YouSaid · the spoken record

Jerry Neumann

lines on the record: 70
first: 2023-11-07
most recent: 2023-11-07
sittings or episodes: 1
sources: podcast

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

“Oh, yeah. I mean, I spent my first half of my career, well, maybe a third of my career now that I'm old, but it was working for big companies. They never let you forget that you're just a cog in the machine. And the last thing in my life I wanted to be was a cog, right? So when I went on off and worked for myself, hasn't always been easy, hasn't always been a ton of money coming in, but I never once considered going back to work for a big company again.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting to me how people have misunderstood some of the things we've said, or people have taken from the book what they wanted to hear. So Liz forwarded me an email of how I found her center and said, oh, thank you so much. I never knew that I could negotiate away preference. Do you think there's a lot of education to be done? I'm a believer in this project of people going out and starting companies and working for themselves and building things. And I think it's really a driver for everybody VC says as a driver for innovation. But more than that, I think it's the best way for any individual to self-actualize, right? So I really want more people to be able to do this. And so I'm interested in trying to figure out how to make it a better career path for people, being founders, for everybody.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“But the thing that I thought at that time when I left that company was, that's it, I'm done. Nobody's going to hire me again. Nobody's going to give me money again. Nobody's going to do anything with me again. I'm just disgraced. And that turned out not to be true at all. I mean, literally two weeks later, one of the investors in the company, not somebody who was on the board, but one of the other investors called me and said, hey, I need you to come in and consult with me on this company. They need some help. And I went and did that and they had lunch and they're like, okay, so what are you going to do next? Like they wanted to invest in my next company. I'm like, I just got fired from this company. It's just not like that in this world having the experience of going through it is so valuable.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“We were kind of like, well, maybe you should work from home. Like, no thanks. I'll keep working from here. They're like, well, maybe you should work from home. Like, nah, it's all right. I'll just work from here.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the things that I like to tell my students, I teach a class on entrepreneurship is that failing at a company, if your company fails, you haven't failed. Starting a company seems risky, but it's not that risky, right? I mean, I started a company, I was a co-founder of a company, we raised venture capital, my board fired me, and I was escorted out of the building because I was intransigent”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's true. The reason that they all vote as a block is because they've talked about it beforehand. This is a great scene in the book about Twitter. Can't remember what it's called, hatching Twitter or where the VCs go and have breakfast and discuss what they're going to do. And then the CEO shows up and they fire him, right? Because they've decided beforehand amongst themselves. Shouldn't be surprising that that happens.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's true. I mean, I think probably at least a third of my conversations are with other VCs and not about anything specific, but just generally, because there's a lot of deal sharing. If I invest in a company, I need other VCs to invest after I do. I need people to come into the companies I invest in. There's a lot of do you know me? Do you trust my opinion on companies so that you can put money into them? And I think that carries over into the board, right? I'll work with you again, Liz, and I'll work with any of my founders that is done well again if they want to, but I'm certainly going to work with these other VCs again. That certainly affects my decision making. I don't want to piss them all off. Well, no, I have with this book maybe, but...”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“It definitely depends on the time. It's actually more fun when I got to invest with other people and I'm a solo investor, so it was nice to have other people around the table.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Depends on the time, right? So when I first started investing again about 15 years ago, everything was done in a syndicate, right? So I'd find a company, I'd bring other people in, and I have to do that because I'm a small investor. But bigger funds would find an investment, they would bring me in. They'd bring in a whole bunch of people to help bring in different expertise. And also it was a way of risk sharing, right? So if you're doing half the round and you can then invest in twice as many companies, right? So you're sharing, you're pooling risk. I think there's also a certain amount of I believe in this company sort of, but let me pull in somebody who actually knows this market and see if they believe in it. And let me pull in the people who are most likely to bid against me and have them bid with me so that we can not have to compete to get this company done. That was true then, I think, for when money became a bit easier in the venture market, funds decided they needed to own the whole round. And I saw a lot fewer syndication opportunities because people were like, well, why would I bring in anybody else to take part of this round when I could put as much money as I want into it? I'll take the whole thing.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Always an information asymmetry, right? So if the founder is like, oh, I really want to sell a bunch of stock in this raise, my question is always, well, gosh, what do they know that I don't know? I had one founder company was going public and we all had an opportunity to sell some of our stock in the offering. And I said to the founder, I'm like, you're selling any stock? He's like, nope. So I held my stock. And he was right”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“One of my mentors at a previous job, we would buy companies and there would be an upfront payment and the nurn out. And I asked him once, well, how big should the upfront payment be? And he said, well, big enough that they don't worry, but not so big that they don't worry. Okay, that makes sense. And I think for secondaries, I feel the same way. Okay, a little taking some money off the table is great. Taking so much off the table that you no longer have to worry is probably not great for me. As an investor, I don't usually get the chance to sell in a secondary like that. I think for me, it's been particularly difficult because I'm often in the same position or I was in the same position as the founders where I didn't have a lot of money. I mean, I put 80% of my net worth into my business, my investing business, and I was living in a rented apartment, and they're taking money out to buy a house in some fancy suburb. I'm like, great, I'm still living in my apartment. Why are we different? So, I don't know. I'm not really for it. I'm happy to make exceptions, but I think there should be exceptions.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm old school. I think it's a red flag. I get it. I understand that if you've been working for five years at a below market salary and you need a little bit of money to take out and buy yourself a house.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting because the only time that when a founder tells me that they have potential acquisition offer where I feel excited about it is when I feel like that founder's done. They just can't keep going. They need to stop. And then I'm like, great, better in acquisition than having you just give up.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Me, when I think about exits and I don't think about exits much when I invest, partly because it's so far away, but I always ask myself if this company can go public someday. Because to me, that's the only good exit. It's not really true, right? I mean, there's plenty of great exits that are acquisitions, but if you're building to go public and be independent, be your own standalone company, then somebody might acquire you. Whereas if you're not building for that, then at least in the tech side of the business, like the chance that somebody acquires you is much lower, I think. So you should always be looking towards a how do we build this company to be a standalone, successful company that can last a hundred years.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Somebody once asked me what I do for a living. I told them I was a professional gambler. And then my partner told me I didn't have to come back to school night anymore. I think you need to sort of embrace the fact that you can't control what happens. The nature of the bed is that you don't know what's going to happen. And there's nothing you can really do about it. You put your money down and you can kind of steer things a bit, but it's sort of like steering a roller coaster. So when I was a founder, it didn't feel like that.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I do accept Liz's criticism that I am not as direct as I could be is one of my failings in life. But generally what I do is I'll ask the question. I just keep asking the question and make the founder think of it. This is usually before I invest because once you've invested, you're like, okay, they're like, great, I can't talk to you for three months because I've got to build my product. So this is a before you invest. All right, what is this going to look like in five years? How are you going to keep people from copying you? If you're successful, aren't you in the end going to undermine you on success because other people will pile into the market? Like, how do you prevent this? So these are just questions you ask in the pitch process. It's probably iterative and you force the founder to think about these things so they have thought about them. I mean, then when they start building a product, it's part of their thought process. Hopefully you can impress the importance of it enough that they will keep it in mind once they've got your money because once they've got your money, they don't have to listen to you for a long time. You see so many people build companies that have a great product but no way of keeping people from copying them.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Beginning. How are you building this company? What is your company going to look like when you're successful? And at that point, what do you know that other people don't know or have that other people don't have?”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I actually think it's something you can think about from the very beginning. The funny thing about that post was it's not actually about moats. It's about moats as a side effect of proving that as a startup, you probably won't have a moat when you start. So I categorize all these motes and said, look, each of these motes is you build over time. When you first start, if you have a real moat that's value adding, as opposed to if you show up with a patent, that value is something you brought to the table, not something you're creating in the company. If you show up without one of those things, then you won't have a moat to start. And you have to build a moat before you become successful because once you're successful, like I said, people can see that you're successful and they'll just copy you. Different kinds of companies have different ways of building modes, right? So if you're a company with a new technology, that's what you hope will be your new moat. That's a hard thing to build a mode on, right? People, it's easy to copy new technologies. If you're a company that's building a new market from scratch, well, that's a much easier place to build a moat because in building the market from scratch, you end up knowing something about the market that other people don't. And they can see your product, but they can't see what you know. It's something you can talk about from the beginning.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it depends on how you pitch it, right? I mean, I think investors have a bias towards action, at least the ones I know, right? So if you're like that person wasn't doing it, I fired them. They'll be like, okay, well, you should have told us first, but good job.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's totally true. I think the one thing I would disagree with is I think a lot of investors will look at what you think of as a bug that's messy, that people are coming in, they can't do the job I had to fire them and think of that as a feature. If you go in there and say, I hired 100 salespeople, 80 of them didn't work. I fired them. Investors will be like, great.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“With founders, there's a certain amount of fear once you get to that point that they might lose what they've built. They've found a product that people will buy, and they want to make sure that at this point they're not taking the risk with the company, right, an existential risk with the company. Whereas the investor will be like, look, you need to keep taking risks. You need to hire people not being sure if they're the perfect person. You need to spend money not being sure if it's going to work. Because as soon as you have a product that is successful that people want, your competitors can see that product, right? So you're going to have competition pretty quickly. And if you don't take the growth, then they're going to take it. You need to keep going. You can't slow down and be like, okay, let's solidify our base and not take that kind of risk going forward. You need to keep taking the risks.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Me, it's actually when the contract doesn't say what the term sheet said. The term sheet is obviously much shorter than the contract. The contract can say lots of things. Actually, that example was from when I was a founder. We had a term sheet. We got a contract which was not what the term sheet said. And then we had to argue for two months as we were running out of money about like this doesn't agree with what you said you were going to do. That's just super annoying.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“When I advised founders on terms, especially somebody when I'm not investing in the round, so there's no conflict of interest, you board composition, obviously, is always negotiable and super important. Option pools, are they pre or post money, also important? I mean, I think the more that you can share whatever is happening with the investor. So if the option pool is post money, you're both getting diluted. All right, that means that the investor is not going to push for an oversized option pool like they might if it were pre-money, stuff like that.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I might take the standard venture capital line here and say my term sheet's very fair. The terms are extremely ordinary terms. There's nothing fancy. I'm not trying to make money on terms. I'm trying to make money on the company succeeding. So you should just take my terms and go for it.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not if you've talked to me about it before the board meeting, right? You've talked about this, right? You call up one of the investors before and say, look, you know something about building pipeline. What should I do? And if you ask me outside the board meeting, what should I do? You don't have the group dynamic. I know you're just thinking about it. Whereas when you walk into the board meeting, you're supposed to walk in. Here's the things we considered. And I'm reporting to you on what I think we should do. And if you don't know what to do, you really have no idea. All right, well, that's a problem.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think that's part of the problem if you're making the founder fearful about their job, then of course they're going to come in either defensive or scared or worse board I've ever been on, the founder would come in and we'd have all-day meetings once a quarter and he would have every member of his management team come in and present for like an hour and everybody was falling asleep. I just don't need to hear all this. It's not critical for me to know this today. The information he sent out before the board was a full binder full of information. It was so much that nobody really digested it. And yeah, I know it's our job. And you'd flip through it and be like, okay, well, balance sheet looks good. He never focused on what the actual issues were that day.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Do we want to look at, right? What kind of metrics do we want to look at? Founders will anybody will look at the metrics that are going well, right? The vanity metric kind of thing, vanity metric problem. And you say, look, let's not do that. Let me look at what you're looking at to run the business. How are you running this business? How are you making decisions in your business? Tell me those metrics, right? Because I would run the business the same way you would. So why wouldn't I want to see the same things that you are looking at? I mean, this is very simple thing to think about, but they wanted to tell me how great the business was going and would find whatever metric there was to show that I didn't want to see those. I wanted to see the metrics that they were looking at that actually made a difference. And I mean, it's not rocket science.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think a lot of venture investors, especially early stage ones, could do a better job preparing founders for the next stage in their company's life. One of the best compliments I ever had was a follow-on investor who'd been on a few boards of companies that I'd been on the board of because I had been an earlier investor said to me, you know what, I love coming onto the boards where you've already been a board member because things just go much more smoothly. I think, yeah, you know, that's because the board was me and the founder and the founder would come in and do this. And I'd be like, no, no, don't do it that way. Do it this way. And they'd be like, come on, it's just you and me.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd agree with that. I mean, I've been on boards like that. Not all boards I've been on are like that. I don't know if everybody understands what their job is on the board. Board members-wise.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've been on boards like that, but I think it does depend on who is on your board. I mean, to a large extent. And unfortunately, some of the name investors, the people who are like, oh, that investor, they've been so successful aren't always the best people or board members.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“But you can't, right? Because the investors need to know how their investment's doing. They need to know whether they should continue having you as CAO. Like, this is their job. So they need for the board meeting to be more than that. You have to run a board meeting that's more than that. It won't be allowed to not do that.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm saying what's worked for me, but it hasn't always worked. One of the weird things about venture in general is I've invested in 100 companies in my life and some of them have been really successful and some have completely failed. But it's not a big enough data set for me to definitively say this is what works and this is what doesn't. And that's true of every VC. There's no VC. You can say this is what definitively works because nobody has a big enough data set. So I can tell you what works for me, but are there places where it wouldn't work? Yeah, of course.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say, Look, look, no, you need to stop doing that and do this. You need to hire these people to do this and blah blah blah. And founder be like, yeah, yeah, yeah, whatever. And the VC said, I called him every week. Every Friday we had a call and I would tell him the same thing. And then after like four or five times, he just stopped answering the phone. Yeah, whose fault is that? Yes, the founder is doing the wrong thing, but the VC's now lost his opportunity to change the founder's mind about what he's doing. And that means that he's completely powerless. He wasn't on the board. He couldn't do anything else. You need to be able to tell people things in a way that they can digest and believe and act on in a way. VCs have to be storytellers as well. Here's a story about how your company becomes successful.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think that anybody's not good enough to run a company. I think that they can learn to be good enough, right? So the blog post I wrote about your board of directors is going to fire you was not a blog post I just wrote, right? This was taken from an email that I had sent to many founders over the years saying, hey, you're having trouble on your board. Here's some advice. And to a person, none of them took that advice because they're like, no, no, no, no, no. These investors just gave me a bunch of money. They love me. They love me. And they're not going to do anything bad to me. They love me. And this, of course, is not true, right? They didn't give you money, right? They gave your company money and they'd be more than happy to replace you with one of their buddies and have them run the company with all that money if you give them an excuse. I can be as frank as I want. It doesn't mean people are going to listen to me. Another story in the book, right? Which is Liz and I were at this event and we were talking to a VC who was complaining about a founder that he had invested in who was doing things wrong at his company. And it was obvious to everybody that he was doing the wrong things. And the VC.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, my advice to founders has always been you walk in with solutions. The board has hired you in a sense, you are invested in you to be the people who solve problems, not the people who come up with problems. If you have a problem, you walk in with a solution and tell them, look, we have this problem. Here's our suggested solution. Here's three other solutions we thought of but rejected. We can talk about it. And if you walk in with a solution, founders like, great. This person can solve problems. If you want to be in charge of your company, you need to be in charge.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that would be fine if it were me. If a founder was doing that with me telling me all the raw detail about all the problems they had, it makes you nervous, as somebody listening, obviously, because here's all these problems. Wow, big problems. I think I could deal with it. I have dealt with it, but again, you know, I can't find the founder. I think later stage VCs might become nervous, and board meetings are three or four VCs from different firms all trying to prove to each other how smart they are because they need the other people to think they're smart so they can get future and co-investments with them. If you start bringing up problems, they're all going to start trying to solve your problems. And the last thing you want as a founder is for them, the investors to solve your problems or attempt to solve your problems for a few reasons. One, they're not able to solve your problems, right? They're there one day a month for a couple of hours at most, and they don't know enough detail. Two, any solution they come up with, your problems, you've already thought of, if you're any good, because you were living this 24-7. And three, if they think you can't solve your own problems, they're going to find somebody who can.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, I'm going to change the advice I give founders, which is become good at storytelling. No, seriously, I think you're right. You're totally right. And I think if you can tell a good story, not story in the terms of meaning something that's not true, but a story about what could happen.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“The founders who come in and tell me, well, we've got this chat GPT overlay that can write advertising copy. I'm like, that's so boring. I don't care. And I've had like 10 of those already. That's not changing the world. I think if you said we're going to completely change the way creative work is done. And then when I ask like, well, how are you going to do that? Like, well, we're using ChatGPT. It's different, right? I'm not saying that's a good idea, but what is the focus? Is your focus the technology or is it what you're trying to build?”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, totally. Jeff was like, look, this is how every piece of advertising is going to be bought in the future. This way, what we're doing, and he overperformed, actually, because I don't think in my wild his dreams I would have thought they would be as successful as they are. But I believed that, or at least I believed that was possible. I invested in a lot of ad tech companies and each of them were different, and each of them had a different vision of how things would be done in the future. And in each of those different visions, there was some billion dollar company at the end. And I couldn't believe in all of them simultaneously because they were depicting different things. But that's part of the job of the investor, right? It's a portfolio. He was the one who was like, well, this is how it's going to be done in the future. And I was like, yeah, probably not. But you know what? I believe in you. And I think that if anybody could do what you could do it. So yeah, I'm totally in.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“My advice is tell me what you want to happen. Don't come in there and be like, here's what we have and what we're going to do, and let's see what happens. It's tell me what you want to happen. Tell me what you want the world to look like in 10 years that makes a difference, that it's actually meaningful because I want to buy into the vision. I want to buy into something big, not some small product, not some chat GPT overlay. I want you to tell me how this is going to change things. And if you can get me excited about the vision, nothing else matters.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's an interesting symmetry here where both sides overpromise to get the deal done, but investors expect the founder to overpromise, and I think founders don't expect that the investor is overpromising. So the investor's like, oh, I'm going to do all these things. I'm going to be your best friend. I'm going to walk your dog for you. And the founder's like, wow, that's amazing. They're going to do my laundry. The flip side is the founder saying, we're going to be a billion dollar company. And the investor says, maybe.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, contracts are great fences. They keep you from going past the bounds of where you're supposed to go, right? You agree on the bounds of things, but that's not the whole agreement. The agreement includes what Liz and I talked about before I invested, right? What does she want to do with this company? Where does she think this company is going to go? What she's trying to do for me as an investor. And it goes both ways. I mean, what I told her I was going to do, I think, is also not in the contract, but at least morally binding.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“You got Bill Double for that. And then Liz called me like five minutes later, and she's like, Hey, look, I know we agreed to do something differently. So the lawyer was just freelancing. It's fine. We're going to do what I said. We're going to do. And I said, all right, well, why are you whispering? And she's like, I'm in a shiva. But then I think the flip side is the story Liz tells where she said, Well, we had this opportunity to sell the company, we would all make money, and the investors would just get their money back. So they wouldn't make money, which was a good deal for the founders. And Liz said no, because she's like, that's not what we signed up for”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think with Liz is the drive to win, but there's also a couple stories in the book one where we are doing a follow on round and the contract came in, I read the contract and said, look, there's some terms in here that we didn't agree on, that we in fact agreed we would do something differently. And I called Liz to say so, and she wasn't available. So I called the lawyer and he's like, well, that's just the way it is. I got super angry. I got super angry because I was like, wow, I did not expect Liz to screw me. That was totally, must have completely misread her. I can't believe this is happening. You know, part of what I was looking for was somebody who was a team player here's his contract. The denouncement was that I yelled at the lawyer for five minutes, which is what you pay lawyers for.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the most important things drive to win is super important. The problem is if drive to win is too strong or if there's no countervailing force to make you do reasonable things, then it can be destructive. So there's a tightrope you have to walk.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't believe in raw talent, or I do believe in it, but I don't think it's that useful in this regard. I think it's raw drive. I knew that she needed to come up with a good idea just because of who she is, right? She needed to start a company and have it be successful. So I knew that she would not rest until she found that idea.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“That I'd heard before I have sources of information you don't have, right? So I could help you, and I think you would probably winnow the list before you came to me. But then she came with the idea and I loved the idea, right? And of course, in the end, I had those breakfasts every few weeks because I knew that she would eventually come up with a good idea. But it wasn't like she told me an idea which I didn't like or didn't think would work. And I said, that's it. And I'm never talking to you again. So of course you invest in people, but you have to wait till they have the right idea. So I don't think it's one or the other. I mean, I knew Liz would come up with a great idea. And I know she'll come up with one in the future.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“Venture capitalists, people product markets, right? Those are the three things that venture capitalists invest in. I've asked a bunch of people which one you invest in. And the best answer I got was Andy Weissman from USV who said, why would I have to choose? That's sort of been my North Star. I do invest in ideas, but I don't invest in the product today because the product today, I mean, when you showed me the product for this company the first time, you're like, okay, just open a Docker container, bring up the command line, and then dump your biggest data set in. And I'm like, I don't have a big data set. What's my biggest data set? And it's not the product you sold, right? In the end, that's not what you brought to your customers. It was a seed of an idea. And I understood what you were trying to do, the driving motivation behind it. But I didn't need to actually use the product at the very earliest stages. So when Liz was starting her second company, we had a series of breakfasts every few weeks. We'd go to breakfast and she would run about 30 ideas by me. And I'd tell her they were all stupid. Actually, I didn't say that. I said it nicely. They were ideas that perhaps you didn't know enough about the market or”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I want to decide what I'm going to exit. I'm not deciding I want to investing today. I'm deciding on what I'm investing in 10 years from now.”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source
“I can't agree with that. I think I can't disagree more strenuously. It doesn't matter what you're building today. In terms of investment, your product today is just not what you're going to look like five years from now when I might actually get liquidity or 10 years from now. All I care about is what you are trying to build 10 years from now, right? So that's why I ask questions about market size or hiring or who works there, right? Because whatever product you have today is going to change. I mean, it's nice to know that you can build it, but I just don't think knowing what your product is today makes any difference to me investing. Now, if it makes you feel better for me to pretend that I care, that's fine. And I'll do that. But why? Why would I care about the details of your product?”
2023-11-07 · Invest Like the Best · Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351] · IDENTIFIED FROM THE TRANSCRIPT · source