YouSaid · the spoken record

David Tisch

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2024-02-05
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2024-02-05
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  1. “I think the space eye of conviction that there will never be efficiency in is the seed market. Because starting something is not efficient. Starting something is messy. It's ugly. It takes blood, sweat, tears, it takes vision, hunger, dreams. And if you are a founder with a thought, a dream that you wake up with, getting going is the only thing you think about, not the efficiency of the financing market to allow that to happen. And so I truly look at the future with optimism. And I don't think people are going to stop dreaming. And I don't think ideas are going to stop coming.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I think 10 years from now, the bigger firms are bigger. There are, in many ways, less big firms. I'm not convinced that that dramatically impacts the way that the seed market looks in that a 10 or 50 or 100 million dollar fund betting on the right company can be an amazing financial return. And until there are no seed rounds, which I don't think is the future, I think the seed market will still be up for randomness. And it doesn't mean that randomness is easy or randomness is predictable, but I do think that the seed market looks pretty similar and that the multistage firms are permanently part of that.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “We will do an on cap safe. We will catalyze an uncap safe. Yeah, I don't think my job is to have stupid rules. I think my job is to invest in the best companies, in whatever mechanism possible.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Very much. I think a deck or a product is a way that a founder can articulate the thing in their head. It takes the idea and puts some picture around it. And I think it's really valuable to understand thinking.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “And the amount of deals that we've, so back to what have we screwed up, if I looked back at the quality deals that showed up in our inbox that we missed in that, like, and sometimes we see it a year later and it comes through a warm source and we're like, oh my God, it was sitting there like this is an interesting deal. Or like this was sitting in our cold box and we screwed it up. That's happened. And more often than I would assume.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “I would take your question and reposition it. Is it important for founders to understand the competitive landscape of what they're working in? Yes. Is it your job to be the first informer of some random two-person startup? No.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “On TechCrunch? Yes, on tech. You should read TechCrunch all day and then just forward out the articles to the companies that are relevant to that article. That is super valuable.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Nope. I think they have answers. They're like, I spent 42 minutes this morning reading an article that I'm going to forward you that you're obsessed in this industry for the past like seven years. Did you see this? And please respond to me with what you think. It's like, thanks for your help.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “They do all this stuff, and you're like, just get out of the way. The company's either going to work or not work. And you are not the reason for either of those two things. If anything, you're the reason it's not going to work.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I think that the biggest misalignment is that most VCs aren't good. All VCs aren't created equal. If you take money from a not great VC, there's going to be this enormous misalignment.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “If you go back to the power law inventor, most VC funds will fail. I hope ours doesn't, but most will. I operate every day under the panic that the investment we make tomorrow is the ability for our firm to continue to succeed in the future. If we aren't willing to understand our vulnerability in the power law dynamics of venture, we're in trouble.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “But HubSpot was right before that outside impact. And again, you're talking about the single best or one of the five best investors in the world at this asset. Again, back to where I said, there's a handful of people inside of a handful of firms that can move needles. Outside of that, I don't think that the outsiders have this magical impact. And later on, they can move bigger needles than earlier on. The seed creation of a company has to come from a founder. There's like random examples of incubations that you can try to apply value to the investor, but that was a founder. It was still a founder inside of that incubation that actually was the reason it worked.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “It's a friend. I think the best versions of those relationships are back and forth and not one-sided. Do I believe in coaches at a scale? I think that word coach can be friend, shrink, a variety of versions of that. Like, do I think that coaching has helped CEOs get Employees one through ten, 10 through 100, and the founders. That is what will make or break a company, the investors, the outsiders, the advisors, the mentors, the coaches. That part of a company building is an amplification of what's naturally being built internally.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I don't believe in the word coaching or mentors. I believe in relationships. And I don't think that you can take these hierarchical words and apply them to relationships.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I don't think outside of the top 5 to 25 VCs individuals that VCs can magically impact a company. Most of those investors join your board at series A or B, those 5 to 25, whatever the number is. And the rest of the investment sort of world is a commodity and probably a negative. I think founders view too often the person that is willing to lead the deal as potentially good versus potentially neutral or bad. There is just like a handful of people that are magical and everyone else is totally fine and is just money.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I don't think the word signaling is the factor there as much as it's like somebody needs to decide that they want to underwrite this next round. And whether that's an insider or an outsider, I don't think those two things play as tightly together as the word signaling alludes to.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “If a firm wants to do a deal, they're not asking that question, they're doing the deal. If a firm wants to do a deal, they are going to move, if you have a multi-stage firm on your cap table that can lead your next round. And a new multi-stage firm shows up to explore your next round. Very rarely are they like, will you get the answer from the other firm before we make a decision? Because if you do that, you will lose the deal. And so there is a speed and aggressiveness factor that has changed the way the market operates in these follow-on rounds that I think has removed that, again, outside of a company being in market for too long, at which point all these factors play out.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “I think that stopped five plus, maybe longer ago, because I don't, I think the market moves quicker. And I think that everybody is panicked that somebody's going to get to the deal ahead of them. And they're not going to get that perfect information.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “But again, that's your example A of good company, Sequoia leads the C, they want to preempt the A. That's in the top decile or quartile bucket. The bottom half, let's call out as irrelevant too. It's that second quartile. Again, I don't think there's perfect information. I just don't think anybody's existing investors think until a deal is stale. Until the deal has been fully in market, fully went out to raise around and it's obvious that the existing investors are not saying yes. That is when signaling happens, but that's a failed fundraise or a challenge fundraise, which one part of that is some version of signaling, but that's well after the actual signaling is sort of relevant.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “No one expects the multi-stage fund to do all their Series A's if they bought enough in the seed. I actually think that's the perfect stage where signaling is irrelevant and not a factor. Benchmark does a seed or they incubate something. Index isn't calling benchmark and be like, how is that seed doing that you did? And the founder is not like benchmark passed on our A, are you willing to do it? It's this lack of perfect information that everybody's operating on. Everybody wants to move quicker than their competitive said to get ahead of what they have convicted themselves to believe is a deal they want to do. Nobody's calling each other. Signaling doesn't exist.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Kind of, Andreessen doesn't pick up the phone to a Sequoia-led Series A and be like, hey, Sequoia, what do you guys think about this deal that we're maybe going to preempt the B for? So a stale deal, a deal that's been in market that's went to market to try to raise and fail to raise has a ton of issues. If you want to label that as signaling issues, that's just a misplaced word.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “I'll give you a fun soundbite though. I don't believe in signaling. I think it's a fake word and I don't think it exists in this market.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Have no favorites, and internally we don't view anybody as other than equal. No, I think you can name buckets in each of those categories that are of quality. And on a given deal, they're all relatively equal. And I think we like working with a lot of people at each stage. I think the second tier VCs are uninteresting. And I think the third tier VCs are harmful. But I think the best ex-firms at each stage are good enough to not need to overly rank them. But I think the second and third.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “I think there's a power law dynamic adventure that is very hard to break. And I think the best firms will continue to be the best firms until they are suddenly not mostly on internal errors and unforced errors. And it's not that challengers don't emerge. I think there are some great firms that have started in the past 10 years to challenge the establishment. But I do believe that the best firms remain the best for a long time.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “I answered this with a specific answer on the stage once, and the founders got furious that I named a name and I thought it was a compliment. I thought it was like, I screwed this up, what a mistake, and the founders were pissed. I don't want to just avoid that because I don't want to not bother somebody. It said to what Terence said, like the nose that look bad today might not be wrong tomorrow. So I literally try to wake up every day and find myself in that zone of clarity to get the picks right. And we screwed up something in the past year and I don't know which one it was and how many. And those are the ones that haunt me.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “A new fund manager, my advice is have a reason and a vision. Why are you doing this? Why are you starting a fund and where's it going? Because if fund one is the vision, define that. If fund one is not the vision, define that. And so you don't just do this because it's easy to do because it's not easy to do and the timeline for ROI on this business is egregious. And so have a reason and have a vision.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Investors invest. Our job is to say yes, not to say no, and our job is to communicate that decision to a founder in a transparent and quick way. And our job isn't to waste people's time and our job isn't to mislead people. And I think as I've looked at this business for years, there's people that come and go that are just wasting founders time. Our job is to not waste their time. And our job is to give them money and get out of their way until they ask you to do something, at which point you should try to do it as best as you can and as quick as you can with as little friction as you can. And so my job as an investor is to invest. And to give people money and do what they ask me to do.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “So every day the panic that we have is are we seeing things and are we understanding them? If you don't understand them, you're probably not looking in the right places to see them. And if you see them and you don't understand them, you're going to miss them. And so it's this very complicated start every day from scratch in this business. I think the one thing that does matter and help is at network compounds and brand compounds. When I look back, founders that we backed 15 years ago, five years ago, two years ago, if we build that great relationship with them and they're willing to send us their friend who's starting a company, those things matter.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Keeping yourself relevant. And I'm old. I need to understand what's coming and what's coming today is different than what was coming yesterday. And the spaces that technology impacts and software ate the world. Is hardware eating the world? Is software and hardware together eating the world? Is AI eating the world? How do we compete in AI against experts? How do we compete in science? How do you compete in all of the spaces that we as a firm spend time in? How do we understand what we should be excited about and what we shouldn't? And how do we get into the next network? I think the next network of great founders exists somewhere and our job is to find that network and be relevant in it.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “Does it make sense? Sure. I think if you believe that is the outcome size of that company and there isn't another 10x or 5x on the table, sure. But I think Deterrence's point, the compounding at the end is so much more valuable than the compounding at the beginning. The path from zero to one billion is impossible. The path from 1 billion to 5 billion is more predictable and it's more easy to see at a given moment. But do we like fundamentally reject the idea of ever doing a secondary? No, but I don't believe our job is to figure out how to hack the system. Our job is to figure out how to back unique outlier long-term generational companies. And if you look at the time that it takes to build those companies, you have to stick. With it short until the end.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “This is hard. It's all hard. And you have to figure out creative ways to do that. And if that means you have 30 cents, 40 cents back on a dollar of a company that shuts down early, you deploy that. If you're spending your management fees in the back end of your fund, that's another way to do it. But I think one is sort of figuring out how to get as much money of the fund into companies. And at what point do you say we've deployed enough initial dollars that we should switch to sort of the next fund? I think that that is really hard in a scaled model. I think it's much easier when you say we're going to fund 30 companies. We're going to reserve one-to-one. So the math is very straightforward. For us, it's not as straightforward. And I don't know the right answer. When I think about reserves, I would say over-reserving is the bigger mistake than under-reserving.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “I think the hardest part in an early stage model is when to switch funds. How much of the fund should be deployed into initial dollars versus how much of the fund should be saved for reserves? As a fund manager, our goal is to invest as much money as we can into companies versus into management fees. And so if you take a $100 million fund just to make the math easy and you have a 2% fee, $20 million of your $100 is management fees. And so if we only invest 80 of the 100, we don't have enough dollars at work. Our goal is to get 100 or 110 or 120 million dollars of that hundred into companies. Yet its seed recycling is going to happen at an egregiously later date. How do you figure out how to get that extra 20-30 million dollars back into investments? I think that's really tricky. And so that's one.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “Market fit, how to get revenue, how to get traction. You want to sense that they are moving towards that great opportunity. And you want to sense it before an outsider realizes it or other insiders realize it. Do I have many examples of each of those cases? Yes. Can I figure out what the next one looks like because of the history? No, I don't think you can. In our seed portfolio, we have about 150 companies. I truly don't believe in pattern recognition at scale. I think there's nuanced pattern recognition, but I view each one of those companies as an individual relationship, as an individual journey, as an individual idea, in many ways an individual market that they're operating in. And we have to understand the nuances of each of those factors, of each investment we make.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “I think our strategy on reserves is to try to put capital into companies right before the market realizes how good a company is. Is that easy to do? No, but nothing's easy. And so all of these questions and answers, the goal is to take everything and make it a soundbite and take everything and make it a tactic or an easy to learn lesson. But it's not. It's this nuance. So a company and not every story is that. Not every company takes a long time to figure itself out. Some companies start and they just work and they work from the beginning. And yes, there might be a hiccup later on. But the path from seed to D actually might be smooth. You should probably lean into that company if it's a great one. Equally, the company that raises a seed takes a long time to figure out how to get product.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “I don't think anything makes this job easy. To me, it gets so muted in people looking at what venture capitalists do from the outside and assuming that there's this endless set of opportunities, there's this endless set of access that you can just get into this game, run to what Terrence said, the generic playbook of 30 to 50 companies, high ownership, reserves, follow-on, and you're suddenly going to be great and have magical returns. Just like the company side of it, there's a power law dynamic on the venture side of it that needs to be accepted and understood. The best firms in Venture have the highest probability of being the best firms in the future because brand matters, the quality of investors at that brand matter, and they're going to see and win better than the challengers are.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “We want to put money into the best opportunities that we can in a given fund cycle. If it means we're slower to deploy our follow-on fund in a given moment or we're quicker to deploy it, I think those are the variables that we can control. Our job is to get as much money as we can into the best opportunities.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “Our job is to make great decisions with every check that we write at each step of the way. And so is everything that Terrence said inherently accurate to a good level? 100%. But it doesn't mean that you can't be great at follow-ons. It means you have to be great at follow-ons. If you have capital that needs to do follow-ons. And so our job is not to say fundamentally we don't do this. And our job is to say structurally every time around comes together, we're saying yes. Our job is to, from a like, LPs give us money to deploy into companies in a way that gets them the returns that they expect. And for our business, our job is to generate the best returns we can get. And so from our Opportunity Fund, our follow-on fund, A, it slants early. We don't want to be growth investors. We want to be venture investors. And so.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Building on what Terence said, his requirement is picking the right founders. So I agree that they win on seeing and they win on winning. If Terrence Picks bad pickers, the model falls on its face. But Terrence picking great founders actually makes the model, as he said, beyond a standard deviation better than everyone else's model. And so I don't think all founders are inherently great pickers. And I don't think all founders are inherently great investors. I do think all founders see better than investors do.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “Do the job, those are really important holds to allow that equilibrium, that Zen to happen. If we instead every fun cycle changed our strategy, changed how we operate, where we invest, like the style of investing, you have no ability to actually get better and to try to find that zone of clarity to make investments from.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “I think it's way beyond that, and I think you bring up a good point, right? Like someone's individual mood on a specific day, the weather, the political climate, all of those factors go into gut. And if you cannot find Zen, some focus, some operational place that you are making clear-headed decisions from, you are likely going to be on tilt to use a poker analogy and bad decisions will happen. And so if I look at the firm, we have again nine of us, I believe the job is to try as best as we can to all of us on a daily basis operate in some form of evenness. And I think that's really hard. But when I look at box group and I look at the evolution of what we've built here, staying consistent to where we play, to how we play.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Look like other than probably like Vinok Kosla, he probably knows the answer or someone like that, but we don't have perfect answers. We don't know the future. If you knew the future, you would be higher percentage correct than any seed investor is going to be. And so the more that you allow for negativity to creep into conversations amongst the firm, the I think less variance you will have in outcomes and the safer you will play. And I don't think that that model works at Seed.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “We structurally push our group to not allow that. We have vocabulary internally. We say like throwing a grenade. You're not allowed to throw a grenade on some deal. It doesn't help. If you come in and you just have this loud no, everybody who is excited about it, the level of pushback that you need to have to say, I hear that grenade and I reject it and I'm still a yes. I don't think that's where the best decisions get made. I think that's where group decisions get made, especially if you have a firm where people have been around longer or if people are newer or if people are thinking about harder, newer interesting spaces, this gets challenging, right? Like AI. Nobody knows the answer to AI, like how the market plays out, where the value gets created, what the best tenure out companies.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “Talk about things. We don't vote and we don't look for consensus. Not everybody is equally ramped up onto each individual company such that their voice is valid. The easiest thing to do at seed is find a reason to say no. You name a company, you give me an idea, you give me a market, I could tell you the 32 reasons why it's not going to work. That's not the job. The job is to squint and see the one reason it's going to work and say yes when it matters. And the yes is so much more important than the no. The cost of omission at seed is so much more expensive than the cost of commission. And if you say no to the wrong company, you blow your returns. If you say yes to the wrong company, it's a rounding error in your model.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “People outside of the room, founders, we do that in the same room in some way, but we're still distributing the gut to the individuals at the firm who we think are all of us capable of making a decision.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Don't operate our firm in a way that we actually try to extract that sentiment. The people who are spending time on that deal should make that decision. By people, I mean one or two people, that's great. It does not need to operate at a firm level. I think seed investing, to Terrence's point, cannot be about consensus or groupthink or safety. It has to be on the edges. Everyone on our team thinks about people differently. We think about spaces differently. We get excited about different things. And my job at Box Group and our job at Box Group is to have people here who we believe can make great decisions. Terrence takes that model and in essence runs the same thing. He just does it. We're not going to talk about it because it's a secret. So I don't want to touch on it. But Terrence takes that decision making and distributes it to other people.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “Don't know who you're provoking because I fully agree with you. We're a team of nine. Everyone on our team can say yes. Everyone on our team can say yes in an individual meeting. We don't vote. We don't try to find groupthink. It has to operate in your gut. And if we meet this magical founder and she just left her job at a different company, she's coming out of university and my partner Nimi Adam or Greg meet them and they get excited or if Adina Claire on our team meet them or we have two Claire's, which is low probability on a nine-person team if Claire or we have two junior people on the team, if they meet somebody and they get to this level of conviction, I want to listen to that more than I need to sort of find a way to get group think internally. I think it happens at the edges.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “Out the results of your picks for like five to ten years. How do you wake up tomorrow and do work to be better pickers? You can be prepared in markets. You can be prepared in the businesses and the types of businesses that you're trying to fund. So I come back to it of like can you build relationships that you get excited enough about to say yes because somebody comes to you with their dream, presents it to you, you say that is magical. You get this feeling of a human that shares with you what they're thinking about and you're like, you are so sophisticated and deep and passionate about what you want to go build that I have to say yes. You've gotten me as excited as you are to go build this company. I'm in.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “So CPIC went. You have to see it in order to pick it, in order to win it. Seeing it, the earlier you see a founder, the better your relationship is when that transactional moment comes into play. And so if you can meet people before they're starting a company, before they're thinking about starting a company, if they're at a university, if they're working at a different company and thinking about starting one, that is the best time to meet them and to build a relationship that you can have conviction when they do show up for that transactional moment to say yes. I think that is the essence of seed investing, the hardest part is getting exposure to founders at a scale that allows you to see in a given year, in a given fund cycle enough of those potential great opportunities, the pick, I don't know how to get better at picking when you don't find”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “And then text shifted from a vertical to a horizontal. So the types of businesses that venture an early stage tech venture capitalists were funding fundamentally expanded at a huge level too. So to what Terrence said, we had in 2010 through again like probably 15 real scaled coverage that today is a fraction of that.”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “Yes, very valuable. That's why I'm here doing my own content marketing. You're going to take this, you're going to summarize this into a 30-second TikTok. We're going to go viral and I'm going to get the next generational companies to come to me because we made a great TikTok”

    2024-02-05 · The Twenty Minute VC · 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan · IDENTIFIED FROM THE TRANSCRIPT · source