YouSaid · the spoken record

Alex Mittal

lines on the record: 68
first: 2019-01-29
most recent: 2019-01-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Sure, yeah. So if you can, in your head, imagine two circles like a Venn diagram circle one being ideas that seem like bad ideas and the other circle being ideas that are good ideas, then that little sliver in the middle is ideas that seem like bad ideas, but that are actually good. And this is a concept, a construct that I've heard early on when Boris and I were just dreaming up this model, we talked with some of these venerable folks in Venture, but who had kind of disrupted Venture? So they were like a little bit of outsiders themselves.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah, you could frame all of investing somewhat like that. Yeah. And clearly, we know what moats are. And so you can kind of crit a semantic language and a way of organizing companies and putting them in a tier of, okay, strong modes versus weak modes versus not actually a real mode, but people think it is kind of a mode. And so it is both.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And it sounds so anti romantic compared to the sort of myth of the venture capitalists riding through Silicon Valley and looking the founder in the eye and saying I could see the resolve of the entrepreneur then and there as opposed to. But like the thing that what I'm saying is actually not that this is the opposite of that because the very immediate next thing I was going to point out is unfortunately at least right now not everything can be distilled to that. And so like a good example is modes. If we could quantify modes, that'd be awesome. We're working on it.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Feels the Azerbaijan based on our experience where things like deal terms, we actually have a model where we just plug in certain parameters and we can tell them what their valuation is going to be on the termsheet that they're going to get before they've gotten it. And it's been remarkably accurate for these discrete business models that we are able to collect and have repeatable model around.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“That looks like. And so one of the cool things that came out of this is obviously for us, that's great, but being able to flip everything I just said to the entrepreneur. So I think there's a value to investors if they can, if they're in a position to be in quantitative about whatever data they do have, assuming the data is good, which is a huge assumption, and applying that to their portfolio as a tool, like not in a dictatorial way, but saying, hey, did you know that the top decile of SaaS companies, this is what their net revenue retention looks like one year in. This is what yours looks like when you're in. Or did you know that for small businesses, the retention or the churn rate of X percent is this on average versus with ACVs that are higher for true enterprise customers? It's this other number. And so that can be immensely valuable, even the most talented founders, because they don't have all those other data points, right? So that's one way to flip it. The other way is like, even there's other places where it's even easier to apply data.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Need trust, right? So you need scale and you need trust. And I think there's a lot of VC firms that have one or the other, or even not just classic VC firms, just institutions that are in the business of working with startups that have immense scale, but they may not have that level of trust that's required in order to have the quality of data that's useful. And then there's on the other side, there are very thoughtful, very, very selective investors who have immense levels of trust like they're on the board of these companies and so forth, but they don't necessarily have scale where data analysis could actually, where you could take data points and draw a line, right? Or derive a formula. And so you have to have both. And that's something that we both scale and trust. And that's something that we invested in from the beginning. And actually, it's not something we had on day zero. So this was kind of like an ambition where we looked into the future and said, okay, what if we were at scale?”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes and no, right? We'll get into that. And then on the consumer marketplace side metrics like what's the percent of organic acquisition versus paid acquisition, LTV, lifetime value, customer acquisition cost CAC, cohort retention. There's a discipline, almost a science around some of these metrics that you truly can translate. And we've seen this done extremely well. And so once you realize that it's like, okay, cool. Now we know some of the parameters that are applicable and we know that some of the business models where we can apply this data to make informed venture investments. But the challenge is that, okay, in the public market, you can download all this data. You can have gigabytes of data. You can pay people for the data. In the private market, and in particular at this stage, there's no such data set. Companies are notoriously protective of their KPIs, their metrics. And so it's how do you actually pull this off then? Basically, you need a lot of data, but you'll”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we thought about that. And for instance, in enterprise, like companies selling to businesses, there's the SaaS business models, subscription as a service, software as a service. And so in the consumer side, you have consumer marketplaces. So think of Airbnb or Uber. And so what we realized is, as you mentioned, we've funded hundreds, literally hundreds of companies. We've seen literally thousands of companies. And again and again, certain business models are repeating. So like breaking apart, say, like SaaS, what are example metrics that are parameters that a SaaS company might have? These would be things like ACV, anal contract value, anal contract value, or retention or churn. Do the companies stay with the firm long term or do they leave later on sales efficiency? How efficient are the sales teams and so forth? Although you don't have that data at the seed stage, by the way. I was going to say both those things.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so this opens up a whole avenue of conversation. We probably could do the whole podcast just on this topic. See how far we go. Well, yeah. Perhaps we'll do like a little preview. So basically, obviously with any application, your ability to leverage data for useful insights is dependent on quality of your data and quantity of your data and the applicability of your data, like all this. And so one of the challenges for Venture is, especially early stage venture, is one could very credibly say, okay, if your whole job is to identify sort of disruptive outlier, like no one thinks this is possible companies, how could you possibly have data that's relevant? Right. And so that's a very strong argument. And actually, that's the consensus argument. What we realized is that, okay, that's probably true. Like, actually, I believe that also. But what if it's simultaneously true that there's certain business models in venture in tech startups that have been used over and over and over again where you actually could potentially have good data?”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the needle that we're threading with our model is how do you leverage the value of an immensely scaled network, but also systematize and implement what has worked well for the highest returns in venture capital, which is that outlier effect. Basically, like all of the returns of the venture industry come from a handful of companies. And it seems like that's the gravity of the industry, like that's the laws of venture capital, this outlier effect.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. I think we live in an era where, of course, as we were early in on the blockchain, and so obviously believe in the merits of decentralization, but there are plenty of good things about having centralization in certain circumstances. And this is one, and maybe we can get into this later, but just because of what we do, which is looking into the ether of what's coming up down the pipeline when it's really unknown and really a lot of risk and attempting to predict what will be the next multi-billion dollar generation defining disruptive technology companies, it's really difficult to do with a consensus decentralized approach. And we actually did spend a lot of time scratching our heads and chasing down can you have some sort of crowd-based venture model that's good at picking out? And I think we've come up with something that gets at that in the ways that's possible, but it's certainly not from consensus.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“We have to hold ourselves to a higher standard because of our online presence. And so if we publicly publish our returns and we update them every quarter, there's no rule requiring us to do that. We just do that. And so those are publicly available and we're proud of our returns, although that is reflective of work done in the past. And so there's an old saying you're only as good as your next deal, basically, or your next partnership. And we believe in that very much.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, since we started investments in Q4 of 2012, we've backed about 300 startups. We almost always enter at the seed stage, although we'll follow on in follow-on financings as late as so far the series D round, or actually the series E round. And the network is over 20,000 accredited investors on the investor side and several hundred entrepreneurs. So that's like founders and co-founders together. And the startups are predominantly, we're based in Silicon Valley here in SF, and portfolio is concentrated here in the Bay Area. But the long tail of the portfolio stretches all around the world. We have companies headquartered in over 20 countries. And similarly for our investors as well. And then as far as just where we've seen the numbers play out on the model side, we're a bit more transparent on performance than I would say most other VC firms. We've always felt”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Two investors and a dog, that kind of a model. And so what's fascinating is if you look at the most successful firms, they actually much more closely resemble the latter than the former. There's a potential future where the future firms adopt those shovels in those tools. And I think that'll happen and is happening. But at its core venture does require some Some actually venture requires an intense level of discipline, an intense level of due diligence. And if it's just sort of left, we didn't seek to create something that kind of executed the venture by itself. One of the differentiators of our model is while it is a network model, there is a centralized standard or standard bar for what qualifies for investment closer to the partnership model than.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Yeah, I think the advent, like as I was explaining over the last five years, the advent of the adoption of technology has come to light. And so Angelus is a great example of maybe more of the shovels model where they're providing infrastructure that almost anybody can use. I think there's over 100,000 companies listed on Angelist. I think there's tens of thousands of investors on there. And it's really a utility versus, say, the other end of the spectrum you're describing where it's a partnership in the case you were giving, I think it's like literally, as they say, like two, five. Yeah,”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“You leveraged a community of thousands of people around the world for deal flow, for sourcing, for vetting, on the tail end, the value add piece, and still had the discipline of a traditional venture firm where returns matter and due diligence matters. And that was the spark. And that was six and a half years ago.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“A VC firm that fully embraced today's technology and landscape, what would that look like? What we came away from was recognizing like there's a lot to learn from the past successful VC firms. In fact, they wouldn't still be here and have written the ups and downs of multiple economic cycles if they weren't doing something right. On the other hand, somewhat shockingly, the people providing capital to the innovators that disrupted other industries, you know, like Amazon disrupted e-commerce, et cetera, they themselves hadn't necessarily fully embraced software and technology at that time. What's really cool is over the last five years, you're starting to see pretty much every venture firm incorporate software data, et cetera, in some format or the other. But that was our origin and really it was just what would a VC firm look like if it was almost more of a community and co-op powered model where”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of two sides to the story of the origins of Funders Club. So, one is the personal one of Boris Silver, who's my co founder and investment partner in my own individual entrepreneur story as well, and the other is the story of venture capital. So in the quickest nutshell that I could possibly do on both. One is Boris and I, previous to FC, where entrepreneurs, and I still think of us in the present tense as entrepreneurs, of course, as well, but had started our own technology companies. From the lens of a founder thought that there could be potentially a different and we hoped better approach to venture capital. And that's sort of where it started from. And then as far as the lens of just VC as a discipline and a field, if you look across the history of venture, it's maybe a generation old, 80-something years old. And especially at the time in 2011, 12 timeframe when we Boris and I got together and started thinking about, okay, what would”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source