Our wives are friends. That’s the true answer how GitHub cofounder Tom Preston-Werner and I reconnected over dinner a few months back. But when he shared news of evolving his angel investing into a firm called PWV, I knew we’d have a lot more to chat about. And I’d have at least Five Questions for him….

Hunter Walk: We’re both Gen X, which Google’s AI snippet notes was the ‘first generation to grow up with personal computers and MTV.” I know the former played a role in your life obviously, but what about the latter? Did you watch much MTV growing up? Generally a music fan?

Tom Preston-Werner: I was never as much of a music fan as many of my friends growing up, though I did listen to a certain MC Hammer cassette tape so many times that I wore it out. I guess I enjoyed music, but was never particularly introspective about it. I liked Paula Abdul and Vanilla Ice when they came on the radio, and got roped into buying tons of CDs through BMG’s shady “8 CDs for a penny” promotions. Stuff like Kansas, Stone Temple Pilots, and the Jurassic Park soundtrack. Maybe I was more into music than I remember! But it was never part of my identity. At least until I discovered Pink Floyd in high school.

I did watch a bit of MTV, but I liked the TV shows and commercials better than the music videos. I savored every moment of every Æon Flux episode I managed to stumble upon. That show is deeply seated in my core memory and probably explains some random pathology embedded in my limbic system. I couldn’t believe the weird self-promotional shorts and interstitials they aired. They did stuff on MTV that no other channel would touch, and I loved that. It expanded my perception of what you could do (or were allowed to do) with the medium of television. That same spirit of breaking the rules and expanding what’s possible is exactly what draws me to founders today.

HW: You recently blogged about evolving your angel investing strategy into a proper venture fund (PWV). Your ‘true north’ is to be “the venture firm we wish we’d had early in our startup journeys.” What was your relationship with VC firms like during the GitHub growth?

TPW: For the first four years of GitHub, I actually had a bit of an antagonistic approach to the VC world. We were fully bootstrapped during those years and ran the company entirely off income from GitHub customers. As such, we never approached VCs and didn’t spend much time thinking about them. We took it as a point of pride that we didn’t need to play the VC game to succeed. We made our own rules and were the masters of our own destiny, thank you very much!

The first VC that I recall ever reaching out to us was Mike Maples, Jr. He had put together some crazy algorithm (remember, this is 2008-ish) where he had an associate collecting data about the startup ecosystem and ingested it into his proprietary system and out would pop promising founders. That’s how he said he found us and we chatted with him a bit, but had no interest in taking VC money. I still think it’s cool he put that together way back then.

Even as a VC now, I think if you can bootstrap your company, go for it! When you have to rely on your customers to fund your company, you get very good at focusing on what matters, delivering value to people. This probably requires finding product market fit very early, but if you can do it, it’s a powerful way to control your destiny. At GitHub, we eventually did raise money, but we were able to do it on our own terms (literally). We wanted to go faster and our thin buffer in the bank was limiting our ability to hire rapidly to meet the opportunity in the enterprise. Partnering with Andreessen Horowitz for our $100M series A allowed us to grow faster and access advice around becoming more sophisticated when it came to finance and sales. 

A simpler version of my ‘true north’ is that I want to help founders succeed. Not just because I want to plug a big number into a financial spreadsheet down the road, but because I really BELIEVE in founders and meeting them where they are. I want to dig into the technical details and ideate on the product. I want to help them make the thousand small decisions that prepare them for smooth sailing later on. I want to discuss branding and hiring and how to build an exciting, sustainable culture. I want to feel less like a VC and more like a mentor and champion.

HW: Raising a fund is one task – often easier than actually running and deploying it! Has anything changed about why/how you invest when it switches over from your own angel dollars to a proper fund structure (which includes outside capital)?

TPW: Angel investing is great, and I love doing it. But it means almost always being a small player on a big cap table. When David, DT, and I joined forces in 2022 to start the Preston-Werner Ventures Rolling Fund (a quarterly venture vehicle administered on AngelList) we brought in some outside LPs and drastically enhanced our evaluation and diligence process. We started writing a few bigger checks, and in doing so, found that many of our portfolio companies reached out to us when they were ready to raise their next round, asking if we could lead. But with a small fund, we had to say no. And that felt like a big lost opportunity to be more involved and help these founders even more.

By raising PWV Fund I, we’re putting together a vehicle that extends our experience in funding a broad range of startups, and adds on the ability to double down on our most promising companies. We’ll more often be able to lead rounds and set terms. It’s really about leverage and opportunity. In addition, we’re selecting LPs that want to join our community and help out. When we can leverage the networks of a broader group of investors, we can really move the needle.

Some things won’t change. For me this is much more than a financial game. I want to fund founders that want to create a better future for PEOPLE. Which means we spend a lot of time thinking about the ethical ramifications of each investment and how the technologies they enable will impact people’s lives in a few years, should they succeed. In speaking with LPs, we look for like-minded people that also want more than just a financial win. As a capital allocator, what we really are is a TIME allocator. And there is nothing more sacred to me than ensuring that the people I influence are working on meaningful, human-centered, value-creating technologies.

HW: SF is in a doomloop. SF is back. Rinse and repeat for those of us who have been here a while. Certainly a special place, but also a city with challenges. If a founder asks you whether they should base their company here versus somewhere else, what’s your advice to them? When you invest do you care about company location?

TPW: The Bay Area is awesome for startups. Everything here is optimized for founders working on big ideas. VC money is headquartered here. Legal folks know how to manage cap tables and stock grants. Banks understand that startups are different from brick and mortar establishments. If you’re building a startup in SF, you won’t be alone. There’s an AI event practically every night. Stop by a random cafe for a flat white and you’ll hear a founder pitching their idea to an investor or candidate. If you can find a way to live in the Bay Area, it will absolutely accelerate your timeline and create opportunities you won’t have elsewhere.

That said, there are downsides. You will spend a lot of money to be here. SF salaries are often four times what you might pay for similar talent in Germany or the UK. That means your runway is accordingly shorter. So you have to raise more money, which means more dilution. Maybe the upsides make all of this a moot point, but maybe they don’t and that extra year of runway could allow you to find success. One thing is clear, though. If you are building in SF, you better burn twice as bright, because you might just be burning half as long.

At PWV, we’re happy to invest in companies outside the Bay Area, because there is talent everywhere, and good ideas don’t care about geographic boundaries. But if you do start your venture somewhere else, you need to deliberately make up for the downsides. It means you need to make relationships with VCs and others in SF so we can help you get hooked into the right services. If you’re outside the USA, it’s especially important to have partners (VC or otherwise) in the USA to help you incorporate in a way that makes future funding rounds easy for US investors and smooth for US customers to pay you. We do all these things, and it allows us to help founders wherever they may be on the planet.

HW: Who is a person in tech – dead or alive – that you think deserves more recognition than they receive for their impact upon our industry?

TPW: My answer is not a single person, it’s a KIND of person. It’s every person that has ever contributed to an open source project because they believe that when we work together and share our best accomplishments, we raise the bar for what we can do as an industry.

Untold thousands of developers have spent time writing and giving away code, fixing bugs in critical open source infrastructure, and fielding support requests from users, all without being paid or recognized as the heroes they are.

You will know the names of very few of these people, yet their code makes our modern world of technology possible. Nearly every device you use, from your car to your phone to your watch, and certainly any software product you build and deploy will run and rely on open source libraries. A single line of code written by an open source contributor could run trillions of times a year on various computers around the world, all without that developer ever earning a dollar for it.

And that’s ok. It speaks to the belief so many of us have in the idea of giving back. Giving back to the community that helped us achieve what we have by standing on the shoulders of open source giants. But it also means we should think about and be thankful to open source authors. It means that when we submit an issue on an open source project, we should start with a big “thank you” and end with the best damn issue report the maintainers have ever seen. We owe them that. In fact, we owe them the very success of our industry.

Thanks TPW! Hope we’ll have lots of founders to back together! – HW

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