38 of the 50 states and DC. Those are the geographies in which sports gambling is now legal. Billions of betting dollars change hands annually on the outcomes of NFL, NBA, and other games. Some of this might have moved from underground into legit channels but I suspect most of it is new to the system. To most participants this is just good fun. For a very very small number it’s profitable. Between those two groups are a consumer population for whom it devastates their lives: addicted gamblers. Unfortunately the mobile apps are getting very good at targeting, growing and parasitically enabling that group.
Despite increasing evidence that participants are by and large hurting their lives by playing, the horserace is out of the barn. We’re not going back. So how do we move forward? Do you just focus on regulating the apps to try and prevent the most extreme abusive behaviors? Do you let the apps do their thing but force them to fund a greater safety net for addiction treatment? I’m suspect of both of those, the former because it’s difficult to draw a single line and capitalism always finds a way to walk a grey area tightrope. The latter because the addicted often cause problems for others before they seek help themselves (and only percentage ever do). So here’s what I think:
First, stay the course and allow legalization state by state.
Next, at the Federal level, enforce escalating regulations, based on the annual amount gambled per participant. For example,
Up to $1k total wagered per year you can gamble with winnings tax free (today everything is taxable; here we’re creating a better threshold to give the the betting apps something in return for supporting the rest of these changes).
Once you hit $1k you can unlock another $9k in total wagers (eg $10k a year in wagers) by showing that you have $100k in assets and/or a credit score about 700.
Beyond $10k you need to essentially undergo an accredited investor check after which you can gamble uncapped amounts subject to just the state/industry regulations in place for consumers, the apps, etc
Because of the KYC already in place for this apps it’s difficult to account farm – I don’t believe my suggestion would just cause people to create hundreds of accounts to wager $999 in order to avoid taxes.
Individual freedoms are really important and quite often MORE REGULATION isn’t the answer. But my goal would be to create some reasonable frictions that mobile sports gambling has eliminated and forcibly reduce the number of participants who can wager sums of money that put their stability at risk.
I assume some folks will take issue here and suggest that either gambling *should* be illegal, or the government shouldn’t be involved at all. Outside of that, I’m curious about other holes in my plan and/or more effective ways to achieve a similar goal.
FWIW, I probably gamble less than $100 annually on sports although as a fan and media junky, I’ve followed the industry for decades. From Jimmy the Greek and the Sports Tabloids being the only mentions of betting lines to what we have today where sports media has basically Pivoted to Gambling.
Ok, so obviously I don’t mean, like, first degree murder. More like manslaughter.
Having an early look at autonomy during my time at Google, and then as a seed investor in Cruise, I’ve been insisting for years that the challenge to adoption isn’t primarily in the technology but in our collective definition of what ‘safe enough’ will be. The below post from 2017 basic can be summed up as “do autonomous vehicles need to be more, less, or equally safe to today’s death rates?”
“They found that the performance of Waymo’s vehicles was safer than that of humans, with an 88 percent reduction in property damage claims and a 92 percent reduction in bodily injury claims. Across 25.3 million miles, Waymo was involved in nine property damage claims and two bodily injury claims. The average human driving a similar distance would be expected to have 78 property damage and 26 bodily injury claims, the company says.”
This is even true when you normalize for car safety equipment/condition – ie it’s not comparing new Waymos with older vehicles. Also this should be a *low* point going forward – it’ll only get safer not just as the software gets smarter but as the density of autonomy increases and cars can talk to cars, versus needed to anticipate what human drivers will do alongside them.
NHTSA is promising “an exemption pathway that is tailored for ADS-equipped vehicles,” suggesting a less onerous, time-consuming process for the release of fully driverless vehicles.
In exchange, the agency is requesting more data from the companies that operate driverless cars, arguing that greater transparency is needed to foster public trust in the technology.
My cheeky post title is just to remind you that today’s cars (and their human drivers) kill thousands and thousands of people each year. To suggest that in order to be ‘safe’ our autonomous replacements should be error free ignores the improvements that can be gained versus the status quo. More than 40,000 Americans die each year in traffic accidents. If autonomy can save any of these lives, we should be moving there as quickly as we can.
Thoughts which are somewhere between half-baked and overcooked…
It’s been my experience that most venture firms either exist *because* of a partnership, or instead are a collection of partners. The former is about a group of people creating (or inheriting) a firm together because it was the best way for them to accomplish something they wanted to do. The latter is more about individuals who have found themselves as part of the same organization, practicing their business together and separately.
This might sound like the former is “good” and the latter is somehow lesser but I don’t mean it that way. Both versions can be run well or poorly. Both versions can be great investors. But they do tend to have different playbooks and implications for founders.
The former usually benefits from collaboration but can suffer from groupthink. The latter can contain constructive competition and challenging thought or just plain disfunction.
The former sometimes has more trouble navigating a generational change or adding new out-of-bounds thinkers. The latter is easier to plug new players into but harder to keep those pieces all together.
The former knows what they stand for and it typically shines through in their brand, but has trouble with self-reflection and leaving the old ways behind.
The latter has more challenge in articulating why they exist beyond the economic motion of venture, but also clarity in the true north of those incentives.
It’s likely an overgeneralization (or just plain incorrect) to suggest the former are collaborative in their decision making around investments whereas the latter is more lone wolf. I’m also hesitant to say that these types of firms routinely divvy up economics differently but consistently within their categorization.
But when I’m talking with a GP, and getting to know their firm as coinvestors, I do find this framework one which I mentally apply to understand how they might ‘get to Yes’ on a portfolio company, what support of that company will look like over time, and what could happen to the startup post-investment if the sponsoring GP leaves their firm.
It’s GP musical chairs season – more VCs are leaving (or being asked to leave) their firms. But what rarely gets discussed in this coverage, or their ‘greener pastures’ blog posts, is the impact upon their portfolio companies. My advice still generally looks like what I wrote in 2019, perhaps with a bit more sensitivity to post-ZIRP realities (as a founder you might not be able to accelerate your next fundraise as easily as I suggested back then).
I tend to advise folks that “anyone says you need to sacrifice *everything* for a startup is dangerous, but anyone who says you don’t need to sacrifice *anything* for a startup is naive.” And the early story of YouTube is about an amazing small team, coming together and throwing themselves into an incredible opportunity. Racking servers at midnight, working through complex negotiations with the music labels, trying to keep the site up as traffic spiked….
In this conversation YouTube’s early investor, Sequoia’s Roelof Botha speaks with YouTube’s cofounder Steve Chen (as well as some other early team members). There’s the overall arc about how the company started and ultimately sold to Google, but I especially loved Steve’s pitch to early employees: “Look like i don’t know if this company is going to be around in three to six months.but what i can tell you is it’s going to be the most memorable three to six months of your life”
Having gone to grad school with Roelof and then worked alongside Steve post-acquisition, I can attest their enthusiasm, care, and appreciation are all genuine. Congrats to Steve, Chad and the YouTube team. You changed the world.
Petersen has become famous for making beautiful bikes, using materials and components that his industry has mostly abandoned, and for promoting a vision of cycling that is low-key, functional, anti-car, and anti-corporate. He has polarizing opinions and an outsized influence.
A fun piece about making, commerce, lifestyles and contradictions.
During a code-yellow, a leader can escalate a project/situation to a war room situation, pulling people out of their day-to-day work to focus entirely on the problem at hand. It is alluring because it allows for existing plans to be deprioritized, removes any/all ambiguity around what is most important at the moment, and strongly encourages the team to sacrifice the ‘L’ and ‘B’ from Work-Life-Balance.
My personal belief is that the ‘correct’ frequency for Code-Yellows is not frequently but also not never.
Duct Tape [Molly Graham/Glue Club] – Molly’s a great operating exec who makes frequent appearances in my link blogs. This one is about ‘duct tape,’ interim org decisions that won’t hold forever, but can sustain itself long enough to focus on other urgent needs first.
Examples of duct tape include:
– a super talented learner leader paired with an outside advisor (make sure you set clear expectations up front that you’ll eventually layer the learner leader)
– an external fractional leader (someone who has done the job before at bigger scale so they can easily do your role with 1/2 or less of their time)
– bundling two orgs together under one leader that you will eventually split apart (eg, your eng leader can run product or vice versa, your marketing leader can run sales or vice versa, etc)
Using AI to be more present and effective in your meetings thanks to Granola [Alex Rainert] – I too have found myself less distracted during meetings as a result of AI notetakers like Granola. Sometimes my hands don’t even touch the keyboard and I just rely upon the AI to produce a summary of key points. I’ll verbalize a specific thought or expand on a question just to get it ‘heard’ by the bot, in order to ‘mark’ a place in the summary that’s important to me, so it does lightly start to shape the meeting in a way, not just a passive collector. We’ve definitely hit a tipping point and you should now go into every video meeting assuming you’re being recorded. That might feel icky but it’s the new normal.
The Observer [a great free Substack about strangeness, UFOs, things that go bump in the night, etc] – If something titled “Killer Kodaks and Soul-Snatching Shutterbugs” (about horror films and myhts involving the idea a camera can have mystical properties) increases your heart rate then this email newsletter might be for you.
For startups, a good Board is better than no Board, but a bad Board is worse than anything. One component of a good Board is a high value add Independent Board Member, which in my experience, often doesn’t get added early enough (for a variety of reasons). But sometimes the CEO takes the initiative to recruit an absolute gem and that was the case with ResQ, a software startup servicing the hospitality owners and service/repair vendors. It was serving on that Board where I first met Nilam Ganenthiran, back while he was an executive at Instacart. He brought relevant operating experience and a great perspective into the room, representing not the CEO, not the investors, but *the company,* which is exactly what you want from an Independent. We developed a friendship as part of our Board service and a recent blog post of his made me think I wanted to learn a bit more about his Instacart experience. So what follows are Five Question with Nilam.
Hunter Walk:You started at Instacart in 2013, just a year after it was founded, which obviously turned out to be an epic decision. Was it a case where you already knew folks there and had confidence in them, or some other aspect which gave you reason to join?
Nilam Ganenthiran: The story of me joining Instacart in 2013, is actually rooted in an epic bad decision. I was introduced to Apoorva, the founder of Instacart, in the spring of 2013 by my close friend/business school neighbor Rafael Corrales. Rafa runs Background Capital, and is one of the best partners for early company builders I know. Apoorva was ideating on his next project and was delving deep into the grocery sector. I was a consultant who had spent my career, starting at the age of 16 and working as a cashier in a grocery store, in and around the grocery industry. We started ideating on the concept of Instacart, which originally was going to be an e-commerce first grocery service with small micro-fulfillment centers in dense urban centers (think of the original concept as being similar to the quick-commerce industry which would emerge 5-6 years later). Apoorva was looking to bring on a non-technical co-founder as he entered YC, and my epic bad decision was not to jump at the opportunity to join Instacart at that moment. My wife and I were thinking about starting a family, we were happily living in Toronto, and I did not have the risk appetite to leave a secure job to join a startup.
About 10 months later, I was about to go on extended paternity leave with the birth of our daughter Sita, and was at my going away party. I got a text from Apoorva asking if we could reconnect. I coincidentally had been doing a project for a large grocer focused on e-commerce and had more confidence that this was a service that needed to exist for consumers, and that grocers would not be able to solve this problem sufficiently themselves. I flew to San Francisco to meet with Apoorva, Brandon and Max – who were working out of a house in South Park – and after the first week of ‘helping out’ as an advisor around the office I fell in love with the team, energy, and infectious ‘just get it done’ spirit. I knew I wanted to help build it from the ground up. I called my wife from SFO before boarding a red-eye flight back home to Toronto and told her that we needed to talk when I got home, as I wanted to quit my job and join Instacart. We talked about it and it honestly was not a controversial decision. In the conversation I remember us circling on this idea – “I don’t think this will work, but if it does, Sita (who was three weeks old) may never do her groceries in a real store”.
In retrospect, it was not a very well thought out decision. We made it based on a gut feeling, a desire to be part of something that had a chance to make a big difference, and trusting the team building Instacart.
HW:The whole ‘get on rocketships without worrying about seats” – you ended up moving through Instacart in a variety of business and strategy roles before assuming the President role. Were “what’s best for Instacart” and “what’s best for Nilam” aligned the whole time, or did you encounter moments where you needed to raise your hands to advocate for yourself? What advice do you have for people in fast-growing companies about being a team-player but also taking advantage of the unique opportunity it provides?
NG: This is a hard one as I think I struggled with the conflict for a long time. This is likely cynical, but as companies get bigger the ratio of decisions based on “what is right for the company” vs. “what is right for the decision maker” skew towards the later. The good news is, this is not necessarily a bad thing since there is usually alignment between what is best for the decision maker and company. The best companies and cultures seem to have figured out this balance over time despite scale – but it is hard.
I had the privilege of being an exec at Instacart for 8-years. There were year’s where I felt that I was sacrificing my own growth and career development for what was best for the company. There were other year’s where I felt the company was making bets on me to figure out problems which I had no experience to solve. Looking back, the encouraging thing is that over a multi-year period I never felt like I was getting the short end of the stick. It definitely required patience (and often self control), but the sheer volume of problems to be solved in startups allows for lots of opportunities to grow and take on stuff which is not in your direct domain. Over time, if you prove yourself as being able to consistently solve those problems, you will earn the right to take on more and more scope.
HW: I loved a recent blog post of yours on “Code Yellows,” basically a call-to-arms sprint where a leader can focus as many resources as they need on solving an existential challenge. Did you ever encounter internal resistance – either from other leaders or ICs – to the Code Yellows and how did you handle? Seek to explain and enroll, or basically tell them if they don’t want to work on Saturday then they don’t need to work on Monday either?
NG: Thank you – I have gotten a lot of feedback on the post (both from people who agree with the premise and those that don’t) – and I am glad it struck a chord.
We absolutely encountered significant resistance, typically internally and from functional leaders, to code yellows. The push back usually boiled down to some version of: “We have this great plan that we spent a number of weeks documenting, socializing, and cascading through the organization. You are now asking me to do away with this plan, MY plan, and go tell the team to do something else. I am going to look stupid. Or worse, you are going to think I am stupid because at the end of the year I would not have hit the goals we set out together at the beginning of the year.” Of course, another aspect of the push back which usually was left unsaid, was “this will burn out the team”.
There are a few tactics that worked for me in seeking enrollment when we needed to pivot work in a sharp way and increase intensity – like during a Code Yellow:
Explain why again and again: A big part of a leader’s job during a code yellow is explaining why a code-yellow is necessary, and what the consequences (to customers, users, the company, etc) would be in not focusing on this and getting it done. It can be draining but I have found that if people don’t buy into the need for a code yellow, results will be slower than if you had buy-in. We had code yellow’s fail, and a commonality with those was that the teams involved likely did not agree with leadership that it was actually that important.
Have clear exit criteria: Given you are asking the team to work outside of normal operating hours and push themselves to make meaningful progress, it is critical that you define and stick to a clear exit criteria. Code yellows cannot be a ‘hack’ to drive more productivity from the team. You will lose engagement (and eventually lose people) if they feel that goal posts of what you are seeking to achieve move.
Celebrate incremental progress: Code yellows are tough. They are all consuming. In the middle of this intensity teams can forget basic niceties and view positive feedback as being unnecessary. I have found the opposite to be true. Positive affirmation of progress on the journey out of a code yellow, and quickly acknowledging/celebrating small wins is critical to keeping motivation and boosting morale.
HW:You’ve had the chance to serve on a number of Boards – in fact that’s how we met, working on behalf of ResQ. What advice would you give a startup CEO about how to shape an effective Board and use them wisely? Are there consistent mistakes you seem first time CEOs making with their Boards?
NG: Board work, especially working with younger startups, has been one of the most rewarding things I have gotten to do in my career. Not only has it allowed me a way to share what I have had the benefit of learning during the journey building Instacart, but it has allowed me to keep learning myself – from new situations faced by these companies, and from my fellow board members. For example, I feel like I have learned so much from you Hunter, as I have watched you advise the ResQ team over the past 5+ years.
Board construction is really challenging, especially in a startup. You may not always have a choice regarding who is designated to serve on your board from an investor. The energy and excitement with which your board engages with you may wax and wane with their views on how the company is performing, or worse still – based on how their own careers are progressing within their investment firms.
There are two big mistakes, which hopefully I won’t fall into myself at Beacon, that I see CEOs making with regards to their Boards:
Treating the board meeting as a chore: I have found that prepping for board meetings is a gift. It is a forcing function to get everyone internally on the same page on progress-to-date, it is a driver of accountability, and it forces thinking regarding go-forward plans. You should start thinking about your next board meeting just after finishing your previous board meeting (assuming you run quarterly meetings). I typically have a Google Doc going where I have some quick bullet points of an outline and key points I want to show at the next meeting. I find this helps me now during the quarter how things are going, and it makes the actual creation of board materials so much easier/less of a scramble.
Treating the board as a customer to sell: Yes – board members are important stakeholders, especially since they have the power to fire you (or not give you more money to fuel the business). However, I think viewing your board as an audience to be ‘sold’ to instead of a partner in your journey will orient your board to be less trusting and collaborative. People who serve on boards are usually smart. They know when they are getting a hyper polished version of the facts. Treating your board in this way will have them have their guard up looking for inconsistencies and the “gotcha’s”. I have found it is easier just to explain your thinking, being relatively transparent, and seeking engagement from your board members on problem solving – vs. pretending you have it all figured out.
HW: Explain Beacon Software to me and you think the time is right for an entity like this?
NG:Beacon Software is a new company that my co-founder Divya and I started earlier this year. We are a forever holding company for exceptional software businesses that serve niche or specific customer bases. We believe there are multiple ways to deliver great software to users. While building software companies from scratch is great, Beacon was formed to take advantage of this unique moment where the cost of development is rapidly falling, thanks to the proliferation of co-pilot tools and software engineering agents. We aim to acquire outstanding businesses run by owner-operator entrepreneurs and integrate them into our centralized technology, business process, and GTM stack to re-accelerate growth and margins. At its core, Beacon exists to expand the scale of the ambitions of the great entrepreneurs we partner with and to continue delighting the Main Street businesses for whom these companies have built software.
“What’s one thing you stress to new VCs now that wasn’t as important, say, 10 years ago?” That was the question put to me last week by a senior leader at a large university endowment during Screendoor’s yearly Convening [part annual meeting for our LPs, part community event, part strategy session]. My answer was something like,
“That knowing when, and how, to sell out of a company is now not just opportunistic, but part of your job.”
It used to be as a seed investor that you’d largely just hold on and wait until the company exited via acquisition or the public markets. While this might still be the default posture for most of a portfolio, if its your only mechanism for liquidity you’re not thinking strategically. Here’s why:
It used to be that all venture investors had largely the same goals and incentives, up until maybe the growth round pre-IPO. Now even the Series A investor is often playing a different game than the seed VCs. Most seed shops are smaller AUM firms, where the partners own/share the economics. They are likely to own the most of the company with their first check, and take substantial dilution pre-exit. Most multistage firms have multiple levels of partners, with many needing to prove themselves to get momentum within a fund cycle. While of course the outcomes ultimately will be final word on their performance, 3, 5, 8 years of ‘hot deals’ and buzz, is what makes many careers. Combine this with early and multistage firms who are now routinely $1b+ in size, and you’ve got a recipe for *very* different incentives. We used to talk about outside led rounds as being ‘the market’ setting a fair price by independently minded firms. Now we have more and more consensus auctions where the price is an outcome of a VC’s ballooned business model and FOMO. These leads to both higher valuations earlier -AND- different underwriting targets for the larger fund (that is, $1b AUM fund is trying to get to 3x net, $60m seed fund is trying to get to 5x net). So ‘playing the game on the field’ means considering selling portions of your stake to other investors earlier than ever in order to lock in some gains and recycle capital.
It used to be that companies would get acquired or go public in “7 to 10 years,” but now many are staying private longer. Either because the founders don’t want to go public (or believe they need to get further before doing so) or because acquisitions have dried up as a combination of valuation mismatches and regulatory pressure, everything is taking longer. Whether it’s the multibillion dollar AUM VCs being able to go deeper and later into their companies, or new sources of capital (sovereign wealth, crossover funds, etc), the financings or tender offers relieve the pressure previous startups faced, and which the public markets could uniquely solve. (More companies should go public earlier but that’s a different post). So seed folks, often first in from a preferred share standpoint, are sitting there for a longer period of time, buried under a larger preference stack, and taking more dilution. Repeating from above, ‘playing the game on the field’ means considering selling portions of your stake.
It used to be more challenging to find secondary buyers. Now there are many more folks on startup cap tables with access to incremental capital to purchase slugs of stock, plus many fund LPs are looking for direct investment access. There are also an increase in market makers/secondary shops, although it’s still very much YMMV – there are folks we’ve worked with on both sides of transactions who we trust, and there are other stories we’ve heard that didn’t go as well.
Besides these three factors you have other more specific situations, such as the liquidity of tokens/crypto currencies, that might impact specific seed VCs. At the end of the day, if you’ve backed great companies, ‘hold and wait’ is certainly a reasonable strategy but it’s not clear it’s still the optimal one.
Ben Braverman and I went to a women’s college. Not at the same time (I’m older), and after it went coed. But Vassar itself is a small school, so that plus its liberal arts focus means you don’t find many of us in Bay Area tech. Ben and I started to hang out because of the Vassar connection and then even more so because he was just so darn helpful. His experience at Flexport; his pay-it-forward nature; and his friendly user interface, made his a desirable angel/advisor for startups. So I wasn’t totally surprised when he shared moving from operating to venture capital. And I was glad to hear it was at a new firm of his own co-creation. Saga says they’re a ‘return to tradition’ and the trio of founding Managing Partners are committed to the craft and to one another. Excited to share more about Ben via Five Questions.
Hunter Walk: Flexport was a life-changing experience which of course in hindsight seems like a ‘no brainer’ job to take but I know at the start of things, it’s not always so clear. How did you originally get introduced to the startup and do you recall how you thought about the ‘pros and cons’ at the time?
Ben Braverman: There were no cons! I met Ryan at Duboce Park (we both had giant dogs). The few times in life when you meet an n of 1 person obsessed with a worthy quest, it’s genuinely obvious what you’re supposed to do. You’re supposed to join the mission and I did exactly that. Side note: really smart people get obsessed with the wrong quests all the time (see model trains or social discovery apps).
HW: As Flexport grew and created a leadership team, how did you decide about promoting from within versus hiring from the outside? Was it case by case for each individual role? Or was there a different framework/circumstances which influenced how you made the decision? And in the event you hired from outside, did existing high performers chafe at being ‘topped?’
BB: We built flexport during a somewhat dogmatic period and the new ‘founder mode’ trend is a reaction to that time in history. Lots of clever people told us there were fixed rules for span of control (aka number of direct reports/manager) – Jensen and his 60 direct reports hadn’t conquered the world yet. With lots of managers, you feel pressure to bring in ‘managers of managers’ from the outside.
Outside leadership is a series of paradoxes. The existing team always accepts them if the new leader is world class and the company is thriving. And yet, you’re also almost always better off just promoting someone from within – context and speed trump experience in most cases, for most startups. The second paradox though, is that we had a number of exceptional people leave the company too early because they were leveled too high, too fast. This was actually much more common than someone leaving because they were leveled (unless their new boss was an idiot). Balance in all things, I suppose.
HW: Did you ‘stay longer than you imagined you would’ or ‘leave before you were necessarily ready’ (even if it ended up being the right decision)?’ What was it like giving up your email address, so to speak? It can be very intoxicating to be at a high profile startup knowing that your identity kinda gets the rub of success along with the company.
BB: I actually thought I’d stay at Flexport my entire career. It’s an endless market (I’m a sales guy at the end of the day, remember) and you’re fixed squarely at the center of global commerce. You can’t imagine a more interesting window into global politics than leading a global transportation business. Unions, tariffs, geopolitics, the world’s largest ships and aircraft supplying the world with every conceivable good. It doesn’t get much better. Even the hurricanes in the American south are potentially related to global shipping – the poorly designed new sulfur regulations are likely increasing global warming and fueling hurricanes because we’re allowing the fleet to pump sulfur into the oceans instead of into the air in the name of progress.
Giving up the email address has tactically been quite a pain in the ass. I was so proud of Flexport that I used the email address to sign up for everything. Recently had to cancel HBO MAX as a result. There was no reason to use my corporate email address to watch the Sopranos other than that I just liked seeing it every day.
HW: I know from experiences within the Homebrew portfolio that you were doing some angel investing already, as well being very generous with your time as a formal/informal advisor to founders. Were you intentionally road testing whether you wanted to try venture capital before forming Saga, or was it more casual than that?
BB: My first angel investment ever was the Flexport seed. I also got advisory shares. This is the equivalent of going on a 7 figure run on your first trip to Las Vegas. I had a completely unrealistic expectation of my picking ability and assumed I’d be able to 100x my money in a few years. It hasn’t quite worked out that way but I did learn that I don’t get tired of meeting founders. My late Uncle Richard used to buy lottery tickets next door to a convent in Boston. He’d see the same nun buying tickets every week. He asked her, ‘you don’t seem particularly financially motivated – why do you play the lottery?’. She said ‘I’m here, talking to you. Look at all the fun I’m having for a dollar!’ That’s sort of how I feel about investing in startups at this point, except that I very much also do care about the outcomes.
HW: Saga has three GPs, essentially three cofounders. What you feel like you needed to be 100% sure of about these relationships before formalizing the commitment, versus things that you might not be absolutely sure about until you’re actually in business together (but you figured would work themselves out). Maybe put differently, is choosing cofounders for a venture fund more or less similar to choosing cofounders for a startup?
BB: Vibes. Max is the common thread – he and I and he and Thomson were friends for years. When he brought the 3 of us together, it just felt right. It was fun from the jump and never felt like work, even in the midst of doing hard things together. If you want a more objective answer for why the partnership works so well, we’re extremely different from each other and bring totally different skills to the partnership. There’s never a moment where it’s unclear who is supposed to do what to move the ball forward for Saga and our partners. In that way, very similar to a great CEO/CTO partnership in a startup. The big difference is that an investment firm makes a lot more sense to run as a partnership whereas the great startups often look at lot more like benevolent dictatorships.
This short clip is pretty self explanatory. I’ll never be on the Forbes Midas List (one of the annual ‘rankings’ of venture capital performance). Why?
Satya and I have always believed that it’s not consistent with our firm’s culture to do deal attribution (who gets credit for what), or to submit private company data from our portfolio to a 3rd party outside of what we share with our firm’s investors.
We’re no longer eligible since we are primarily using our own capital. But the snippet above has a brief, funny story about how we learned we were now disqualified.
