So, I did like two months at one and two months at the other.
3:46
They were both kind of private.
3:46
I guess that now they would be considered growth companies. Mhm.
3:49
Um and I did marketing and then after business school I went to Gap.
3:54
And uh you know, my my family was not that into me going to work for Gap.
3:57
You know, you would So, now this time trying to get a good education, maybe retail is not the place to go.
4:03
Uh but I felt really passionate about like I was have going to have the opportunity to work with really smart people and Gap at the time was such like a talent magnet in retail.
4:10
Uh like some I think the smartest planners and merchants and visual designers and uh working at the company and we were just kind of on fire.
4:18
Um and so I spent three years working different operating roles.
4:22
Like I worked on a supply chain projects trying to figure out where our stuff was.
4:25
It was called glass pipeline. Um and then I got a job.
4:27
I worked as chief of staff to the CEO for a year kind of just doing everything from helping prepare for public company board meetings to making sure that he had a good parking space when we went to go on store visits.
4:39
Um and uh and then my last job there was uh the online store in 1999.
4:46
And our online store was just we were gap.
4:49
com was the only thing we had.
4:51
We weren't sure if we were going to do oldnavy.
4:52
com cuz we weren't sure if this dot com thing was going to Yeah. Yeah, exactly.
4:57
I like you and I have been working for, you know, 20 something years since then.
5:00
We should have just bought Amazon stock and just like chilled. Yeah. You mean you didn't? No, I did Me neither.
5:06
Um and so I did suggest at one point that that while I was at Yahoo that we buy Amazon.
5:14
I went to uh and what happened?
5:15
Did they think that was a smart idea?
5:16
They No, they said they they said that you know, it would screw up our multiple. Yeah. Yes.
5:24
Um I worked with Friendster for a number of years. Yeah.
5:28
And there was this little startup called Facebook. Yeah.
5:31
And uh we were talking to them about maybe I think they wanted 20 million and we wanted to pay 15. Mhm. Yeah. Anyway. Yeah. Yeah. Stuff like that happens. stories. Yes, we do.
5:44
Um so anyway, I was I was at the I was helping run the dot com part of Gap in 1999.
5:49
And uh it was exciting but also just in not a pure play tech company.
5:55
And so much was happening in the dot com boom.
5:57
Uh so I just said, you know, I I think I should go work at a tech company.
6:00
And so I sent my resume to whoever would read it and I wound up getting an interview at this firm called Kleiner Perkins.
6:05
Um and they I think they thought it would be novel to hire a woman.
6:11
Like oh, we've never done that before. Let's try that. Um Your gender is what?
6:17
And uh and also that I had been chief of staff to the CEO I think was a kind of like a good kind of training to be an associate at a venture firm.
6:22
So, I wound up working for a partner there named John Doerr for four or five years and we just super hit it off and John is a legend in venture capital and we were working with like Google and Amazon and just think we had incredible relationships and and got to meet incredible people and I was also like the the dumping ground of every business plan that was sent to Kleiner Perkins at the time.
6:43
And so every night I would just take home duffel bags of printed business plans and read them.
6:49
Um and uh it was an amazing experience and I I it was like a two to three year job.
6:53
There often times at venture firms it's very opaque in terms of is like there is not really a career path.
6:57
Um and that was not a career path job but I I wound up staying 13 years.
7:01
But without a what But you stayed for 13 years but there was a gap in the middle where you went and became a CEO.
7:08
I always felt like I didn't have enough operating experience especially not I hadn't been a venture back CEO.
7:11
And I think, you know, um a lot of like this may be old school thinking but at Kleiner the thought was like, you know, it's really hard to give advice to a startup CEO if you haven't done it yourself.
7:23
Um and if you know, haven't run the functions, you haven't lived through the experience, you haven't really put yourself on the line.
7:29
Uh and so I saw an opportunity came up where a company that we had invested in and I was on the board of was had two co-founders and not neither of them was clearly the CEO and they asked me to come in and help.
7:38
And I was really excited to have the opportunity to work with them and to get some more operating experience.
7:43
So, I spent I took kind of two years off from Kleiner and I went and ran this company.
7:46
It was a digital media company.
7:47
It was like kind of an ad sales driven business um in the digital out of home space.
7:51
At the time there was a company in China called Focus Media that had like an eight or nine billion dollar market cap taking kind of what had been paper billboards and turning them into digital and running basically like kind of a content management system and kind of like an ad network for um for digital billboards.
8:05
And that's what we were trying to build at RMG. So, I went to be CEO.
8:08
At the time it was kind of it was I mean, it was a great experience and we we thought we had our model locked and loaded in '07.
8:13
So, we raised a 20 million dollar series B um which at the time in '07 was a big B. Wow.
8:19
Um and Now now it's like an A. Yeah, exactly. Now it's like a seed.
8:21
But um You joke but I have seen seeds that large, right? Yeah. All right. Thanks.
8:29
Um and then you know, '08 happened and uh we wound up having to lay off half of the company but then we also like because we had this nice we had a lot we we kind of anticipated winter was coming and we kept our powder dry.
8:38
So, we were able to live through it.
8:39
We wound up acquiring two of our closest competitors and then I replaced myself with like a better CEO and I went back to Kleiner.
8:47
So, it was it was a I was I felt really fortunate to get to do.
8:49
It was hard though, really hard.
8:50
So, do you feel that you were right and that that experience did help you give better advice to CEOs?
8:58
And what So, I I don't know.
9:00
It might be hard looking back now but what what did you learn as CEO that informs the advice you give now?
9:07
I had never um I guess many things.
9:09
One is I'm kind of a people person.
9:11
I love talking to people and I so I thought that would naturally translate into being a great manager.
9:16
And I had managed some people at Gap but not a ton.
9:19
Um but I think it's a very different being a CEO or a leader where people you have to first convince them to work there, you know, work at your company and I I turned out to be not as good at this as I thought.
9:29
But you have different reports.
9:31
Like you have a head of engineering, a head of marketing, a head of sales, a head of finance.
9:33
Like they often have different personalities and you want them to have different personalities.
9:38
And they have different strengths.
9:39
But that means they often have to be managed in different ways.
9:43
Like you have to communicate with them in different ways and kind of like figure out what is the style of communication and rhythm and like what's the what are the words that are going to help them do their best?
9:50
You have to modulate it by person.
9:52
At least that's what I found.
9:54
Um and I that had not been intuitive to me.
9:56
I thought you could be yourself and everything would I don't know if you've Yeah, no.
9:59
I I had a I had a mentor of mine who used to call that touch.
10:04
Um, and I I I think one of the things that's interesting as a startup founder like most of the folks in Startup School are struggling to find product market fit and they're thinking about that and they're thinking about that and at some
10:16
point they sometimes they lose track of the fact that really especially if for example they talk to an investor like you, you're evaluating that but you're also looking at this person and wondering could you hire a VP of marketing, a VP of sales, a VP of engineering? Can you
10:31
Can you can you attract the right people?
10:33
Can you do you have do you have what it takes to be a leader as a founder?
10:36
And I think people sometimes as you're struggling just to get a customer you lose track of actually what it takes to to really grow a company.
10:48
absolutely right which is and I'm sure we'll talk about that which is like what are investors thinking?
10:51
Like we're thinking both short-term and long-term when we talk to you.
10:54
Like we're thinking about whether you can accomplish the short-term but also what comes after that and what comes after that and whether you are demonstrating that you can parallel path in a way thinking about how the short-term is a setup for the long-term.
11:06
In fact the reality is the only thing that matters to investors is the future.
11:12
The present is only an indication of what the future may just look like cuz they're betting on your future. Yep, exactly.
11:18
Um, the other thing I'd say um I guess many things about being a startup CEO.
11:25
Like I had never hired sales people before.
11:26
Um, I didn't know how to create a compensation structure for sales people or you know and like how do you create like sometimes when you do the your comp you create unintended unintended consequences by how you compensate people.
11:39
Um, I found like I hired these you know different kinds of sometimes experienced people sometimes inexperienced people like you know what kind of how do you want to place bets on people who are unproven versus pay up for people who are somewhat proven but sometimes they come out of platforms where the platform was doing really well it's not really clear that the person was really good.
11:56
Um, so I learned a lot of lessons around that and also just in sales in general and I'm sure many of you who are trying to get product market fit experiences like sale like lead qualification is really important.
12:06
Like you yourself and your sales team can deceive yourself into thinking that you're making progress by having a lot of meetings.
12:13
Um, but the reality is a lot of those leads are never going to close.
12:18
And so figuring out like what like how should you spend your time and how do you qualify leads so that you're really spending time on the accounts that are a good fit for you and are actually closable in the time and the money that you have is something that I have learned the hard way.
12:31
Oh, that's a good I I I was thinking about that yesterday cuz I was talking to a founder who whose company was betting on a deal closing and and that deal just didn't close.
12:39
And we were talking about it and the problem was that they didn't really have that bad a problem.
12:47
Like the problem he was solving it was a problem and they were there was a few people who were kind of interested in solving it but it wasn't a real hard problem.
12:54
And those are the wrong customers to spend a lot of time with and if you don't figure that out early Yeah.
13:00
And even if you close them if it's not sustainable like then you just live kind of campaign to campaign or quarter to quarter and you can't like that your turn is going to be high, you're not going to be able to upsell the people.
13:10
So you kind of like like you were saying about short-term plus long-term like it's it's hard enough just to close them but you have to be able to like close that same person maybe with more money every quarter and if you think you're going to be able to close them but they're not going to come back sometimes it's not even worth closing them. Yeah.
13:23
So it's like all that stuff that I had never done before that I I learned the hard way.
13:27
Well, Tyler Bosman Bosmany from from Clever is coming to talk about sales next week.
13:32
So that's the perfect setup for that. Excellent.
13:37
So I think we should talk a lot about a lot more about what investors are are looking for but um but I I've been thinking you've talked a lot about that before uh and and said a lot of amazing things but I was thinking a little bit about from a startup founder's perspective how how they should look at investors and what they should look at.
14:02
And I was thinking about you and one of the things I thought was somewhat different about you was the level of empathy you bring to the the founders who come to you and the investors.
14:16
But I think it's different.
14:16
I think that it that there's a there's a a level of of of help you give which is not just you know, here's how you should think about sales but here's how you should you think about believing in your business.
14:29
Do you think about things that way?
14:30
Is that is that part of your calculus?
14:32
I I mean you you do so much more than just as an investor and you you're interested in in in a broad set of of of ways that the ecosystems put together and I think that all is part of the same picture.
14:46
I don't I don't know if I I don't know if it's I think it comes naturally hopefully and I mean my partner Ted who you know has was thinking about writing this blog post about making venture capital human.
14:58
And it's like when we were writing it it just fact that you have to think about that.
15:02
dumb to write that that we decided not to write it but um he cuz he's relatively new to our firm.
15:06
He's been at at Cowboy for a year and a half but he's been working with startups for 20 years and he said that that's one of the things that he noticed joining Cowboy is like that we are more maybe empathetic or more human than a lot of VCs that he knows but it just sounded so dumb to be like, hey come to us we're human.
15:21
Um uh that we didn't we didn't do it but And if you're saying the others are But um They're AIs masquerading as people investing in companies.
15:31
mean I think I'm a person who a lot of people may look at my resume or what I'm doing now and think like, wow she really has it together.
15:37
Like I have not had it together for much of my life.
15:42
Um, I have screwed up projects. I have failed at things.
15:44
I have been the person on the business school project who's a procrastinator and like doesn't show up with their homework done when everyone else is ready.
15:50
I'm the person I have been the person who's like slid into class like slightly hung over being like, hey Jeff do you have notes?
15:55
I did not read this case.
15:57
And the it would This is all public by the way.
16:02
Um There were yeah and so understood.
16:05
Um, like I believe people can change. I believe people evolve. I believe people learn.
16:10
Um, and you like you have to give people second chances and you have to like believe that they're going to get better over time.
16:18
Like I just think in general to be a venture investor you have to be an optimist.
16:23
But like also because like you know, I was a series A series B investor when I was at Kleiner and I moved to seed and so kind of by definition deciding to go earlier means you want to live with people and situations that are more raw.
16:35
Um, and that less is baked, less is figured out and that you're not trying to poke holes in what could go wrong but you're trying to work with the people and figure out what what do we need to go right.
16:45
Um, and that's like just what we what we do, right?
16:49
When working with you know, folks prior to product market fit or you know, half the time at Cowboy we the people haven't built a product yet and half the time they have.
17:00
So kind of by definition it's what we choose to do.
17:02
Um, but it's it's also just I feel like I'm a product of people who believed in me.
17:08
Like you know, John Doerr and the people at Kleiner changed my life when they hired me. I was the first woman. I was the youngest.
17:13
I did not I was never a working engineer.
17:15
I wasn't working at a venture-backed startup.
17:17
I was a completely non-traditional hire.
17:18
And I wouldn't be sitting here if people hadn't made a bet on me as a non-traditional hire.
17:24
It's interesting when I when I think about John the first word that that pops in my head and it might you know, I'm way better than me so it might be different is thoughtful.
17:34
And I was thinking of like what what are the characteristics of the great investors I know and thoughtful and empathetic like like those like and you don't often hear those.
17:43
You think about people who are like who get your product, who are familiar with familiar with sales or invested in similar companies and like your your domain but but if you think about it the people who I think if we look at the industry who are the best at it have those qualities and not just the cold hard qualities that that make for like you know, investing magic.
18:04
I you know, I I don't know if I totally agree.
18:07
Like I think um John and I used to do this presentation called like there are mercenaries and missionaries. Yeah.
18:15
And that one doesn't always win.
18:17
Like you can win if you're a mercenary and you can win as a missionary.
18:19
You just have to choose what you want to be.
18:23
Um, and I think that there are plenty of people in tech who are pretty mercenary.
18:26
Like they're pretty cold. They're very driven.
18:28
Um they just care about results and they push and they push and they're super aggressive and you can win doing I mean I think I'm guessing in your head you're thinking about brands of companies in your mind that seem like missionary companies or mercenary companies, right?
18:42
And there are successful companies that are more mercenary than missionary.
18:45
So I don't think it's completely there are people who we know who are not warm and you know, don't ask you you know how you know, how your spouse is doing or your sick mom or you know, or and but and those people can be successful.
19:01
It's just you have to choose who you want to be.
19:03
Yeah, maybe there's a connection between them which is you should we always tell this to founders is you should look for investor who's going to be most helpful to you.
19:16
And um sometimes having your butt kicked is what you need and sometimes having someone you know, understand and understand what you're going through and help you still believe in your future is what you need um and I guess it depends really is the answer. Yeah.
19:38
And you can have both I think.
19:38
Like you can That's what you should look for. Yeah.
19:41
I think we you know, we all we have a saying at Cowboy we're always happy never satisfied.
19:47
Uh, and so it's a you know, we're We're grateful and we we're like positive and optimistic, but you can always do better.
19:56
So, fundraising is premature for some of these folks, but even if it's premature, if you're a startup, you're moving fast and it'll happen.
20:07
It'll It'll become relevant soon.
20:10
For For folks who are just in the middle, as as I was saying, battling for customers and to figure out what their their their as we say at YC, you know, talking to customers and writing code and talking to customers and writing code and trying to to trying to find something that works and solve real problems, how should they start to think about fundraising?
20:31
How do you How do you think about that?
20:32
Like, what's What are your first steps as you as you approach that stage?
20:36
So, I think something that like we have talked about here at YC, uh and it's funny cuz it's a relatively new thing to talk about.
20:43
I think it's always been there, but now we have an articulation of it, which is storytelling.
20:49
Um you know, some people are naturally natural storytellers and some are not.
20:51
I think regardless of whether you are a natural storyteller or not, it's really helpful to become one for fundraising.
21:00
Uh there are, you know, people want to be emotionally engaged in your story and the journey of your company and like and and the arc and to feel like your company is on an upward arc.
21:13
Um and so, how you lay out kind of how you came up with the idea, um you know, what work you did to figure out whether there was a there there to validate or de-risk some of the initial um potential issues with your company, like I don't know how you've hustled.
21:29
Like, in a way, it's like a a rags you're like you're engaging someone on the beginning steps of a rags-to-riches story.
21:35
Um and like what showing people what you figured out and like what challenges you faced, but and where you see it going uh is part of how cuz that's a storytelling is something you need to woo people who can get paid much more working at Google or Facebook. Right?
21:51
It's how you recruit talent.
21:51
It's how you convince customers to take a bet on you when you don't have a lot of other customers. Right?
21:57
It's how you convince people to pay like move from to the paid like to the paid version from the free version.
22:03
Um you know, it's how you raise money.
22:04
And so, it's a skill that uh that you can use in pretty much everything that you do.
22:10
Um and it just takes practice.
22:10
Like, I think there are plenty of people Like, I used to be super nervous speaking on stage.
22:16
And for the first couple years that I worked in venture, when I got invited to anything to speak, I said no cuz I was too scared.
22:22
Um You just have to do it a lot.
22:24
And so, practicing your pitch, getting feedbacks from friendlies, like we call them like off-off-Broadways, you know, like you probably don't want to give your pitch for the first time to that partner that you know at Sequoia.
22:36
You know, you want to practice it.
22:36
Uh you know, and you Practice it on your mom. Yeah.
22:40
On your co- with your co-founders, with other people who've raised money, and practice taking questions from them.
22:47
Um way before you have to start fundraising.
22:48
Like, you don't want to you know, if you have to start fundraising in December, you don't want to start your pitch in December. Right?
22:54
You want to start your pitch over the summer and practice it and get lots of feedback.
23:00
And I mean, YC is great at at uh providing that kind of feedback as well.
23:04
Yeah, I I I don't think you can stress enough that aspect of um practicing your pitch in a in a way that you take feedback and learn and iterate.
23:14
It's It's almost like um It's like writing code and talking to customers.
23:19
Like, your customers, anyone who will listen to your pitch.
23:21
And writing code is going back and modifying that pitch because it probably won't work the first time you do it.
23:27
They might not You might even ask them, "Did you even get it?"
23:29
at the end and they'll say, "I have no idea what you're talking about."
23:32
So, that aspect of practicing and and perfecting the pitch is critical, right? I think so.
23:41
How else to think about fundraising?
23:43
Um I mean, Jeff mentioned it before that um you know, when you have a milestone that's right in front of you like, "I want to raise my seed or I want to raise my A."
23:52
You're very focused on that.
23:52
But like Jeff mentioned, the people who have especially if you're going to go for institutionally backed dollars, whether it's a seed fund or a larger venture firm, like when we take money from professional investors, we have to basically guarantee We're kind of to be a top quartile fund, we have to deliver a certain kind of return.
24:12
Um top quartile return returns um for more recent ventures let vintages or let's say four a 4x return. Right?
24:17
So, if someone has a $100 million fund, they have to figure out how to generate $400 million to be like to be able to raise money in the future.
24:26
And so, that $400 million is going to be a combination, let's say of 30 different companies, two to four of which are going to wind up being great and the rest of which are going to wind up not being so great.
24:37
And so, to kind of balance out the averages, the two to four that have to be great have to be really great.
24:43
Like, they have to be worth a billion dollars or more.
24:46
Um especially when you move to A.
24:46
Like, for a seed fund, if we are able to get the right owner like you know, our first fund was $40 million.
24:53
So, if we own 10% at exit of a $400 million company, we could return our fund.
24:57
Um but those kinds of like that kind of aperture for an exit really stops at seed.
25:02
Like, once you raise A, the people need the exits to be much bigger cuz those people all have $500 $800 funds.
25:08
Um so, they need to own 10% of an $8 billion company to be able to return the fund.
25:16
And so, and the data shows historically that most funds don't wind up having 50% of the companies all be $400 million exits.
25:26
They're They have two to three be multi-billion and a bunch of zeros or near zeros.
25:31
And so, they're looking at you thinking, "Is this one of the bullets I'm going to fire this year to be one of those companies that's going to be my outsized winner?"
25:41
They're not thinking, "Can I get this to 200 million or 300 million?"
25:42
They're thinking, "Can this founder turn this into a multi-billion dollar company?"
25:48
And so, the short-term execution and story has to be right, but sorry.
25:51
Um for institutional folks, that's what's going on in their minds.
25:56
Yeah, it It seems that a lot of founders um go into the process not understanding like if all those numbers that that Aileen was just talking about sort of you're you're sort of like, "Whatever, whatever."
26:10
It's actually vital that you understand venture capitalist math so that you understand what the motivations of the person sitting across the table from you are and why they're asking, "How big is your business going to be?"
26:22
and why they care and why although you might be thrilled to have a 30 or 40 million dollar exit, might sound pretty good, right?
26:30
You own 50% of a 30 million That's fantastic.
26:33
For a venture capitalist, that's like a failure.
26:36
And it's important to It's important to do their math cuz if you want them to give you money, you better understand their math.
26:42
And I think I mean, it's not the answer for everyone, right?
26:44
Like, a lot of people can be successful and get to a $40 million exit with a party round of angels.
26:49
Um and that has happened.
26:49
Now, I think the downside and I guess I'm a little biased is a lot of times just having angels and not having anyone who's a professional investor, like they may not give you the guidance that you need on how to scale your company, on what's going on in the market, on you know, what could be going wrong or right cuz they're you know, they're not professionals.
27:08
They are high net worth individuals who are going to write you a check and say, "Keep me posted." and move on.
27:14
So, I think you know, I sometimes you have to do what you have to do.
27:19
Um but that's like You always have to do what you do. Yeah, exactly. Yes, exactly.
27:23
But you know, ideally you have choices, right?
27:26
And and a lot of what I think as you think about sequencing your fundraising and building your team is like basically like can trying to continually put yourself in a position where you have good choices. Right.
27:36
And certainly if that's the only round you ever raise, which by the way is philosophically how you should think about it, but if you do want to continue to be a fast-growth company and raise a series A and series B, having institutionals who can help you find the partners for the next round is pretty important.
27:56
Uh one of the things that that also occurs to me that people don't often talk about when it comes to fundraising is a lot of founders forget that that that you have to do all these things yourself.
28:08
Like, when you started Cowboy, you had to raise money.
28:12
You had to go to the professional investors and tell your story. What Like, how was that?
28:18
It was you know, it's humbling. Fundraising is humbling.
28:19
So, uh cuz especially when I started Cowboy, it was just me.
28:25
Uh and so, basically, you know, any meeting that I had, it was clearly a verdict on whether they believed in me or not.
28:31
Um now, it's good that I went through that because it always it and any Everybody who fundraises is going to get some no's.
28:37
Like, eventually someone's going to say no to you even if you're like the hottest company ever.
28:40
Like, some people are going to pass.
28:42
And but that gives me a little extra motivation to make them really sorry.
28:50
Like, I want them to really regret not investing in Cowboy Ventures. Um so, it's good. Yeah.
28:59
Um Yeah, I I think that uh not enough investors go through that experience.
29:07
I think part of the problem is is that at some point, if you've been there for a while, you get these funds that just invest in you again and again.
29:14
You don't have to suffer the way a startup founder has to suffer.
29:17
And I say suffer because it's very unusual when you raise money not to get no's. Right?
29:24
Like, you should get used to like And also just like all the things you said like when when I was raising the fund for the first time, I got a lot of smiles and a lot of like, "This is great. This is great.
29:33
I'm totally going to follow up.
29:34
Send me a link to the data room."
29:36
And then I would know they were not checking the data room.
29:38
And when I would check in with them, they're like, "This is great.
29:41
Investment partner's going to love this."
29:42
And then they would come back and say they would either ghost me or they would come back and say, "I'm so sorry.
29:47
I super thought we were going to get this through, but we didn't."
29:50
And I just wish those people had not wasted my time.
29:54
And so it does give us a lot of empathy and me a lot of empathy for like following up.
29:57
You know, if you send me your business plan or we have a conversation, I try we try really hard to get back to you and tell you if it's not a fit for us now, why.
30:04
And not just smile and kind of like GFU.
30:06
So so that you know, because a lot of people need the feedback. right?
30:13
Well, you know, a lot of VCs I think are afraid of telling you why they're really passing because they're you know, if you do well, they want to be able to call you later and pretend that like they were just really busy when they passed or you know, and They're your best friend.
30:28
want you to feel like how I just said about like making you really sorry about not investing.
30:32
They don't want to be that person.
30:33
So they don't tell you why they're really passing, which doesn't really help you.
30:38
So and I also think again in fundraising getting back to what we talked about lead qualification.
30:43
So when I I did my first fundraise, I was I had gotten some advice from some other folks who were really helpful like Steve Anderson and Mike Maples and um and people who had Michael Dearing who had had raised funds as a solo general partner before me and they said original super angels, right?
31:01
They they said like look, you know, certain types of investors are going to smile and it's their job to learn about what you're doing.
31:07
And so they'll meet with you over and over again.
31:09
They're they're not going to they're not going to come into your first fund.
31:11
They're too conservative. So be careful.
31:13
And so I decided to create a process or I tried to create a process where I phone screened everybody before I met with them.
31:19
And if they hadn't invested in a seed fund before and if they didn't know who First Round was or Harrison Metal and didn't have a feeling like I had missed that or I have now kind of I've got a budget to make sure I don't miss the next wave of seed funds, then I just I said it'd be great to keep in touch, but let's not meet. Let's not meet.
31:35
And so that it kind of made the sales process a little bit more efficient.
31:40
Trying to really qualify leads before spending time with them.
31:42
So I've never asked you this, but did you find that um that being a female and trying to raise from LPs for a venture fund um colored the process in some way?
31:57
Did Did you feel look Did you feel that you were treated differently?
32:05
Yes, and sometimes it worked out and sometimes it didn't.
32:07
So I'm sure it's just we know there are lots of studies that show that women and men have more confidence in men. Right?
32:16
Like a woman can say the exact same thing as a man and it will not come come across and give the same impression as a man does.
32:23
And so I could give a great pitch and people would Some people probably came away as thinking like, I just don't know if she's enough of a killer. Right. Um I don't know. Like she has kids.
32:32
What if she wakes up one day and decides she wants to spend time with them?
32:37
Like You know, who knows what they say.
32:41
But um Probably all those things.
32:45
And you know, it would be really great if people said that about men, too.
32:46
I'm not I don't think we're going to hold our breath.
32:50
But um you know, I think it just you know, we are we are all unfortunately biased and I'm glad an asymmetry that's built into the genders because we are different or is it something that we can overcome? we can work on it.
33:03
Um like there's a study I think it's like a Penn MIT study where um there was a PowerPoint deck and a voiceover talk track and they showed it to I think hundreds or thousands of business school students and they gave the business school students like, you know, you have $100 or $1,000 to invest in this company. How much do you give it?
33:24
And they had in the different classes they AB tested.
33:26
They had showed the slides on the screen and they had a a woman um speaking that like doing the voiceover or a man.
33:33
The man raised 2x the woman. Same script.
33:40
So we have to I mean, we have to believe that this is changeable.
33:42
We have to address it at every stage of a person's life, whether you're in elementary school or junior high or adulthood um to try and catch ourselves on our biases and and Yeah, the thing that gave me the thing that gave me pause there was you said it's true for women Yeah. and men.
34:01
and men the female and male students both gave the man more money. So we got to work on it.
34:07
But yeah, so I'm sure there were people who just you know, and and meanwhile at the same time there were a bunch of really bro-y guys with not as good track records and probably more um like polarizing reference checks who raised money really fast because people are like, "He's such a good guy. I love that guy.
34:26
He goes out all the time.
34:26
Like everyone's going to want to hang out with him and give him deal flow because he's such a great guy."
34:33
And like some of those guys don't work on our business anymore cuz it turns out that they're not really ethical guys and they don't treat people professionally, but they raised a lot of money.
34:41
Um but I think the great thing about our environment right now is we talk about it.
34:45
You know, 5 or 10 years ago we did not we just pretended this stuff was not happening.
34:51
And You were kind of unique when you started.
34:53
There were so few women in the industry when you started it.
34:54
And I was kind of taught like for as much as I love my former colleagues like it was very clear I should never talk about being a woman.
35:02
And I I mean like that was just because the the scolds at the time was like, you know, keep your head down.
35:07
Don't don't cause problems cuz then no one will want to hang out with you. Yeah.
35:13
And we shouldn't do that to people.
35:14
And I know you've been active in thinking about about inclusion not just not not just across gender lines, but diversity as well. You started All Raise. org.
35:26
Maybe you can give a quick pitch for that as long as we're here. Sure.
35:28
So All Raise is a nonprofit to try and accelerate success for women in the tech ecosystem.
35:32
So founders, employees, venture investors.
35:35
But we hope it will create a rising tide for all kinds of people who are different, not just women.
35:40
Um we're just starting out to focus on women. So allraise. org is the website.
35:43
We started lots of things.
35:46
We're we're like a little startup.
35:46
We're a nonprofit startup that's all volunteer driven right now.
35:51
If you have heard of something called Founders for Change.
35:52
Has anyone heard of Founders for Change?
35:54
Raise your hand if you've heard of Founders for Change.
35:55
So if you are a founder, you can go to foundersforchange.
35:58
org and you can sign up to be a founder for change, which basically says you're going to publicly make a commitment to inclusion and diversity um on your team, on you know, when when you have choices on your team, on your board and on your cap table.
36:09
And you know, it's not binding.
36:13
You don't have to sign sign anything, but you're just up and saying, "I care about this."
36:17
And standing up and saying, "I care about this."
36:18
is going to say something to the people who you're potentially going to recruit um and to the culture that you're going to build, which I think will make your company stronger.
36:27
Um we do office hours for female founders and we have a matching service to try and help women who and people of color who want to get into the venture business to kind of help get them trained and then also match them with firms who are looking to add more diversity to their teams.
36:41
So we have like a lot of cool products.
36:42
Yeah, the cool thing about entrepreneurship is you create seeds. Yeah.
36:47
And so like entire communities can change because someone someone starts a company and shows that it's possible.
36:53
We're talking about belief and how important belief is and you you can inject we hope and believe belief into a community anywhere, right? Anywhere in the world.
37:02
That's the cool thing about Startup School is a thousands of companies from around the world that can they can change the world. That is amazing.
37:08
So um before we go to Q&A, you've I'll put you on the spot a little bit.
37:13
Hopefully you can remember how you did this, but you tell like you give a really great description of what the components of a pitch should be and I want to I want to like that and you're you're really good at that and and that's a really concrete thing that we talked about telling stories, but it's not just any story.
37:34
It's a story that has components that matter because because as we talked about venture math, there's there's there's there's a math component.
37:42
There's a results component.
37:44
So maybe maybe um you can help these folks by talking a little bit about that.
37:47
If I don't do a good job with this, hopefully if there is a talk, you can just rewatch it.
37:50
Um so I do think that there are like some fundament like fundamental elements that should be in generally all pitches.
37:56
So I I do like it when people start out with the team slide and they talk about who they are and why they started the company and ideally why you have certain background or certain things that you've done that make you the right founders or the right people to be solving this problem.
38:12
Then you talk about the problem.
38:13
Um you know, why is it a problem?
38:15
And then you talk about how big it is.
38:17
And investors are usually looking for problems that are billions of dollars.
38:20
So if the And then you know, and not just the overall market, the addressable market.
38:24
So you know, if you know, if a market in real estate is you know, 5 billion dollars, but you can only get 10% of the market, your addressable market is only 500 million and that's often too small for venture investors.
38:37
So they really want your addressable market to be at least let's say 5 or 10 billion because they want to know that if you are really successful and you get 10% of the market, that you could be making at least hundreds of millions of dollars.
38:49
Um so then you talk about your product or your solution, right?
38:50
Which is like this is you know, this is what we built to solve the problem. Here's how it works.
38:55
And ideally you talk a little bit about what's special about it.
38:58
What's your unique insight?
38:59
What's the technology you developed that's that makes it so different?
39:03
And often times it has to be like a 10x difference.
39:05
Like a 1 to 2x difference is not enough.
39:10
Cuz it's hard to get people to try new things and so there has to be a real significant benefit to get someone to switch from what they're doing to try something new.
39:17
Um Then you might talk about the competitive landscape.
39:21
And there people are looking for your your honesty and your transparency.
39:24
Um you know, some founders tend to hand wave competition.
39:29
Like, "Oh, they all suck and they're all stupid."
39:30
Like that's you know, that doesn't show that you're going to be necessary like honest about what's going on and that there are or people who are already out there doing what you're doing or have like that other people currently use or that other people have certain features that you don't have yet.
39:47
Um because investors and board members don't want to have to haircut what you're saying when you're talking about how the business is going.
39:52
They want to know that you guys that you can be honest and transparent with each other about the reality of what's happening.
39:59
Um then you might have a financial plan and talk about and often times like a three-year plan is a good thing.
40:02
It doesn't have to be by month but kind of like maybe what you're going to get done by month in the next 12 months and then what the annual revenue revenues or what the P&L looks like.
40:10
And what investors are looking for is both the top line in terms of the revenue numbers and the revenue growth, the margins of the business, um the costs that go into the business and both the gross margin and also like how much you're planning on spending on marketing, how much of the money is going to go to technology development and people versus buying ads, things like that.
40:27
And then how much cash you're planning on consuming over the next three years.
40:30
Um that's pretty much it. Does that help? Yeah, that's awesome.
40:35
Um I was going to say in the financial plan some of that depends on how far along you are, how evolved you are.
40:40
You might have a CAC and you might not.
40:43
But you ought to have some idea how you're going to make money.
40:48
Like you ought to be able to describe why it's a business as opposed to some service that people might want but might not pay for.
40:57
And then and often I think it's good to have like a summary slide.
41:00
Like you know, if you've ever taken public speaking or a presentation class, they'll tell you like I'm going to tell you what I'm going to tell you and then I'm going to tell you and then I'm going to tell you what I told you.
41:10
Um so come sometimes this slide deck can be that too where you start out with a summary slide like you know, here's here are the highlights of what we do and then you go into the whole thing and then you say and again here are the highlights.
41:20
So um before we take Q&A there's I'm sure you're so sick of talking about unicorns and that I would like to have some. Besides having them.
41:32
So so so Aileen is famous because or infamous I don't know for inventing the term unicorn and I just had like I had a question. Why unicorn?
41:44
Why not like dragon or like Why is it an animal?
41:48
Why isn't it like a diamond or where did that come from?
41:50
Um Mike Maples from Floodgate of any of you ever He's he's such a good He's like king storyteller and he used to call big like you know, big winner companies thunder dragons which is super perfect cuz he's So dragon was taken. Right.
42:04
Thunder dragon was taken.
42:08
Um So I wrote I wrote the analysis.
42:08
So basically I had this new fund and I was you know, the the lore had been it's you know, out of 30 companies you wind up having two winners and and a bunch of not so great companies and so I'd asked LPs for the data.
42:21
Cuz I was just trying to figure out like is that really true and if I could basically aggregate the data of other people's funds to understand what what had what was the composition of their winners?
42:34
You know, where did the founders come from?
42:36
How did they know each other?
42:36
What birth order were they?
42:40
All these questions of you know, if you have a clean you have a clean dance card and there's a gazillion seed stage companies out there, are there any things that the most successful companies in the past decade have had in common that I should know to be looking for?
42:53
And I could not I had a such a hard time collecting the data.
42:55
So I wind up just starting a spreadsheet and making a list of companies that had been born within the past 10 years that were worth over a billion dollars and I just started like making a list of where they went to college, how many co-founders there were, when they were born, how like you know, so therefore how old were they when they founded the company?
43:13
Had they worked in tech before?
43:14
Like it just had a thousand columns.
43:19
Um and how much you know, to the extent that I could learn how much they raised at the A, at the B, what was the time period between the rounds, like all the things to see what they had in common.
43:28
And so I kind of wrote up my and I there were a bunch of things that I think were a little bit contrarian at the time.
43:34
Like most the most successful founders of the prior decade were in their 30s when they started.
43:41
And you know, the the conventional wisdom was like you have to drop out of college and start when you're 20.
43:44
And I had been meeting with founders who were kind of apologetic when we met.
43:47
They're like I'm so sorry I'm 32. I know I'm really old.
43:51
And I was like no, don't don't apologize. It's actually it's good.
43:56
Like you have work experience that's actually important.
43:58
Um which is interesting because if you look at the earlier stage like the first stages of venture everyone well everyone was starting enterprise companies and they were like to start an enterprise companies you need to know something about enterprises and they were all in their 30s, 40s and 50s. Exactly.
44:15
Yeah, and that was one of the differences in the analysis was that consumer founders tended to be younger than enterprise founders when they founded the companies cuz yeah, exactly what you said.
44:22
So so there were a bunch of things in the analysis like like the vast majority of companies had co-founders and there's a reason why.
44:29
Like being a solo founder is hard. Really hard.
44:30
Um Being a co-founder is really hard. Yeah, exactly.
44:33
And also there were people who had had contacts.
44:34
Like they had lived together or worked together or gone to college.
44:38
So it was like very rare that you that you meet a co-founder on a blind date and that that I mean this whole data set of 39 companies originally they're all outliers.
44:46
So it's not like it's there's no statistical significance.
44:50
So these are all just examples or stories of kind of the making of but I thought that there were some useful things.
44:56
So I wrote this analysis up of like what are the things I've learned from this analysis and then I was yeah, I had this phrase of like you know, public or private companies less than 10 years old that have become worth over a billion dollars that I had written over and over again in the piece and it was just so hard hard to read.
45:11
So I was like I got to come up with a shorter word. Is it home run? Is it mega hit?
45:17
Is like what and they it just all sounded so lame. Not so catchy.
45:21
Not so and then I I put in unicorn and it made it so much easier to read. into your head.
45:26
Yeah, well I I was thinking like you know, the thing is it it is almost like alchemy.
45:32
Like you could do all the right things and have the right background and try super hard for 10 years and this could and it might not happen for you.
45:36
Uh because it just it really is quite rare.
45:41
Out of thousands of thousands of companies being born every year and getting funding only 39 at the time.
45:48
Um and still even now if the number is 100 or 120 whatever the number is, it's still like out of all the companies that are born every year a very very small fraction.
45:55
So the idea was kind of like it is like magic.
45:58
Um and also I wanted it to feel um special and magical not kind of laboratory clinical.
46:07
Somehow it just and it immediately caught on and I know it's weird. It's it's weird.
46:13
it's one of those memes that just took off. Yeah. So thank you. Oh, thank you. Questions. Yes. Thank you so much.
46:28
So inside the seed round what is a healthy distribution of funds for operations, product dev, marketing?
46:37
So what's the distribution of funds proper distribution of funds during a from a seed round? What kind of a company?
46:46
Uh AI-powered fashion garment development technology.
46:51
Um if it's AI-powered it's mostly probably going to be team and technology, right?
46:55
You're probably not going to have probably not going to want to spend a lot of money on customer acquisition, right?
47:02
You're going to want to build something where the tech is so unique and so attractive that you don't have to spend money to acquire customers.
47:07
So I would think that it's largely going to be team. Probably, yeah. Yeah.
47:14
Yeah, the question distribution of funds is hard because as you saw from Aileen's answer it depends so much on what kind of company.
47:24
Most most software companies spend almost all their funds on people. Yep.
47:29
Um hardware companies a little bit different. Yep. Yeah, back there. Thanks. Hi, I'm Nima. Thanks for your talk.
47:35
I really appreciate what you said about being a non-traditional hire.
47:37
How do you look at non-traditional founders and what do they need to do to show you if they're coming from a different background that they can actually do what it takes to get you that return you're looking Yeah.
47:48
So how do you look at non-traditional founders and how do they go about showing you that they they too can be um founders of unicorns I guess.
47:54
I I I added that last part but I think that's what he meant. Yeah.
47:58
I mean I think like what we were talking before about the story and how you explain like you know, how you came across the problem that you're trying to solve, what your personal passion is for it and what you figured out.
48:07
Like a lot at seed um there's not a lot of data, right?
48:10
A lot You haven't maybe shipped your product, you don't have customers, there's no cohorts.
48:14
But um what you can talk about is your hustle, right? Your insight.
48:20
When you've hit roadblocks, what you figured like what was your work around and what you figured out.
48:23
Like that's really what a lot of seed stage investors are looking at is you know, do you have that grit um and like the right skill set to figure out and succeed in the space.
48:35
I mean I think it's a better time than ever to be a non-traditional founder.
48:39
I I have a friend Ali Rosenthal who's raising a fund right now and her focus is going to be non-obvious founders.
48:45
Uh you know, it's it's like this was not a thing a decade ago but now I think both we realize that you know, investors are probably just been hunting in too much of the same pool over and over again.
48:58
Companies don't need to be based in the Bay Area anymore.
49:00
Richard Kirby did a great analysis showing that like the diversity of venture is a huge problem not just in terms of gender and race but the majority of people who work in venture went to Stanford and Harvard.
49:12
There's just no way that that's the right answer. Right.
49:15
Um you know, it just opportunity. Yes, tons.
49:18
And so I think it's a great time to be a non-traditional founder. Great. Um over here.
49:25
Um we've we're very fortunate to meet a lot of VCs and we often go with gut feeling on how the relationship But would you have any advice on how to choose them in a more rational way? Mhm.
49:38
So how did if you meet lots of VCs, how do you choose them less based on just gut intuition and more on some sort of rational basis?
49:48
So I would recommend on both we do reference checks on both sides.
49:51
Like when we're thinking about investing in a company, we try and do reference checks.
49:56
Not so much like criminal background checks, but more understanding you, where you've worked before, what your strengths are, who how you need to be complemented, what you've experienced.
50:04
And the same thing founders should feel comfortable if you you know, when you have choices, it's a it's hard it's very hard to get divorced from your investors.
50:14
And so you should reference check investors.
50:16
Like we just made a investment in company in the last YC batch and they did a lot of reference checks on us.
50:24
Let's say you're raising your pre-seed round of 250k.
50:28
What should be the the cap?
50:28
I've heard usually around $5 million and you're so early that no matter what you say probably doesn't make sense.
50:35
And the second part is that is it okay to have different caps for different people because they're bringing different value, right?
50:41
So the question is has to do with raising on a convertible with a cap.
50:47
If you raise 250,000, how should you think about what your cap should be and can you vary that cap across different investors? Yeah.
50:56
I think the cap question has a lot to do with the market, right?
50:58
And what choices you have.
51:00
So you know, I wouldn't take the first offer that you have.
51:02
And it also has to do with dilution, right?
51:06
Thinking about what dilution you're willing to live with knowing that this is probably going to be not going to be the only dilution you're going to see. Right?
51:11
And so you you A good rule of thumb is generally you have to imagine that in every round like your seed round, your A round, and then it's decreasing at B and C.
51:22
You're probably going to sell between 20 and 30% of your company over time.
51:25
So you think about like how much money realistically you may have to raise over how many rounds looking at companies in your space, how many rounds.
51:33
Like most people think that they should only have to raise through B and then they wind up raising through F.
51:40
It just happens that way for some reason.
51:42
And so you think about you know, you want to you want to get the capital and not have to spend too much time fundraising, but also you don't want to experience too much dilution. Different caps?
51:53
Oh um My personal opinion is that different caps is a really bad idea.
52:00
If there's a gap if there's a a time gap between when you raise, that's all right, but otherwise all you're likely to do is to have a bunch of pissed off investors, which as Aileen says, you're going to live with for a long time and that's never a healthy relationship.
52:13
You are really getting married to your to your investors.
52:18
You're creating a long-term relationship.
52:19
So it seldom starts on a a positive foot to find out that the person you talked to 15 minutes before got a better deal than you did. Yeah. You?
52:34
Thanks a lot for the session today.
52:34
I mean you you mentioned that you used to call the VCs and the firms when you were early on, but today I think it's all about getting the reference, right reference.
52:42
Um And at times you know, VCs sorry, entrepreneurs who came out of not from they're not from US or they're from outside this area, they don't have right reference.
52:50
So what is your recommendation for them to reach out to the VCs?
52:55
How do you reach out to VCs?
52:55
What's the recommendation or get a warm intro if you're not from from the from the area and you don't or you're not from Stanford or Harvard, right? Um I think it's both.
53:10
Uh You know, I think a lot of especially seed firms take cold intros all the time.
53:16
Uh we take cold inbounds all the time and a lot of it depends on what you say in the email about what the market is that you're going after, what you figured out so far.
53:25
We meet with people all the time that just emailed us.
53:30
traditional VC was you had you just received a whole bunch of business plans. No one knew the VCs.
53:33
They were sitting off on Sand Hill Road and no one knew them.
53:37
And they got business plans. So it still exists.
53:39
So but I do think it's helpful cuz I think it's a you know, figuring out how to get a warm intro in some ways I think is a test of your hustle and your ability to network and build relationships when you especially are from the outside.
53:51
So I think that's one of the reasons why people use it as a filter.
53:53
It's like you know, if you're not good at figuring out how to like start from you know, a a cold like a stop and then like to get some momentum, then you know, maybe you're not going to be a great entrepreneur. So I would try both.
54:05
Yeah, I think one one thing to think about is that like it's a pretty small world here. Everyone knows everyone.
54:14
So all you got to do like to find someone who's connected to Aileen like like elbow three people and you'll find somebody.
54:20
So it's it's not as hard as you might think.
54:22
Maybe someone from Okay, you're right here.
54:30
I have a question about a recent study that came out of Forbes and PitchBook where they found that women founders' companies were being valued at 84% less than men's founders.
54:41
And do you have any thoughts about that and why that is?
54:46
So the question is on a study that found that women that companies founded by women are valued 84% less than I guess male founders.
54:57
I'm not sure if they they they normalized over industries. Yeah.
55:02
So I haven't read that study.
55:02
I uh I mean I think a lot of the studies If you look at the unicorn list right now, right?
55:11
There's only like two female founders in the whole list, right?
55:13
So if you're doing an average across venture, yes, of course like those companies are the vast majority of the kind of paper wealth that's been driven in the past decade in the industry.
55:22
And if there's no female co-founders or you know, that that own the equity of or and these are the most valuable companies in our industry, then yeah, it's um uh that would make sense.
55:32
And I think it even if you just if you looked at it like kind of apples to apples across seed, my guess is the analysis will find that um and partially for some of the reasons that we talk about that women founded companies tend to be underestimated by investors.
55:49
Um partially due to bias.
55:52
Um but women also can I think we can you know, we can work on it on the investor side to try and take away some of the bias and then we can also work on on the founder side um kind of helping and coaching women on how to tell stories and how to pitch.
56:05
Like I'm fortunate to have worked with some women who have raised a lot of money at very healthy valuations um and uh in very competitive situations where there've been multiple bidders and the price like you know, the multiples relative to revenue or run rate or like you know, what they figured out have been you know, quite high.
56:22
Um a lot of times it comes to the story like what both what the founders have figured out and how they tell the story.
56:31
So I'm sorry, we were going to take one more question because time is flown. Um in the back.
56:55
So the question is when you're analyzing the factors that went into the various characteristics of unicorns, were there any factors that surprised you?
57:06
Was it that surprised that were surprising that actually mattered?
57:10
Or that did matter which factors did not matter that was that were surprising?
57:15
a good question actually.
57:15
I don't know if I have a good quick answer for you on that one just cuz I focused so much on like where there was signal.
57:19
I don't even know if I remember the things that had didn't have signal.
57:22
Okay, we'll take one more question then. Right there. Yeah. Okay, great.
57:32
So I actually have two questions and You only get one. You have to pick one. Pick the best one. All right, fair enough.
57:39
Given that like as an entrepreneur coming in from the Midwest, I had to get used to the idea of you know, investors having passive residual incomes of like you know, $500,000 an hour and up.
57:51
And prioritize for time, you know, so they're looking for especially with the Pareto optimal distribution on tables of you know, like hey, how do I get my 100x?
58:01
And I'm coming at it from like how do I eliminate dead weight loss so I can get to market and not pay those kinds of costs.
58:10
How do you work on you know, aligning the objectives as an investor that enables for those unicorns to actually get to market?
58:20
I have no idea how to concisely say that the question.
58:23
It's something about aligning objectives where um where returns versus cheap money to start.
58:34
Where is um I don't know.
58:38
Wait, so so I don't know if I get it. you just rephrase it?
58:40
Yeah, can you can you try to make your put your question in like a very concise short one sentence understandable format?
58:52
So as an investor who's seeking a high return, how do you align your objectives with enabling companies that are looking for the lowest cost to market in terms of that it's a So so how do you balance the high return that investors are looking for with companies that need to very to compete in a very price sensitive market. Is that right? I think they're aligned.
59:18
I I mean we have you know, your investors have the same goals, right?
59:25
Which is we want to help you get to market so that we can quickly get feedback on whether there's a there there on their product, right?
59:29
And so helping you figure out like what are the things that you what's your minimum viable product?
59:35
What are the things that are nice to have versus need to have?
59:37
Like for example, um often times when we hear a seed pitch, someone will be like, "Well, I need all this money cuz I have to build both Android and iPhone."
59:43
And we'll say like, "Well, we don't have any market validation yet. Why would we build both?
59:48
Let's just spend money on one of them, see if people like it, and then we'll build the other one." Right?
59:51
So like those are examples I think with they're very aligned in that we work together to figure out how do we get our product out there and get feedback and kind of conserve our cash that we don't blow it all before we have actually learned anything.
1:00:05
It all comes to the same thing.
1:00:07
Okay, sorry to cut it off, guys. Thanks very much. Thank you very much. much. Thanks for coming.