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

“I guess I'm more of a humanist than a market system would imply. I mean, owed or not, I think it's, I would prefer to help somebody continue running their company through IPO just because I think it's good for that. Part of the reason I do the job, and I think part of the reason most VCs do the job, is because they want to see these things succeed. It's not just see ideas succeed, but to see people succeed. And nothing makes me happier than to see people I've backed succeed personally. It's just a great perk of the job. I mean, it has nothing to do with me making money. Correlated, but it's not causation, right? They succeed. I make money, they make money, but that person succeeding that I backed, it's just awesome.”
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
“Yeah, I agree with that. I mean, I actually changed from a doer to a manager when I worked for a big company, and nobody told me that there either. The difference being that they gave me the time and space to actually make that transition myself. But somebody actually told me, you need to stop working and start managing because people who work for you need to somebody. Education to people who are growing companies to let them grow also.”
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
“Yeah, I mean, founders are often the best salesperson. They're usually the person who has the vision. They're going to push the company more than any other. One thing I wish I had said more strongly in the book was that to me it's crazy that founders think they're the show, that people are giving money to the company and yet somehow they're not the pop star, right? Like the act goes on without the”
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 every person I've backed would say I'm the most founder friendly VC they've worked with and yet I refuse to say that about myself because I think it's intellectually dishonest I need the founder to succeed if the company is going to succeed but in the end I also have a personal investment in the founders I back because I back people not ideas so you get this attachment but I know that that's an irrational thing for me to do to be attached to the person not the company because that's not the job I think it's intellectually dishonest to say you're founder friendly and tout that as some sort of plus for the founder I don't think that's the 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
“See, it's funny because Liz and I disagree about this. She thinks that being frank and honest is the highest virtue, and I don't. I don't think that always being honest, the people you're in some sort of relationship with business or otherwise is the best strategy, that sometimes you need to sugarcoat it a bit, that you need to help them get to where you are, and just being completely frank doesn't do that for everybody. I think the best venture capitalist that I've worked with are the ones who care about the company, care about building the company, and can give the right advice to get the company to do the things they need to do to build the company. Not just about making the most money, but about actually building a business. But even there, they're not there to make the founder successful, right? They're not saying, here's the advice that will make you the founder successful. It's here's the advice that'll make your company successful. And I think that's probably the point of divergence for most people is that the founder is like, well, this person gave me money and they want me to be successful. And then they find out that, no, that's not what happened. VC gave the company money and they want the company to be 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
“Yeah, a lot of hedge fund guys. I mean, how many venture capitalists are on the Forbes 400? I mean, I think maybe the past five years has been a few, but before that, there was maybe one, maybe two. And those couple were either John Doore or they made their money by being a founder first and then becoming a venture capitalist. So the fact that so many people go into it to make money, and that's what they want to do, it's odd to me. And all they care about is making money. And I think there are a lot of venture capitalists like that. But if you don't care about building businesses, it just seems like the wrong job to take.”
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 a weird business, right? I think every financial intermediary is judged on how much money they make, right? You look at the MIDAS list. It's not a list of the people who've built the most successful companies. It's a list of who's made the most money. Some of them have made money to the detriment of the public markets or whatever. But that doesn't count, right? I mean, for me, I think I'm most proud of the fact that I've had nine companies I've invested in have gone public, right? These are real companies that these people built something and I was part of that. They created thousands of great jobs. I mean, if all you care about is making money, it's a weird business to go into venture capital because it's not the easiest way to make money. I mean, you look at the Forbes 400.”
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 was the whiteboarding exercise. She's like, nobody ever told me I'd have to hire more salespeople this fast. I'm like, swear to God, I have pictures of the fucking whiteboard.”
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've invested in two of Liz's companies, both of them from the very beginning, or very close to the beginning in the first one, and then at the very beginning in the second one. And I think we've had a good relationship with friends. It's been, I don't know, 12 years now or whatever, I found some of the comments, if applied to myself hurtful. She's only had, I don't know, 10, 15 VCs in her life in the company, so I'm one of them. So it's like, okay, well, am I doing these things? Is this a fair comment about how I've advised her? Here's one I think we actually had an argument about while we were writing the book. She said, oh, VCs never give you this advice. And I called her up and said, I gave you this exact fucking advice. She's like, you did not. I'm like, I did. I did. And I reminded her of the exact situation we were in and what I had said. And she's like, oh, is that you?”
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
“Them. And it's interesting, right? Because VC, there's usually no training. The people who are successful often just pop into it and become successful at never having done it before. There might be no right way to do it, right? It's an interesting thing. Why are they most successful VC firms, often the ones that came out of nowhere? Union Square Ventures, the two founders that had previous jobs at VC firms, but they weren't that successful. And they started a fund and they became one of the most successful funds on Earth. IA Ventures, same thing. They weren't venture capitalists and all of a sudden they were one of the most successful funds ever. So maybe experience is not what you need. It's unfortunate that the people who are successful are often the ones who don't know how to manage companies. I'm not saying either of those firms is how to manage companies because I like them both, but people come in and are successful financially without knowing how to manage the companies they're investing in. And there's no motivation to be people who are good managers. I don't think that's what LPAs look for in investors.”
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, I have to be there to support them. That's all I can do. Whether I do a great job at that is certainly open to question. But it is what I try to do is, all right, look, you need to do this if you want the company to succeed, right? And they're like, oh, yeah, right. I need to do that and stop doing the stuff I'm doing today and go and find some customers. I don't consider myself an expert at that, but I think as an outside voice, somebody's saying, don't forget that you need to go make some money. People need that reminder.”
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
“Side is now, I've said that the job of the board is to fire the CEO. But in truth, so when I sit on board, it's usually really early stage, right? So from founding until they raise their Series A or B. I can't fire the founder. I mean, never have board control, but I couldn't fire the founder even if I wanted to because nobody's going to take that job. I can't hire somebody to run this company that needs to, my job isn't to do that. My job is to train them to run real board meetings to try to push them in the right direction, to remind them of what they need to do that they know they need to do to get the company off the ground.”
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
“Lower his pay or her pay. And that's it. So even though that's not the only thing you do on a board, in the end, that's the only remedy you 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
“I think that's true. But because that's the only thing they can do. So I've been on boards where the board has to approve the budget for the following year, right? Every board has to do that. I've been on boards where you approve the budget and then the CEO doesn't stick to the budget. And then what do you do? Do you sue him? I mean, you know”
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
“Partly like punching down, but partly because if they don't catch it, it's probably their fault. They take ownership of the problems they miss, but it still 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
“Think if we were to do a second edition. Somebody said to me after one of our events, it said there's a lot of complaining about venture capitalists, but, and this was a venture capitalist saying this, but nobody ever complains about the founders, and founders have just as much bad behavior as venture capitalists do. And I think this is true. And I think maybe I've been in the business too long because I could have been a little more sharp-tongued about things that founders do that are wrong, such as, okay, we're just going to screw the investors. We're going to take the money and walk away. We're not going to pay out the preferred. I've been in deals where the founder has negotiated with an acquirer to get half the money, even though they weren't paying back the preference. Both sides can do things that are wrong, right? I mean, I've known founders to lie during due diligence.”
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
“Already gotten the first part of our advance, so I'd spent it. I think it's important to note what the entrepreneur is actually thinking that they're not saying to you. And here's actually an honest account of that, of what Liz was thinking. I mean, right or wrong, and I disagree with a lot of what she says, but it's still what she felt, right? So I need to know that as an investor.”
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
“Institution as a way to go forward and build progress. So Liz is like, okay, fine. So I went and asked a bunch of investors that I know, some who I knew pretty well or know pretty well, people I've worked with who I like. And to a person, they said no. They wouldn't do what they didn't want to be associated with the book. And one of them emailed me back and said, look, I didn't like the initial posts that you wrote that this was based on. And I think that you've moderated your opinion in your half, but I think Liz's side is completely wrong. It's off base. It's over the top. I think that you should not publish the book. I think you should disassociate yourself from what she's written because it's just wrong and bad. I was a little surprised because he's actually a great investor. He's a friend. I've sat on boards with him and he's really helpful to founders and super reasonable. So I asked a couple of my founder friends. I'm like, look, name withheld, but this is what was said. And one of them said, yeah, spoken like a guy who can't be fired.”
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
“This is what they're thinking. And I think it's true. But when I showed the book and when we were writing it and we had a bunch of people, including you, take a read of it beforehand just to give us feedback and tell us how it was gelling. The people who were venture capitalists were very negative on it. They didn't agree with what Liz said. They didn't think it was true. And they thought that saying it was harmful to the ecosystem. We were looking for somebody to write the foreword. And I said, yeah, we should have Sandy Lerner write it, right? The founder of an amazing company. She found it Cisco with her husband and was then fired by her board a year before they went public, which always surprised me because if they were that close to going public, she couldn't have been doing that bad a job, right? And Sandy is a great writer. She sent in this forward. It's really well written, really powerful, and was like somebody kicking me in the head because it's so anti-VC. So I said, look, you know, I think in the spirit of the book, we should have a second forward written by somebody who believes in venture capital as an”
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'm a venture capitalist, and I have been for a long time. I read Liz's sections, and some of them make me uncomfortable just as a venture capitalist. I don't see myself in what she writes. I don't see myself the same way that she sees me, or at least sees venture capitalist as a class. But this was part of what we wanted to do with the book, right? I actually insisted that if we were going to write a book together, that we not agree, that we don't come to some consensus. Every book's like that, right? Like, oh, here's one side, here's the other side, let's find a place where we can all agree. And you read these venture capital books and it's not true. because that's not what happens in the company. People aren't always agreeing. So the point was we write the book and we tell our sides as convincingly as possible so that people can see what each side says. And then when they read it, they can say, okay, I'm talking about venture capitalists, and this is what they're thinking. They're thinking what I'm thinking and what I write in the book. And if you were a venture capitalist, you can say, well, I'm talking to these entrepreneurs and they say one thing, but what are they really thinking? And they can read Liz's section and say, oh,”
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