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Dan Levine

lines on the record: 43
first: 2020-11-12
most recent: 2020-11-12
sittings or episodes: 1
sources: podcast

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“Harry, I had a total pleasure. Thank you so much for having me on and also all the stuff that you do for the community broadly. People obviously love your content. And I'm hopefully happy to try and contribute a little interesting piece and for you to let me try. Sorry for going over. I talk a lot, I know.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Of our whole business, and I knew that given the category and my proclivities for it and the people with taste were loving it, there had to be something there. And then I found this company Altinity that was building around it from some folks who founded a company called Percona Previously, which is kind of a star in the database space historically. And I thought this is great. And it took me years to convince them to let me invest, but I'm very happy with it. And yeah, I'm very excited about the company.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I recently invested in a company called Altinity, which is building a company around the open source project Clickhouse. I actually agreed to the investment in February and then wired the money in April right in the midst of the worst of the pandemic in the US. For people who don't know much about Clickhouse, it's just this incredible open source Comnar database. So if you're looking for low latency data analytics, Clickhouse is kind of the best game in town. It's kind of a very, very popular project that's been adopted by huge companies like Cisco, Uber, Cloudflare, Century, Mux, and Stana, Segment, Tencent, ByteDans, et cetera, et cetera, et cetera. It's incredibly popular, but there hadn't been a company built around it. And it was weird to me because a few years ago or so, I'd long waited for something in this category for about a decade now, actually. It's an area where as a software engineer I'd made use of these products, and it had gone silent this whole category. And all of a sudden a few years ago, Clickhouse started showing up on my radar, and it was such a great example of where you hear enough people love a product and there's got to be something there. So the team that sentry where I'm on the board loved it. Mucks loved it. Instana sells an investment, loved the product. I talked to some friends at Cloudflare. They're like, this is the seat.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm not particularly close with that many BCs, and I actually am newer to sitting on boards with too many VCs. I quite like the people I've got a chance to work with. I work with Vikwalpy from Index-led Series B and scale and joined the board, and I've really enjoyed working with him. David Wani at Greylock, I think in part because he joined the board of Gem, they provide a wonderful balance to me. I tend to be a young, stupid, excitable investor. They're smart, experienced, thoughtful investors alongside being excitable. So I particularly enjoy working with them, but I also enjoy working with wonderful young people like Julie Chauncey at NEA on the board of Century, Christina Shed on the board of Mox. There's wonderful people I work with. I don't know that anyone has particularly stood out in a particular way, but I have been so far pleasantly surprised by the quality of venture capitalists I serve on boards with as compared to my impression of the industry's quality broadly.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Is a weird answer, but I just think this is so important. I just wish the venture community was dramatically more empathetic and compassionate and trying harder on those things across the board. It's not really a mechanic, so that's why it's a compound question. But like, generally speaking, the venture community is amongst the most privileged communities in the world. And I think we get to do one of the greatest jobs in the world. And it's unfair. It's fundamentally unfair that that's the case. And I think anyone who has the privilege of doing this job should be doing everything they can to, on the one hand, do their job well, help their founders do right by their LPs, and on the other hand, like appreciate their good fortune and be empathetic and compassionate about everyone else in the world around you, as opposed to more tone deaf or more self-centered. And it's really hard, and I'm sure I fail at this all the time, but at least try really hard. That's what the world can ask of you, and I wish all four should people of the venture community did that much, much, much, much, much, much better.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Think over rotating on things they read on the internet. I love reading things on the internet too. But I think the most important thing we're trying to figure out is do we like you? Like, do we want to work with you? Do we want to help you? And we're trying to understand as much as we can about your market. The more we can learn faster, the better we can figure out, do we want to work with you? Do you want to work with us and vice versa? As opposed to protecting some facade about you and the business. If you have to lie to somebody too much, you don't really want to work with that person. So I wouldn't spend all this time contorting yourself that way. The second thing I would say that's actually related to this is.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“The hardest element by far is the personal relationship with all of my friends and balancing that with work. It's trying to be as helpful as you can to people, but still understanding that there's some aspects of their life and what they're doing where they view you first and foremost as an investor and not a friend and vice versa. And that's very personally difficult. But again, I can't stress enough, I'm very fortunate life is great.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I mean, if anything the last decade or 15 years has been an anomaly in how dominant one geographic area has been for so long. I think we'll look back and think this is insane how dominant it was. I continue to believe that at least in the medium term, San Francisco will still be the capital of the tech industry, at least in the Western world. I'd expect though that its plurality might decline to an extent. And then over longer period of time, we'll decline more. But it's not to say it's the end of the leadership. It'll still dominate the technology industry, in my opinion.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Truth is stranger than fiction. My favorite biography, though, was definitely Titan, which is the biography of Rockefeller, and it's just tremendous. But I think there's a lot of biographies at that time period that are great, but I'd go with Titan.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“A balance, but a lot of it's that personal relationship, a lot of it's really helping them out all the time and really getting people to think of you as a partner in the business as opposed to just an investor. And I will say one small thing is once you start thinking about yourself that way is you're always all in, which you can only do if you're in a relatively small number of investments as a person, right? You're always all in. It's actually quite a bit easier to reason about. All of my companies, they text me, they call me, and I'm in. I will help. I will do everything I can as best I can. I'm sure there's been moments when that hasn't been the case, but that's when I aspire to be.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a really interesting challenge. I think so long as you could potentially buy up, I think that's the core job of us as individuals, as partners, as people supporting founders. We have to build a great relationship and we have to help them no matter what and be positive about it. That's the goal. It's also why we want to own a bunch of the company in the seed stage as opposed to a small percentage. In the case of Strappy is a great example of this, I love the Strappy team. I think they're super talented, great people. I want them to succeed as much as possible. And I still have a meaningful ownership stake. Excel has a meaningful ownership stake in the company where incentivized to help them because that's the core of our business. So I think you do have to really build that personal relationship and work with them. I would tell you candidly that the tension between lead investor and founder and CEO of a company is a good thing and it persists over the lifetime of the company. One of the downsides maybe of working at an Excel, which I'm happy to bear, and there's not many of them, is for better or worse, our actions with respect to a company always matter. We get calls from late stage investors about our parada, about how we think about the business all the time. So our job is to help the company as best we can, as much as possible. We always have to know what's going on with the business. We always want to do our best to help because we own a piece of the business and we're just, we want to be as close to incentivized the same way as the founder as possible.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Us six by other people, and those six had been done in situations where the company had raised the round faster than we would have thought post the seed round and at a higher price. And actually you and I experienced a version of this together, which is strappy, which is a wonderful company. We co-invest in a seed round. And six months later, another firm leaned in and let a series A, and that might be an incredible deal. It's fantastic, and I love the team, and that's fantastic, and I think the new investor index is quite good, so they know what they're talking about. That is more often the case for us, that we've viewed as a failure mode than the company not working out. And all the statistics we've seen bear that out. So the bigger problem for us is actually that we positively signal too much. And it's also why we decided to care more about ownership when we invest. And every piece of data I can find from our portfolio shows that I think Sequoia actually published data on this that shows that for their case. And I think this is probably the case for the top few funds.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“An example of why I'm blessed to be able to work at Excel, and it's a huge advantage having kind of the firm's brand as a new investor. So we looked at the data on this actually a couple years ago. We looked at a cohort of seed deals we've done over the course of three years, so every deal we've done at the seed stage in three years. We've done about 40 deals. And we termed 25 of them at maturity. So 15 of them were still too new at the time we did this analysis. So they were like, you know, six months in, so they weren't looking to raise follow ones. Of the 25 that were maturity, at the time, 18 of them had raised follow-on capital from us or other people, a series A. Of the remaining seven, I think two had died, one to an odd legal situation, one had run in a capital. I think maybe three had been acquired and a couple others had not been funded. Those odds are phenomenal. I mean, interestingly enough, I think actually Sequoia might have shared some data to this effect. At least all the statistics we've seen, the signal of an Excel seed is the most positive thing you can almost possibly have in the market, which we were somewhat surprised to see. And actually, that's the way our seed investing program goes badly, by the way, is the positive signaling from our investment statistically. So I noticed I said 18 of them had raised series A's, but only 12 of those were”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Lower than those other categories. But those other categories tend to, one of the ways they win is by offering higher pricing, which is perfectly fair. And that ends up driving pricing more often than necessarily multi-stage firms driving things up.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“So, first investment I led in century was at a $6 million post money, and we purchased about 20% of the business. That was five years ago. Scale, the first deal was at a $15 million post money, and we bought 25% of the business. So the key is the ownership piece. But I actually don't think moving prices up is good. I think whenever I hear venture capitalists saying things like price doesn't matter, I think that's wild. Our asset class as a whole does not perform particularly well. Certainly key managers that do an excellent job over time do extraordinarily well. But the asset class as a whole isn't particularly good. And if you're trying to be the best firm in the world, you can't just take market pricing necessarily. Now, if you just win all of the best deals and take market pricing, you'll be fine. But you have to have an opinion about it. You have to try and drive value. You have to communicate to an entrepreneur that your capital is worth more than just cash. And so I don't think we should drive pricing up. It does seem to happen, but I actually think it happens less by core venture firms than people think. I think fewer must do it. I think if I had to survey Angel's pre-seed fund, seed funds and what we think of as traditional multistage firms and ask them what they think the pricing market is for a seed deal right now, I think you'd be surprised if venture capital firms, the multistage firms, as you turn them, would think it's”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I think price really matters, but in the context I would focus more on ownership mattering. So, why does the early stage round matter? Why do people like us do that? I think from a pure economic standpoint, what you want to do is be the lead outside investor in a company with the largest share of the cap table outside the founders. That's the core business, and that's because you can then exercise perata options over time. You can invest a lot of capital. But more importantly, by the way, is the brand with what your business is, which is usually the primary relationship with founders over their lifetime. And they tend to care more about you as that first investor, and you can help them more and they can help you more. And so there's a really valuable thing there. So I actually think ownership really matters even at the seed stage. So what I think is bad is when multi-strategy firms drop $100,000 in a bunch of different deals, and then to your point, they're kind of treating it as a weird option. I think that's a fair characteristic. Most of RC activity, we are buying an ownership stake because that's the goal is to build the stake. So buying 1%, it turns out doesn't really get you anywhere in terms of long-term ownership stake. So typically in our seas, we're buying over 10% of a business and as prices have risen to your point and we're certainly maybe a part of that, that might mean our check size has gone up. We tend to be very price conscious.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“First institutional capital round. And if you're not doing that, that's fine, but you're doing a totally different business than what I think is what we're all here to do and what I personally love to do. There's tricks.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“The core focus. I think in the early 2000s period, some firms went away from this. But if you look at some of the greatest deals of all time inventure, they were those deals. So I think the most important thing I can do in my job is to be intellectually honest about the successes of others that I compete with, such that I can learn from them and be competitive. Two of the best deals of all time were seeds by Sequoia. I think an initial almost $600,000 investment in Airbnb and a million dollar investment in Dropbox get very large ownership positions. That's the core of our business, even at Excel, our first investment in Slack was to seed our investment in Century started as a seed, our investment in Cloudera was an EIR. That's actually what we're good at, it's what we've always been good at. It's the core meat of our business is the earliest stage institutional round, whether that's seed or pre-seed or whatever you want to call it. It's hard and you have to work hard at it and you have to spend time meeting with people before they have anything. That's what I love. I look at firms that refuse to participate that and I just think they're becoming later stage venture firms and even worse they're sliding into it. They're doing it accidentally. But I think every venture firm in the world should be attempting to do this because I think that's the best part of the market is that Seed Series.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I would say probably half of my boards have started to see deals. The fundamental thing I would say is this is all, in my opinion, this has always been the core of the venture capital business. So the first Excel fund in the early 80s, maybe like $30 something million dollars and the check sizes were in the hundreds of thousands or low millions frequently. And then into the 90s, the dot-com bubble happened. Fund sizes balloon, checks getting written in grew. And then the bubble collapsed and you kind of still have these pretty large fund sizes, but people were maybe a little bit more risk averse in the venture side of things while stuff was going on. At the same time, the cost to start a company was going down with things like commodity hardware and just the ease of building software coming down, right? And distribution to the internet. So there emerged this ability to start companies with less capital. And for whatever reason, a bunch of venture firms chose not to at the time play there and upcropped the seed stage. I mean, just an easy way of proving out this history is the reason it's called a series A was that's the first letter of the alphabet. If you didn't want to be the first thing going on, you should have just started by calling it the B, or you could have been second round capital. But traditional firms, they wanted two series A, they want to be the first investor of notes. And there's a variety of reasons for that, and I'm happy to dive in.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“And I love being part of the team. I've always been part of teams growing up, sports, and all things like that. And it's fun because otherwise the job can be a little bit lonely, it can cause more insecurity, but I think being part of a team and contributing into something that's not just your own personal brand, maybe it's foe, but there's a sense of building something. There's a sense of creating something that will last beyond you that I quite appreciate. It doesn't mean the other approach doesn't work, but in my opinion, I think that attributing to a team brand and a firm brand that last generations has a lot of value both to me as an individual investor, my partners, RLPs, but most importantly, the founders who work with us. I get to work with Excel as a group. I hope that's true. And I tend to believe it is, but again, I could be wrong. Like I am on most things.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“First thing I would say is it's certainly something that's happening. And I, again, on this topic, as in many others, I'm quite likely wrong. Our job as strange, as you know, we're wrong the majority of the time when we make investment decisions oftentimes and it can still work out. So I embrace that. I think the sole capitalists are here, and I think many of them will continue to be a thing for a long period of time, and it might become a new mode in our industry, a bimodal or trimodal situation. But I personally love the partnership model. I love contributing into a brand that is Excel and then passing that on to another group and sharing that brand with our companies. I think you can do that as a solo capitalist. You can do that as a member of a firm with a personal brand. It's plausible, but I think it's tricky. And there's a lot of prickly points around the boundaries and edges that make that more complicated. I think it's easy for ego to creep into our industry and you have to actively fight it as best you can, in my opinion. And I do think like for us at Excel, companies are Excel companies. We all help all of our portfolios best we can. If a company that's not something I work with asks me for help, I'll do my best to help them. And I think that's something we love about what we do and we really care about. It doesn't mean it's always correct necessarily, but it's a core value that I personally”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“And the same is true about the brand of the firm broadleaf. I'm very nervous anytime somebody tries to develop an individual brand at a venture firm because I really believe that it's a team sport. I really, really, really fundamentally believe that you need a group and a partnership and it makes everyone stronger.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's a good way to think about it for what it is worth. I think one of the cool things about our business, and I'll speak about other firms, is to not be self-referential, there's a spectrum of different approaches to marketing. Some of the most prominent firms in the world basically do not maintain a website, and other firms have incredibly talented PR people on staff and really think about their product marketing as a goal. And I think both can really work. So I think there's a lot of appreciation there. Another small thing I would say about this is that's unique to me. And I just think about it a lot is I don't want to have a personal brand. There's all these great quotes about, I think Bill Murray said it, something around some people come to me and say they want to be rich and famous. You should try just being rich first because fame is less valuable than you think or something like that along the lines. I think there's a lot of downsides to personal brand, especially as it comes to being part of a team and supporting your founders. I never want to be taking away attention from the founders doing hard work. It's their work. They've accomplished so much. And if even in the slightest people want to do an article about me or talk to me, I'd rather they talk to my founders. I'd rather they talk to the people building the businesses. And any little bit I can do to take anything. I'm always very nervous. And that's a personal thing.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“There are some wonderful people who have accomplished a lot who are on Twitter and are active. And I follow them on Twitter and I'm interested in what they have to say, and I can appreciate the value of the medium. But there's a lot of people who haven't accomplished very much. And they might still be very interesting to follow in terms of learning something new and understanding a new up-and-comer that's interesting. But I get very nervous that many people perceive them to be right, to have ideas that are correct and that preclude them from doing other things.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Guess there's two areas of focus for this. The first part about it is I think a lot of people, and I respect this for them, Twitter is kind of a marketing vehicle as an investor. And so on the one hand, I appreciate that. And I think I get that some people choose to do marketing in that way, and I have no personal problem with it. Instruction is very difficult. I think the best marketing is a great product. It really packs a lot of depth. And if people only know you through Twitter, which is a fantastic medium for lots of things, it's sometimes hard to be more precise and to go into detail, which is perfectly fair. But I also understand why people do it. I think the second thing is just like the quality of the actual dialogue and stuff. Again, this is not a Twitter, but I just don't believe I have that many interesting things to tell people. I just don't. I don't have that hubris. And so to me, for me personally, I can't speak for everyone. I don't know that it would be particularly good marketing because if I pretended to be a potential quote unquote customer of my tweeting, I would think it was terrible. So I'm not going to inflict that upon other people. I also think like, I don't think people focus too much on one of the challenges of Twitter is that these personalities develop, but it's hard to understand the underlying depth of value there.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Source, those are examples, but also things on the consumer side where mobile first audio solutions are easier to build from an infrastructure perspective than ever before. And consumers demand better software experiences. Those, I think, are things that sit on top of this kind of unbelievable wave where software is just making everything more efficient in a dramatic, dramatic way that I think most people still dramatically underestimate.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Sans the reason of software is so valuable. The people building it are probably quite valuable too. So I do a lot of stuff in developer infrastructure space, but only because it feels obvious to me. And my favorite part is when I talk to a lot of other people about this, people doubt it, or people find ways to say it's not software developers making purchasing decisions or things like that. And I'm thrilled that they think that. But I look around at all of my friends and who run big businesses now and how they made their decisions. And the founder probably was a software engineer more so than ever in the past. And they made a decision to pick AWS or pickstripe or pick twilio. And it turns out that builds a really, really large company. So yeah, my core thesis is boring at software, even from a consumer perspective. What do faster networks and software enable? Netflix was a great example of this where I've had the good fortune to hear this story from Reed. He kind of always thought Netflix long term would be a streaming video player. But in the mid-90s, when they started, that was not a technologically feasible option. But it's also why he was so good at transitioning out of the disc business and into the streaming video business so quickly because he just been waiting for that moment. Yes, I'm very bullish on software. That's kind of the core thesis. And then I derive other areas of focus from that, like developer tools, infrastructure, open.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I try to have a very small number of theses that I think are crazy obvious. So I'll give you an example of this. I'll give you two examples. But really, one core example, which is largely my investment thesis of my career so far, will be for the next 20 years. I'm really bullish on software and not software like the category software that sells just to businesses, but literally actual software, which is communicating information via bits over networks where it approaches the speed of light. I'm like incredibly, incredibly bullish on software to an incredible degree. Some people think they're bullish on software that software is taking over, and then they fund massive enterprise sales teams. I think those things can be very effective, by the way. But logically, if you really believe on software, one area that's likely to be disrupted is the traditional sales process. It doesn't mean you can't also make money invest in the traditional sales process. And we've seen this, by the way. We've seen a lot of companies that their growth ratio to their investment in sales has massively gotten more efficient. Dropbox, Slack, Zoom, Stripe are examples of companies, AWS, massively this way. So that is like my one core thesis of software. Now then there's derivatives of software, which is, well, if you”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Market. And so a lot of markets, when people think, oh, that's new, it's interesting, that's actually not when you make the most money as an investor. You ought to make the most money in the second or third or later of a market because all of a sudden the market gets much larger and bigger. I mean, the logical version of this is just the internet market where people made a lot of money in the dot-com boom to an extent and then obviously that trunk. But what's happened in the last 15 to 20 years in the market, it turns out the internet market in the last 15 to 20 years has been orders of magnitude larger for market cap creation. So that's a good example where like you'd much rather be better than the second phase in the first phase just from a pure outcomes perspective. So mostly I'm very nervous about market timing. I'll still engage in it if I think something intrinsically is beloved by people. But I'm much more wary about believing I know something other people don't. That's strikes me as terrifying. And I think a lot of investors nowadays, that's like the forbidden fruit of being an investor. It's why so many investors tweet so many things. The honest truth about all of your questions about life is I don't know. I'm trying to do my best. But market timing is often a symptom of people really thinking they do know best and they're short about it and they make an investment. And I think that sign of hubris is more”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Ideally, just like you, I'd rather not take the risk, but I'll do it sometimes. This is a good example of where I think humility in our profession is really critical. I think the biggest risk around market timing is when an investor thinks they are really good at market timing. They think they know this is the time. They think they know something other people don't about timing. On the one hand, if you're correct, that can be quite valuable. On the other hand, I'm very wary of any line of reasoning by an investor that is I'm smarter than other people. Any one particular thing, I think that's very unlikely to be true in the broad context of it. There has to be one smartest investor somewhere out there, right? But just like I mentioned when I look for founders that are capable of being intelligent but don't have to use it, I think the same issue of investors. My dream, I don't think I'm that bright, and I certainly don't want to rely on having investing theses that are completely rooted in being the single smartest investor in the world. That strikes me as a poor strategy. And I think a lot of market timing investments are around that, that you really believe in something. The other thing I do at market timing is certainly Apple as a company epitomizes their products, but a lot of markets, it's hard to understand the abstraction.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Are they capable of working hard? The same thing is true. I'd rather a lazy dumb person who builds an incredible company, but it's nice to have the option of a great work ethic. And then the fourth thing is can they multiply, which is a lesson I really learned from Dropbox, but it's great that I like you. Can you attract other people? Or do I think you can attract other people? So that's what I'm underwriting the team. The second big thing is market. And I really look at two things. The first is, is there some story I can tell? Ideally the founder can tell it as well of how big this thing is on an absolute scale. And the second one that I think is really critical and maybe is something that YC really drilled in is like, do you have an efficient initial insertion? I think there's lots of ways to fund a company. One way is certainly venture capital dollars, but another way that would be great is customer. Whether that's revenue or it might be an open source project where you have a large community, something like Strappy when we backed it. And so I think what I want to know is, do you have some search that works since that people get to experience and love”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll give you an answer I give a lot of people when they ask about how I think an investment that addresses these two things. So I try and focus as early as I can on any investment. So it's just getting started. That's my deal zone. And I tend to look at what I facetiously say as two and a half things and there's sub bullets at venture capitalists. We like to hear ourselves talk, so we always have subtitles. But, you know, the two and a half things are people market and then how it's gone lately, how it's gone so far given time and money. And that's a half, because to me, it's more of a debugging mechanism to prove that maybe I was wrong in my underwriting of the people in the market. But I really don't lead with that. I'm happy to come back to that in detail. But on the team side, I think about kind of four canonical things. The number one thing is do I like this person? And I think the key thing there is like, do I want to help them? There's a lot of ways to make money backing people you might not particularly like. And I effectively will forego those. And it might make me a worse investor from a peer returns perspective, but I'll be a lot happier. And I think over time, it'll prove out to be a good strategy. So do I like the people? Do I want to go to work for them and help them? Number two is, are they capable of intelligence? I'd rather they didn't have to use it. I'd rather they could be dumb, and it still is a great business, but it's nice to have the option of them being smart. The third thing is...”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“At a wonderful brand firm and be able to help companies so much. I think a very liquid market where things move quick tends to bias towards market leaders over periods of time. So far be it for me to complain. I imagine it's much harder for a lot of the newer entrants to the market. So I try and always remember that I'm still quite lucky.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably try to be as then as I can about it. I'm sure you feel every day. We can't always as an individual or even as a firm or even as a group of people have an impact. The market is kind of what it is, which I think is a wonderful thing in this context. And if you ask me on an absolute basis, has pricing gone up, I would say that's probably true, has time to do a deal gone down. I think that's probably the case. At the same time, I think at least right now, we're seeing more great companies being created and growing bigger than ever before. So I try not to have opinions about the market. I just kind of try and focus on what I'm doing, my little slice of the world and what I can control. And so I probably look at the market today and I focus more and more on building deep relationships with founders over long periods of time, well before they even start a company, and then backing them for some product has taken off in the moments where I do want to back a company that has momentum and wants to run a process. I accept the reality that maybe market pricing is higher than it has been. But it sounds odd, but I kind of just feel like I'm a buoy or a surfer floating on the ocean. And I would say, again, tangibly, the data points bear out your saying, but it doesn't really bother me so much. I mean, if anyone's going to benefit from this, having the opportunity to”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“What are you working on? Just casually as friends do. And that person kind of almost looked directly at me, silently realized I was a venture capitalist, then looked back at the other friend and said, I'm not really comfortable talking about it right now, but we can grab coffee sometime. So I think that's probably the biggest thing is actually more on a personal level. I appreciate that even my friends sometimes there's things I don't want to share the venture capitalist at any given time, but as a human, it hurts. Now look, I have a great life and everything's gone fine, and I'm not going to complain too much about it. It's just kind of the price, but I have a lot of insecurity about my place in the community and that I'm always going above and beyond to be contributing in a positive way. And even then, you still encounter these moments that it's meant day to day that deserved on behalf of my industry of doubt and distrust. And so I spent a lot of time on that.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“What are the lessons to learn? I mean, everywhere. I can't. I'm a short bald guy. I have a lot of insecurities. I think honestly I have insecurities about virtually everything, whether I'm making good, underwriting, and investment decisions, whether I'm doing the best I can to win a deal and what makes sense. But I think a lot of them are about how I work with founders. Am I doing right by them? Am I doing the right thing? I'm very sensitive to that because I think it's the core of our job. And you can never do it perfectly. Anyone even meaningfully trying to do their best is going to find moments where nicely disagree with people. I disagree with my wife, my family members, my best friends all the time. That's okay, but you just always want to be doing better and better at it. I will say one thing that is maybe somewhat unique having grown up in the founder and technical engineer community in the Bay Area is that most of my friends are founders or employed at tech companies, like overwhelming they have been for a long time. And I have a lot of probably insecurity about those relationships on a regular basis. You know, the example of this that I always think about is a few years ago, I was at a friend's house who was throwing a modest party, probably about 50 people or so, and I was with my wife and a bunch of people we've known for a decade in our friendly with. And I was in a conversational circle. And one person asked another person, oh, I heard you left X company.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Living. And I witnessed companies where I'm trying to do my marginal best, and the company's doing extremely well, and I like to think I'm helping somewhat, but I'm not the be all end all. I'm not the difference maker. A small team of great people highly motivated in a great market can do a lot. So I think I learned that a lot. I also just learned a lot of the tactical things of working at a company. I think we all like to believe if you haven't worked somewhere, you kind of have this theory of how things work or should work. But you realize everything's a lot messier than you realize. Learning how to incentivize teams as part of a fast-growing company or learning how to understand why everyone does what they do, Dropbox was kind of a masterclass in that kind of a thing. And it really accelerated my learnings. And so that's important. The other thing I learned though, by the way, was that Dropbox is somewhat unique. It's not 100% unique, but a lot of it's unique. And the last thing any founder or potential founder I'm going to work with wants to hear about is everything going on in Dropbox. So I try and learn some things from Dropbox, but I'm always looking to learn a lot from companies. And I take that Dropbox experience of how I learn and what I learned and apply it to other businesses. So even when I'm not working at a company, like how would I think about a Slack or a scale or a Mux or a Readme or in the context of what would go on in a place like Dropbox?”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“I think almost all of the best lessons I've learned are effectively lessons of humility, like learning about what I don't know. And so I joined Dropbox and it was 2012 when I first joined. There were about 200 people, but the company was already kind of a juggernaut. It had been incredibly successful. A relatively small group of people had built this amazing thing that had begun to grow rapidly like a weed before I even joined. And it was just an incredible place. I tried very hard. I thought I was a reasonably smart person. But the power of kind of a product that people love and of an incredible early team was really proven out of Dropbox. Everyone after that was incredible and wonderful for people, but a lot of the core value of Dropbox was built by a relatively small group of people early on. And so you kind of get out of your own head where I think a lot of people want to believe they make the difference and that they as an individual are so important. And I think people matter. Individuals can accomplish a lot. But great products and great teams are just an incredible sight to behold when they're working. And that humility is really important as investor. I don't know is the answer I give to my founders the most. I don't know the right answer. I can proffer advice and try and be helpful, but I'm not in the arena. I professionally give away money for a”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Hopefully, a somewhat modest way. I think there's opportunities to be better than replacement in the venture community to help the people I want. And so I came back and I said, how can I do as much as I can to help this community of people who are brilliant, smart, hard-working people just trying to make their debt in the world from this unique perch in the venture community? And it's been awesome ever since. But I never think about myself too much as typical investor. Let's not say I'm not. I acknowledge that I am and I care deeply about that being a good partner, doing right by RLPs, but always start from how can I help founders. Even founders not in my portfolio as much as possible.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Those were some of the reasons that Excel was excited to have me back as a principal and then ultimately a partner leading deals. And so almost at exactly two years again, this time I took time off. I took a month off in between jobs and then I rejoined Excel in January of 2015. I don't think about the job so much as tactically what I do, in this case investing. I've always thought like what do I like? And perhaps selfishly when I first came out to Silicon Valley, I was a young technical person trying to figure out what was going on. And there was a lot I just didn't know. And when I went through Y Combinator, it was clear there were a lot of people in the same boat as me doing that, I joined Excels and Associate, same thing. It was always how do I help this group of people who are just trying to find their way, who are such productive, amazing people, and they want to start companies. And I think that's just a powerful thing. How can I help them? So even when I went to Dropbox, I was working on our developer APIs, helping power products like Envision, like OnePassword, Notability that were built on top of Dropbox as they were building a business. And that's what I loved. I always preferred working with a small company, doing something interesting. And so coming back to Excel was kind of a natural cycle in that. I think venture is an important part of the entrepreneurial journey, whether we all like it or not sometimes. And I think candidly,”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Help it all with it. I didn't want to put them in an uncomfortable spot just in case I was leaving too quickly, but I started talking to people at Dropbox. Ultimately, that worked out at almost my exact two-year mark at Excel, I ended up starting at Dropbox. Did that for a couple years and I loved it. It's an incredible company to be at. I got to see so much. It really informed a lot of how I think about the world. And then a little over a year and a half into my time at Dropbox, I've been keeping tabs with the Excel folks. They've been keeping tabs with me. And I always had a mental respect for what they did and we started to inquire as to whether or not I'd want to come back. And the honest truth was I was a terrible associate. I mean, I can't stress this enough. I got in shouting matches with people much smarter and more thoughtful than me. I didn't really want to spend my time sourcing in the traditional sense. I kind of wanted to do my own thing. I wasn't a great team player, which I think was a really important aspect of being an associate. Just didn't appeal. And so I had a lot of trepidation about going back. But incidentally, the people that excelled to their credit, I think were excited about having you back. And I really did like and respect all the people there. We got to talking about the role and it became clear to me that was a very different role than having been an associate. And as different as I was and as bad as I was as an associate.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Demo day so that we could continue to fund the company and work on it. But nobody really knew much about it, which is what led to that FUD. And so I thought to myself, well, this is great. I need a job. I can use the money. I'll be able to learn a lot about the industry. And it's a great place to figure out what I'll do next. And at the same time, I'll be able to help my friends understand venture better because I don't think it can be as bad as everyone had thought. So I joined Excel. I think officially in October of 2010, and I had to go buy the time dress codes for tighter adventure. So I had to go buy khaki pants and dress shoes. I remember going with my now wife to do it. It was just so odd. So that's how I joined XL the first time around. And Excel is a great place. And there were a lot of interesting challenges there, but I never really thought about it as the long-term thing for me when I was an associate. I think there was nothing wrong with that. I think most associates end up going to do something else. And for a variety of reasons, it wasn't actually particularly good fit for me, particularly as an associated Excel. So a little after a year, I started thinking, what would I want to do next? And Excel people were very good through the process. And ultimately, I decided I wanted to try and work at a company called Dropbox, which I loved. I loved the product. I knew some of the early people. And incidentally, Excel happened to be an investor at the time. They didn't actually.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source
“Honestly, I never envisioned being a venture capitalist right before I joined Excel the first time around in 2010. I had founded a company called Chardio and went through iCombinator. And candidly, I was a terrible, terrible founder for a variety of reasons. I ultimately ended up leaving the company. And as part of that, I hadn't been paying myself during the summer back then. YC gave us $17,000 for the summer, and I had no savings. So I was broke. And when I was at Chardio, I had had the good fortune to meet a guy at Excel named Kevin FRC. And I liked him and he liked me I gather in hindsight, but I didn't think too much of it. It wasn't going to fund Chardio. And then all of a sudden through the grapevine, after I'd left Chardio, we reconnected and he kind of inquired, hey, have you ever thought about doing venture? And the honest truth was not particularly, I mean, as you might know, I think the default posture of YC companies and founders is a little bit of fun, fear uncertainty and doubt about the venture community, which I think is merited in some cases. And so I had never envisioned doing it. But candidly, I really needed the job and I really liked Kevin. The other thing that was interesting about it was when you were in Y combinator around this community of founders, Venture Loomed. It was this really important aspect of our lives, like raising money after.”
2020-11-12 · The Twenty Minute VC · 20VC: Accel's Dan Levine on The Current State of Seed & Series A, The Rise of Pre-Emptive Rounds, Solo Capitalists and Multi-Stage Funds Entering Seed & Market, People and Product; What To Prioritise? · IDENTIFIED FROM THE TRANSCRIPT · source