when you're in the data room what are some of the red flags that others who are interested in doing this maybe aren't looking for that you find and use often you know we're always directed cap table and we're always fully integrated with management with the SE Suite so a lot of that is in the data room but a
lot of that's also it depends on the sector depends on their economic models but a lot of that you can get face Toof face if I ask you a question and you answer an adjacent question you think either I'm stupid or you don't know the answer you're hiding something like it can be nothing else and so how they answer the question do they answer it do
they skirt around it that really matters hey how many robots are you guys producing this year if you don't know the number like there's a problem there if you answer a different question about your production facility there's a problem there and so I I think how someone answers the question and degree of hesitation there matters I think that
a lot of the red flags we see is when I have to keep asking you for things that aren't in the date room you're probably reluctant to show them particularly financials there's a lot of proor of financials and games that are played there when somebody joins The Firm there's a couple books that we make them
read just so they can have a basic understanding of like I like to hire folks that that don't necessarily have a a pure form Venture background I want them to be real operators or you know to have a dimensionality that other Venture players might not I think Venture is one where you can you can learn it if you've
got like a rigorous background and something else whether you're a scientist or an operator or whatever so I give them those books and there's some basic manipulation that you can see in a lot of proforma accounting which I think really matters I also think that when someone says hey we're the Uber of X or the Airbnb of Y like no you're not Uber
is the Uber of uber of ubering and taking cars from here to there you are not that like stop telling me that because you're trying to Anchor my perception on the most survivorship biased focused firm that you think I would like and I don't like that I just want you to just give me the facts that happens usually I'm I'd say 99.99% of
the time I'm never the smartest guy in the room but I'm certainly one of the most effective and so I need you to answer my plain English questions as if I'm you know 5 to 10 years old and again I do the same thing that I do for interviewing people I peel back the okay tell me about this tell me about this
and there is a there's certain context clues within an interaction if I email you and I'm gonna give you money that you need for your firm to work how long does it take you to get back to me with the answer that's a big deal right because capital is the lifeblood certainly a buy firm but it's the lifeblood of all firms and if you're
Bill Gates spos or Elon Musk you can raise money just by saying hey and everyone will just Chuck it at you you know like you've earned that right because of your your well-earned success for other people and yourself if you're not that guy like you should be answering it quickly so timing really matters as well I asked questions about
competition see how they answer it if you don't know your competition I don't know what you're doing frankly and in the data room you can see all of that I found there's one founder where I asked him I was like oh so tell me about the debt you have tell me about the interest rate and and what you're thinking right
like what are you thinking there like do you want to refi he didn't know they had debt because he was a new CEO but he'd been there for 12 months like surely you know you have debt right like even if it's di Minimus even if it's a legacy position that's like 1% of your total Capital stock you know if you have it right surely you've sat down with the
CFO and poured over the books and so I I think it's more about the people there one of my colleagues she's one of the smartest people I've ever worked with she does real background checks on people like she can understand like this person was fired for cause here's what the cause was this person is incredible
here's what they actually LED she's able to discern by by talking to people and factchecking do you just have the the polo shirt with the logo or were you the girl or guy driving the deal and so I think there's a lot of that that goes into it and then you know in the data room there's always something about the clients you'll ask like hey like let me
talk to a client like you can verify the information there's a lot of like basic stuff on the accounting side there's a lot of rigorous kind of formulations we build our own models some we'll have folks that are experts in that sector we'll contract them to to make sure that they can triple check my work and our
analyst's work etc but there's a lot that you have to do there and that's why I think ons sites are valuable if you're investing in something you don't know management you've never been on-site sorry what are you doing again in a world with a liquidity and Venture you really need to you need to be on it from a diligence perspective