Getting started as a VC | dstill.ai shared chat

1

Chris Douvos – A Value Investor Lost in the Valley - [Invest Like the Best, EP.85]

Invest Like the Best with Patrick O'Shaughnessy

(someone): Chris is the first professional allocator I've spoken with who focuses specifically on venture capital funds. So I had a ton of questions for him on how to build a portfolio in an asset class known for uncertain, but often enormous outcomes. We discussed the major recent changes in the asset class and where things might be going. I sought Chris out because while this is an investment style that is full of creativity and hope, I've always felt it could use a healthy dose of skepticism and a value investor's mindset. He delivers in spades as we try to separate the real from the ideal. We didn't record it, but Chris's tour of Palo Alto was one of the most interesting and entertaining hours I've spent. He's a student of markets and of history, and I look forward to learning more from him in the future. Please enjoy our conversation on venture capital investing. So Chris, I'm going to start with a question that is antithetical to most venture investing by forcing you to play a little game, which is if you had to build a quant model where all you got to select venture firms was four factors that have to be objectively measurable. Objectively measurable. So for example, assets under management could be one factor that you could use in your way of screening or track record or something like this. What four factors, knowing fully that this is a silly place to start, do you think are most positively related to future success for venture firms?

2

Jerry Neumann – Why Venture is Hard - [Invest Like the Best, EP.134]

Invest Like the Best with Patrick O'Shaughnessy

(someone): People built tools to do these things that allow anybody to do it. And I think that's generally true in most software nowadays. Anybody can learn to become a programmer, not anybody. But it's a lot easier. You don't need to go to MIT and get your degree in computer science. You can go to Lambda school, right, in three months, six months, get a good job as a programmer because you're using a lot of tools that were developed by other programmers to make programming something that's more accessible to somebody. You don't need to be the high priest of the programming religion to become a good programmer. So if that's true, then where is the innovation in programming itself? It becomes a skill that's accessible to enough people. Let me say that differently. So you've started a SaaS company, which goes after a specific niche, and you have developed software to address the problem that you've found. Anybody who sees what you've done can replicate the software fairly easily, whereas previously that may not have been true. But now things like AWS and the whole, what has caused this explosion in small companies, the ability to stand on top of the shoulders of giant companies and use their infrastructure to make your job easier makes the job easier. So it's easier to replicate. So I think that buried entry in a lot of what venture capitalists have done previously is going away. Expertise specifically as a barrier, right? You'll find it. So AI, there was a window and probably still is.

3

Lauren Loktev, Kanyi Maqubela, & Craig Shapiro - Watching a Venture Fund at Work - [Invest Like the Best, EP.19]

Invest Like the Best with Patrick O'Shaughnessy

(someone): somebody who has a knack for experimentation, who's willing to actually not know a priori what they're going to find, but look in a very productive way, that tends to be the type of founder that stumbles into the really great insight.

(someone): I think the one thing that we do look for, though, is extremely high conviction in some area. It doesn't necessarily have to be about exactly what the business is going to look like in five years, but fundamentally I think one of the most important things when we evaluate a founder is what drives them and what's their underlying motivation. And sometimes that's a problem. Sometimes it's a desire to create something that they wish existed in the world. Sometimes it's a particular area of people that they want to work with to build something amazing. But I think that behind that tinkerer's mindset, there needs to be a be all end all, I have to do this kind of drive, because founding a company is very hard. And unless you just tooth and nail are like completely committed to doing it, for some great reason, it's a lot harder to make it happen.

(someone): It seems like it's the best time maybe ever to be launching a company in terms of access to capital, Amazon Web Services, all the tools and infrastructure that's available to take an idea and translate it. With that in mind, I'd love to hear from Lauren and Kanye advice that you have for founders or for just entrepreneurs more generally. Not every small business owner or entrepreneur is going to be seeking venture investment.

4

Bessemer Venture Partners - Building a VC Firm that Lasts Centuries - [Invest Like the Best, EP.327]

Invest Like the Best with Patrick O'Shaughnessy

Patrick O'Shaughnessy: I'm loving these answers because the ideas are so generalizable to any kind of investment partnership and firm, like it doesn't need to be early stage. So I have a few more. I'm interested in the same sort of question that I asked on roadmaps for the concept of the sort of apprentice model. I remember talking to Sarah Tavel about this when I first met her many years ago and kind of learning about the way that Bessemer, like you said, you've all started there in your twenties, tends to get talented people very young and groom them for a long period of time before even giving them the checkbook. in that five to nine year period, what works? What have you found to be the most effective way to run this program that you think maybe others could borrow or steal?

(someone): It's just a lot of time in the same room together. I sat next to Jeremy on two boards before I was a partner. I sat next to Bob Goodman, one of our senior partners, for 200 hours of board meetings and other conversations. And then Felda Hardiman, my first mentor, I spent several years in the same room with him, just listening to him talk to companies and occasionally chipping in at first and over time building confidence. So I think that's the core part. There's no shortcut to that, but. Boy, you learn a ton over time, and you just take for granted how much you've picked up along the way.

5

Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282]

Invest Like the Best with Patrick O'Shaughnessy

(someone): The thing that is striking about the venture capital as a class is it is so much more driven by luck and good fortune than traditional investing is. Public market investing, private equity investing, these are very quantitative roles where you are really orienting yourself around math and understanding businesses in quantitative form with an understanding that management teams can be changed in and out when they're not performing it. It is a much more established, expected set of operations. Venture is just so different. You know, the reality is this is a people business. Big companies that are built are built on the back of tremendous aggregation of talent, of people, and that In some ways, it's very hard to predict. In every way, it's hard to predict. I look at venture capital as a class, and I think that the people we term to be great investors often are the people who have been standing the longest. Do you have an ability to continue to amass capital to invest? Have you been around the table for 15 years to be in and out of cycles? Have you been fortunate enough to be on one or two or maybe three journeys that have worked? But there's so much luck involved and patience. I do think the beautiful thing about this industry is the longer you're in it, hopefully the calmer you get because of the reality that the impact you have on these companies is a lot smaller than you think it is going to be when you enter any of them. And it just needs to be a lot more grace and humility and patience, frankly, in the sector.

6

Lauren Loktev, Kanyi Maqubela, & Craig Shapiro - Watching a Venture Fund at Work - [Invest Like the Best, EP.19]

Invest Like the Best with Patrick O'Shaughnessy

(someone): somebody who has a knack for experimentation, who's willing to actually not know a priori what they're going to find, but look in a very productive way, that tends to be the type of founder that stumbles into the really great insight.

(someone): I think the one thing that we do look for, though, is extremely high conviction in some area. It doesn't necessarily have to be about exactly what the business is going to look like in five years, but fundamentally I think one of the most important things when we evaluate a founder is what drives them and what's their underlying motivation. And sometimes that's a problem. Sometimes it's a desire to create something that they wish existed in the world. Sometimes it's a particular area of people that they want to work with to build something amazing. But I think that behind that tinkerer's mindset, there needs to be a be all end all, I have to do this kind of drive, because founding a company is very hard. And unless you just tooth and nail are like completely committed to doing it, for some great reason, it's a lot harder to make it happen.

(someone): It seems like it's the best time maybe ever to be launching a company in terms of access to capital, Amazon Web Services, all the tools and infrastructure that's available to take an idea and translate it. With that in mind, I'd love to hear from Lauren and Kanye advice that you have for founders or for just entrepreneurs more generally. Not every small business owner or entrepreneur is going to be seeking venture investment.

7

Chris Douvos – A Value Investor Lost in the Valley - [Invest Like the Best, EP.85]

Invest Like the Best with Patrick O'Shaughnessy

(someone): Chris is the first professional allocator I've spoken with who focuses specifically on venture capital funds. So I had a ton of questions for him on how to build a portfolio in an asset class known for uncertain, but often enormous outcomes. We discussed the major recent changes in the asset class and where things might be going. I sought Chris out because while this is an investment style that is full of creativity and hope, I've always felt it could use a healthy dose of skepticism and a value investor's mindset. He delivers in spades as we try to separate the real from the ideal. We didn't record it, but Chris's tour of Palo Alto was one of the most interesting and entertaining hours I've spent. He's a student of markets and of history, and I look forward to learning more from him in the future. Please enjoy our conversation on venture capital investing. So Chris, I'm going to start with a question that is antithetical to most venture investing by forcing you to play a little game, which is if you had to build a quant model where all you got to select venture firms was four factors that have to be objectively measurable. Objectively measurable. So for example, assets under management could be one factor that you could use in your way of screening or track record or something like this. What four factors, knowing fully that this is a silly place to start, do you think are most positively related to future success for venture firms?

8

Lauren Loktev, Kanyi Maqubela, & Craig Shapiro - Watching a Venture Fund at Work - [Invest Like the Best, EP.19]

Invest Like the Best with Patrick O'Shaughnessy

(someone): And we're saying, gosh, we like it enough that we'll give it to you at a slightly higher valuation. I think the challenge then becomes the supply side of that equation has grown dramatically over the past decade, right? The early stage venture ecosystem has just blossomed in a way that has had an impact on that marketplace. There's so much supply. that when the thing that is really driving valuations are just the desire to kind of win the deal, it can screw up those dynamics a bit. And so I think that's something that, as Lawrence pointed out, that we think a lot about as it relates to positioning the company for a successful Series A. The other piece as it relates to valuation is really just in the underlying asset, which is the people. And you hear venture capitalists talk about this a lot, but spending time to get to know the entrepreneurs. Do you feel like they're capable, competent, able to create value? The answers to some of those questions help drive some of the pricing. If this is a first-time entrepreneur who's never done it before, but is smart, enthusiastic, passionate, mission-driven, it's probably going to be priced a bit lower. If this is somebody who just recently sold their business to Google or Facebook and is now at the rodeo for a second time, that's likely going to drive up. valuation. One thing that we think about as a firm is kind of cost averaging that, right? So if you, you know, our investment period is roughly four years.

9

Jerry Neumann – Why Venture is Hard - [Invest Like the Best, EP.134]

Invest Like the Best with Patrick O'Shaughnessy

(someone): You don't have to trust your gut. There are certain things you need to have in founders. You do need them to be able to tell you what is going on honestly and straightforwardly. And that you can simply talk to them and figure out whether they do that or not. You do need them to have a lot of expertise in the industry they're going in. You need them to be excited about what they're doing. And people who are excited about what they're doing often know a lot of facts about what they're doing that are completely unrelated to what specifically they're doing. Ask them about their industry and they'll know what people who are doing different things in their industry are doing or related things or other solutions. Talk to any of my founders and I assume most founders of venture-backed businesses or most businesses in fact. and you ask them about their industry and they'll know a ton of detail. Stuff that other people wouldn't know and that may not even be that useful to them but they're interested in what they do. So you need that. You need them to be interested because it's not easy to start a company. It's not easy to have a company succeed. It takes a lot more than just the quest to become wealthy. That's not going to sustain anybody over the 10 years of building a business. You just need to want it to work. So there's things like that where you can talk to people and you can actually figure it out. Do they know the industry? Are they excited about the industry?

10

Kanyi Maqubela - Dawn of the 21st Century - [Invest Like the Best, EP. 219]

Invest Like the Best with Patrick O'Shaughnessy

(someone): There's a couple of answers to that. The first answer is a venture capitalist can do two things that no other business person can do for a founder. The first of those is to give them a mirror. As a venture capitalist, it should be our job and the mark of a venture capitalist to live in great service is to honestly reflect back to the founder, their strengths and weaknesses. Because the shape of a company, especially at this early stage, is so closely manifesting the strengths and weaknesses of the founder that just being an honest broker and telling you exactly what you're good at and exactly what you're bad at and keeping it completely real with you is really valuable. Because otherwise you're walking through a funhouse mirror. Because your co-founders are going to not tell you the truth. Your employees obviously aren't, and your customers won't without even knowing that they aren't. And then nobody else cares enough. And so having somebody who can be a mirror is really, really, really important. A fair number of venture capitalists actually still allow you to go through the funhouse mirror. So you think you're eight feet tall when you get out of it, when it turns out you're not, or you think you're three feet wide or whatever. That's a little bit of a psychological one, but there's tactical implications to it. And then the second, is conviction in a company doesn't end when you say yes, it starts when you say yes. And I think that the most important yes for a founder is the first one.

11

Kanyi Maqubela - Dawn of the 21st Century - [Invest Like the Best, EP. 219]

Invest Like the Best with Patrick O'Shaughnessy

(someone): There's a couple of answers to that. The first answer is a venture capitalist can do two things that no other business person can do for a founder. The first of those is to give them a mirror. As a venture capitalist, it should be our job and the mark of a venture capitalist to live in great service is to honestly reflect back to the founder, their strengths and weaknesses. Because the shape of a company, especially at this early stage, is so closely manifesting the strengths and weaknesses of the founder that just being an honest broker and telling you exactly what you're good at and exactly what you're bad at and keeping it completely real with you is really valuable. Because otherwise you're walking through a funhouse mirror. Because your co-founders are going to not tell you the truth. Your employees obviously aren't, and your customers won't without even knowing that they aren't. And then nobody else cares enough. And so having somebody who can be a mirror is really, really, really important. A fair number of venture capitalists actually still allow you to go through the funhouse mirror. So you think you're eight feet tall when you get out of it, when it turns out you're not, or you think you're three feet wide or whatever. That's a little bit of a psychological one, but there's tactical implications to it. And then the second, is conviction in a company doesn't end when you say yes, it starts when you say yes. And I think that the most important yes for a founder is the first one.

12

Lauren Loktev, Kanyi Maqubela, & Craig Shapiro - Watching a Venture Fund at Work - [Invest Like the Best, EP.19]

Invest Like the Best with Patrick O'Shaughnessy

(someone): can be very conceptual, but also there needs to be hands-on valuation work and legal work and structural work. And so understanding kind of both sides of that, the conceptual, the themes, but also the nitty gritty and your actual process for going through this would be fascinating. So maybe we can use education or frankly any company that you feel is an interesting way of talking about this, but I'd love to just hear about what do you actually do every day?

(someone): Well, one thing I'll say with respect to education is a strange feature of being a venture capitalist, even if you are a sector specialist, is you have to find a way to sprint up the learning curve with a given company because you have to find enough context that you can unpack some of the risks associated with a given business and some of the challenges in going to market. while starting from 18 months, if not years, behind the founder. And so we have to learn how to pull out signals and learn how to educate ourselves about a given market extraordinarily quickly. And it's just super hard to do that in a way where you can really feel like you're an expert in what you're investing in, especially if it's in the future. And so it's sort of still being written. So in one way, we have to have the most intense growth mindset and be voracious learners to be successful venture capitalists because there's so much we have to figure out on the fly right away as we hear a pitch, which is probably my favorite aspect of the business is just processing the information in real time and putting it in context that we're creating as we're processing it. It's something strange but fun.

13

Sheel Tyle - The Future of Venture Capital - [Invest Like the Best, EP.70]

Invest Like the Best with Patrick O'Shaughnessy

(someone): So he risked his life. Every time you do one of those, I mean, we know this, officers are very often killed in the line of duty, and God bless them because they are doing hero's work, but it's dangerous. And he's not even a trained officer, he doesn't even hold a weapon, but he's going along with these guys. So that's the type of stuff I respect. And my founders, the ones I want to back are the ones who experienced the problem that they're tackling for themselves.

(someone): Last question, which is for those that are newer to the idea of venture capital and interested in entrepreneurship and or venture capital, are there other resources or things that you recommend people do as a first step? Sometimes there's no substitute for actually doing it yourself. So finding a way to make a small investment in a company or 10 or whatever, but are there any special recommendations that you might leave people with who want to learn more about all this?

(someone): Yes, I would say there are a couple of things to do. I think the first is read. There are a bunch of things you can read from articles and news publications. The standard are sort of like the tech crunches and the venture beats of the world. That should give you a sense of what's happening. But I also think there are a number of books that are useful and The authors to look up are Bill Draper is one of the most prolific venture capitalists. I think one of the founders, frankly, of the venture industry. He's written a great book.

14

Lauren Loktev, Kanyi Maqubela, & Craig Shapiro - Watching a Venture Fund at Work - [Invest Like the Best, EP.19]

Invest Like the Best with Patrick O'Shaughnessy

(someone): can be very conceptual, but also there needs to be hands-on valuation work and legal work and structural work. And so understanding kind of both sides of that, the conceptual, the themes, but also the nitty gritty and your actual process for going through this would be fascinating. So maybe we can use education or frankly any company that you feel is an interesting way of talking about this, but I'd love to just hear about what do you actually do every day?

(someone): Well, one thing I'll say with respect to education is a strange feature of being a venture capitalist, even if you are a sector specialist, is you have to find a way to sprint up the learning curve with a given company because you have to find enough context that you can unpack some of the risks associated with a given business and some of the challenges in going to market. while starting from 18 months, if not years, behind the founder. And so we have to learn how to pull out signals and learn how to educate ourselves about a given market extraordinarily quickly. And it's just super hard to do that in a way where you can really feel like you're an expert in what you're investing in, especially if it's in the future. And so it's sort of still being written. So in one way, we have to have the most intense growth mindset and be voracious learners to be successful venture capitalists because there's so much we have to figure out on the fly right away as we hear a pitch, which is probably my favorite aspect of the business is just processing the information in real time and putting it in context that we're creating as we're processing it. It's something strange but fun.

15

Jerry Neumann – Why Venture is Hard - [Invest Like the Best, EP.134]

Invest Like the Best with Patrick O'Shaughnessy

(someone): You don't have to trust your gut. There are certain things you need to have in founders. You do need them to be able to tell you what is going on honestly and straightforwardly. And that you can simply talk to them and figure out whether they do that or not. You do need them to have a lot of expertise in the industry they're going in. You need them to be excited about what they're doing. And people who are excited about what they're doing often know a lot of facts about what they're doing that are completely unrelated to what specifically they're doing. Ask them about their industry and they'll know what people who are doing different things in their industry are doing or related things or other solutions. Talk to any of my founders and I assume most founders of venture-backed businesses or most businesses in fact. and you ask them about their industry and they'll know a ton of detail. Stuff that other people wouldn't know and that may not even be that useful to them but they're interested in what they do. So you need that. You need them to be interested because it's not easy to start a company. It's not easy to have a company succeed. It takes a lot more than just the quest to become wealthy. That's not going to sustain anybody over the 10 years of building a business. You just need to want it to work. So there's things like that where you can talk to people and you can actually figure it out. Do they know the industry? Are they excited about the industry?

16

Sheel Tyle - The Future of Venture Capital - [Invest Like the Best, EP.70]

Invest Like the Best with Patrick O'Shaughnessy

(someone): I think one of the founders, frankly, of the venture industry. He's written a great book. Even books like Adam Grant's Originals is useful as you think about how to evaluate companies and what makes originals originals because entrepreneurs are originals. So they're books, and then there's investing. So it depends on your means. If you are of means, I would say go be an investor in one or two venture funds. You'll learn how they do it, and it'll give you opportunities to see what they're investing in and potentially co-invest on some of their opportunities. I usually recommend that over just being a venture capitalist yourself, not because I don't want other venture capitalists, but I think it's actually really hard. I mean, the best deals are ones that are competitive and they have to be in the game. And so what sometimes I worry that if you haven't done this before and don't have that network, then the opportunities you see might be the stuff that is more publicly available. And if it's more publicly available, you should ask yourself why. And usually that's because they didn't raise from the top venture firms. So I wouldn't want the first experience to be a negative one where the returns that one is hoping for is not what they get. But if you do invest directly in companies, dabble. Do a very small amount until you know this is something that you're uniquely suited for.

(someone): Well, this has been really fun, Shiel. I think that it will be neat to check in with you maybe a year or two from now to see exactly what the portfolio's begun to look like.

17

Jerry Neumann – Why Venture is Hard - [Invest Like the Best, EP.134]

Invest Like the Best with Patrick O'Shaughnessy

(someone): And especially if you read the press, all you hear about are the successful companies. So you say, wow, it's just not that hard. And I think that's the wrong way to look at anything, if it's what you're doing for a living. You should accept that it's not going to be easy. It's work. So the idea that you can just pop in and not do any work and be successful, I think, is mistaken. And I think it's a bad attitude, obviously. But then some of them will be, because there's so much luck involved in venture capital that some of them will get lucky. So I think that's a problem. I worry less about that problem. I think the people who don't do the work are going to get weeded out. There's sort of a weird market dynamic in the interim where people will bid up companies. You know, if you have an auction, then the person who wins the auction obviously paid too much because they paid more than anybody else would pay. And that's true in venture as well. The person who wins the auction for the term sheet is by definition paying too much if there are multiple bidders. So if you have people who are unclear how to really value a company so that they can make money, they're going to be the ones who get the term sheet in. And then know, as a smaller investor, you either have to follow them or not. And that's, that's your choice.

18

Brian Singerman – Investing in the Best Founders - [Invest Like the Best, EP.127]

Invest Like the Best with Patrick O'Shaughnessy

(someone): We have an awesome team here. Even the junior members are – everybody can drive investments here of a certain check size. I think that that's kind of the only way you learn how to do this and it's the only way to actually get your cut going is by making investments. On the positive side, if we make an investment, if we make a couple hundred K investment and it goes to zero, it doesn't really have that much of an impact on us. Venture capital is all about upside maximization. you have to train your gut by making investments, period.

Patrick O'Shaughnessy: When it comes to the team, you know, something obviously you need a strong founding team that can persevere probably maybe is one way of thinking about execution risk. Are there common attributes that you're looking for in founders? And if so, how have those manifested historically? What's shared across them?

(someone): Honestly, we've had authors come in to try and help us put that into words. What is a founders fund founder? We've never been able to put that into specific terms. There's certainly certain personality types that I tend to be attracted to. Like, I don't feel like I'm a good pure mentor. I'm attracted to founders that know how to run their business. I don't know how to run a business. I'm an investor.

19

Jason Citron - Building the Third Place - [Founder’s Field Guide, EP.4]

Invest Like the Best with Patrick O'Shaughnessy

(someone): And I think that Microsoft has created a great ecosystem for enterprise startups to help with go-to-market distribution, to help with product development, and help with procurement and purchasing to make it easier for both your startups and customers.

Patrick O'Shaughnessy: Evan, I'd be curious, even though you're only a couple of years into this company, what your advice would be looking back for those that are starting new B2B companies, enterprise-facing companies for the first time. What advice would you give them?

(someone): That's a great question. I mean, there's three things that are maybe top of mind for me. One is like we talked about earlier, right? You want to start with the end in mind. If you want to create, you know, if you want to have a Snowflake or CrowdStrike caliber IPO, you need to kind of understand what in that business is going really well and build that into the plan from day one. If you want to have high speed sales, that's very effective, you know, cost effective, but then you want to invest in things that, you know, accelerate your sales cycle and your ability to allow enable customers to procure. The second thing is a lot of founders, I think, just need to be more clear about what their own job is. There's a lot of superhero personalities that start companies that try to do everything. At some level, I think the founder and CEO job ultimately comes down to identifying the right roles, getting the right people in those roles, pulling through the high bar, and getting out of their way. And then finally, just understanding what are the big existential risks of the business and what is the most important thing to focus that team on.

20

Brent Beshore Returns – Private Equity, Venture Capital, and the Future of Money Management - [Invest Like the Best, EP.22]

Invest Like the Best with Patrick O'Shaughnessy

(someone): which means death to your money. So you better be right and big on a couple of those. But I think it's just all situation dependent. I think there's a lot of businesses that take venture capital that could have been successful if they hadn't. I rarely see businesses that should have taken venture capital that didn't. So I think that's an interesting, there's something there. So yeah, that's kind of, that's the side of, as an entrepreneur, I would say. As a business model, Think it's probably the hardest money in the world to make is Getting into venture capital. So it is glamorous It is and don't don't let them don't don't let me tell you differently. It is glamorous Like I have I have friends that are VCS. They're flying all over the world. They're meeting heads of state there and Everyone wants them to come into their country and make seed investments, and everyone wants to be their friend, and they get tickets to all the games, and they're at all the conferences, and they're asked to speak, and everyone says they're amazing. It is quite a show. There's a whole meta layer to entrepreneurship that we could talk about at some point that I think perverts the entire system, but I think that's a chunk of it. I mean, there's a whole media circus around being an entrepreneur that is so divorced from reality and in large ways taints some

21

Jerry Neumann – Why Venture is Hard - [Invest Like the Best, EP.134]

Invest Like the Best with Patrick O'Shaughnessy

(someone): They just can't have been venture capitalists five years ago. They must have been doing something else. So I wrote this blog post a long time ago called Heat Death about venture capital in the 80s. And there was a quote from somebody who said that more than half of the venture capitalists who are investing right now have been investing for less than two years. And he considered that a problem. So it's interesting to think if it's a problem. It's hard to know if it's a problem today or not. But the same sort of dynamic is happening.

Patrick O'Shaughnessy: What do you think the most important implications of, of this are in terms of kind of what's getting funded, what founders are optimizing for versus maybe what they did when it was a hundred VCs. What are the most tangible changes on both sides, the investor and the founder side that you've observed?

(someone): So there's two things. One is the people who are investing themselves. And I've met a lot of people who have just started investing. Some of them are really smart. They've come out of roles from startup companies, really thoughtful people. And some of them look at the market and say, it's just not that hard. You know, people have been making money now for 12 years in this market, fairly effortlessly it looks like from the outside. And especially if you read the press, all you hear about are the successful companies. So you say, wow, it's just not that hard.

22

Bill Gurley – All Things Business and Investing - [Invest Like the Best, EP.137]

Invest Like the Best with Patrick O'Shaughnessy

(someone): I think certain people are able to grab ideas from further away places. I've heard of this notion of like far analogies, but If you have that skill set you can read even further away and bring stuff back But just read I still today read obsessively and I've noticed Other people that have had success say that in a variety of different industries There's just a lot of information available to shorten the mentor question a little bit I'm curious about you acting as a mentor or what you think makes for a good mentor I mean, I think the first thing is, is you just have to make yourself available. One of the tenants that I talked about is just. There's something really interesting about Silicon Valley that I can't say it would work a hundred percent of the time, but 60% of the time, if you approach someone in a reasonable way and ask them to respond to an email, maybe do a five minute call, like don't overstay, you can pretty much get in front of people. There's some essence of how this place has worked and how people move in and out of different orgs that you can get. I wouldn't start by just going straight to the top, but you can develop mentors and get people to look after you. One of the things I talked about in there that can be kind of a viral or network effect is if you can get that mentor to care about your outcome, if you can get them to believe that if you're successful, it reflects well on them, and they take pride in your success. That's a lot more interesting than if I just met somebody and I know them. That's a little trickier.