Semil Shah, Haystack

Welcome to Origins a podcast about the money behind the money. This podcast is created by notation a precede Venture Capital firm based in Brooklyn, New York. We invest in amazing technical teams and projects in New York City on day Zero. You can find us on Twitter and notation capital.

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Partner at Haystack an early stage investor based here in San Francisco were on the road.

We're in an undisclosed location. Yeah, this does feels like an underground bunker welcomed several. Thanks for having me. Great to see you twice in one week. That's right to kick us off. Could you just tell us a little bit about your background and how you came to be a VC a taste. I'm sure the background kind of bullet point includes a stint of thinking I would go to law school and working for the Manhattan DA's a nice working as a professional cook. Where was that in New York and a little bit in San Francisco? Okay. Yeah. I thought I would take that lifestyle. I read Kitchen Confidential the best one of the best books and it's a hard life people who do it. So let's see order up grew up in Connecticut, New York. Okay. Yeah, very very fortunate for that and had a stint in the nonprofit side of the world. The nonprofit was in the world of finance and economic development.

And then I kind of after grad school moved out here and got involved in the startup scene and I didn't really realize at that time what was happening in the world which was the world economy was shifting at the same time. I was moving back here for my second tour in the Bay Area moving from Finance driven a technology-driven and that the epicenters of that shift were, you know, kind of China and the US and right and what year was that right at the end of 2010 and 2011 basically? Yeah. When did you start writing a Blog in I want to say it was came a pretty active blogger, but previous to Haystack no, oh very much. So yes, it was it was probably late 2010 2011 folks will ask like how did you get into it? And it was a couple of ways someone introduced me to a VC Fred's blog before I even knew what like Tekken startups work and then through through just reading that occasionally, not daily. I learned of Chris Dixon's blog who he was in New York at the time.

Chris and I had a mutual friend and I had been on Twitter. So we met a couple times again not really understanding that world. And then when I moved out here, I was really reading Arrington and mg and just following how they wrote If you go back to some of the posts that they wrote at that time they were so right about some things that we just use on a daily basis now, right so got to know them and then I would just fire up my own blog. I think the first one was on on posterous or post office here eat and such enter. We're both friends now and then I just started doing it. If I look back at those original ones. They were pretty bad and then I just started doing it more and more and then I can't really explain what happened but people started reading it and sharing it and you know with all of the content that's being shared in our online communities. Now, it's sort of like peer-reviewed and it just so happened that like a lot of VCS were reading it as well and it would start off it would email me and

Comment on something I've written or asked to meet for coffee. And then the coffee's turned into meet my partner and then the meet my partner turned into hey, would you consider working here? Right and then it turned into hey, let's get you in business. When did you start Angel investment? So so to be technical here, I've never had my own Capital to angel investor. Okay. So the first check I wrote was in March of 2013. Okay, and that was all other people's capital. I mean I put in a little bit of my own. Yeah to sort of have skin in the game, but that was like the first check and that was a pooled vehicle a VC fund just a very small was that funny called Haystack it was and and how did how did that come to be? Yeah. I was actually just talking with my friend about this. So a good friend of mine Alex gurevich is a partner at Javelin ventures in San Francisco. They're on their fourth about a hundred twenty five million dollar fund the two gentlemen who started that Jed cats and no added oil Alex kind of brought me in when I was in between startup gigs and

Just said hey hang out with us as an ER for six months. Right and Jed kind of saw the deal flowers bringing in and I was just meeting entrepreneurs every 45 minutes and he said hey you make my Haystack smaller. And so that kind of just stuck with me. Nice. Yeah, did they back? You know, like for that first van? No, I didn't ask them. And yeah, but they didn't but a lot of a lot of VCS and entrepreneurs did when you okay? Yeah, and it took me about just the stats on that. I raised a million dollars. Okay, took me about eight months and I was deploying and raising the capital at the same time and this is in 2013, correct? And so I guess walk us through like was there a was there structure to it? I mean, I guess from what I can tell you were meeting all these Founders you wanted to start investing assume. These were mostly individual LPS that you went to what was the pitch. Well, what was the pitch to the founders or to the people investing in the phone to the out piece as you put this million?

There's together. So there were people that knew me already that wanted to put me in business. So would give me 10,000 25,000 25,000 was like the main check size right and then a couple of them were really generous and introducing me to their kind of long kind of Rolodex of entrepreneurs who had done well and also other investors who liked newer smaller funds so that kind of just snowballed from there. I wouldn't say it was easy, but I had a lot of people making, you know, second derivative third derivative intros for me and the pitch was like, you know, I had a little slide deck and I just said hey, I'm going to write 25 to 50 k tracks and just try to cut my way in there is really no structure now now to answer your question on the structure side, there was a proper fund right? There was a proper LPA. Yep. There was not a PPM. Okay. I have another PPM for any fund. Okay? Yes. It was all legally set up. Okay. Yeah, I think I remember my mom asking me like can you actually do that? Like should you be doing that?

This is a very specific question but a million dollar fund don't you pay like half the fund and fees and I don't think inside like take fees in the first fund. Okay, and I had 20% carry on it. Okay, and I was Consulting with other firms at the time. And so the the real sort of like B-side podcast dungeon story. Is that even though I knew a lot of firms and I have a lot of friends a lot of firms and I'm very lucky to have all those relationships. No one would hire me. I mean, I just did not fit the profile and also didn't have the experience to be a professional investor. So out of that kind of frustration. I was like, okay, you know, I had a couple friends pull me aside. You probably know not cool at whose at light speed now when sharing Gotham Gupta who's CEO of nature box? Okay, you know, they just said look stop trying to get a job. All right. Stop trying to get a job. Just go do it keep Consulting with the firm's they're going to still support you go. What is Consulting with?

Firms made so when they were, you know going back when I was mentioning to you that a lot of these folks are to reading my writing then meeting me for coffee and then introduce me their Partners what happened is one very well-known firm approached me and they were like, hey, we talked about hiring you and that idea was crushed because of everything I just mentioned before but we got clearance to bring you on as a consultant will pay you a little bit per month check with your boss. Okay, and that kind of snowball to a point where over a three-year period I was working. I worked as a paid consultant for seven different funds most of them on Sand Hill and at one time I worked with five concurrently. So they all have trusted me not to kind of share State Secrets across fund. None of it was sourcing base. It was just like hey help us evaluate deals in a kind of mutated into different things. So I kind of got to see how cooperated yeah. Yeah. How did you learn? You know, it is sort of like a multi input learning model where you know, look podcast is a big input now back then it was a lot of blogs a lot of sitting in meetings.

A lot of driving to and from a pitch where you talked to the investor before and after a lot of sitting in partner pitches where you hear how a deal is prosecuted or shut down, right? So what I would say a lot of like in person audio auditory learning, right, you can pick up a blog post. You can't go to class for it. We're going to talk about Haystack today and a little bit but was there an overarching strategy or theme or Playbook with that first million dollar fund a couple answers to that. I did think about themes back then I don't know and I thought oh online to offline or new types of micro services and infrastructure or you know, these standard things you would see on the VC website.

And maybe that or marketplaces right? Maybe that led me to some good places, but it's kind of generic in reality. I've just always felt like, you know, people ask like, how did you do this or what's your strategy or what's your approach and I always just I feel like a dog chasing cars. Hmm. Yeah, there's almost like if I caught one I wouldn't know what to do with it. What were some of the worst mistakes that you made looking back down or or what are some of the things maybe that you did an error that you've kind of shed. Do you mean from an investment point of view were just operational point of view either? Yeah. Okay investment point of view. There's only one deal that I lose sleep over where I probably you know was very early right at the time. I was doing the instacart investment. I got an intro to Brian Armstrong from coinbase. I was interested in that world. I probably could have met him we had a mutual friends. I'd like to Hope I probably could have invested 25k that would have been really smart move and we talked on the phone. I just wasn't aggressive about following up and

Was a mistake I think operationally a mistake was but but yeah, so that's a mistake because like it's a very specific example of maybe a deal that you miss but if you were to maybe zoom out a bit do you think there was a there was a like a larger like plenty more systemic issue in terms of maybe missing that specific deal.

Like like maybe at the time you just there were lots of things that you weren't following up with and and you've but that one I asked for the intro to him, right? I did everything I just wasn't aggressive about closing the loop on our thread right? Why um, I just felt like I was badgering him a little bit but I should I should have been badgering him. Right? Right, right. Um, I think more systemic was a couple things. I probably should have been more aggressive by trying to raise two million instead of 1 million. I probably should have made those initial Investments be 50k or a hundred K and done fewer rather than all 25k looking back. You know, those are that's probably what I should have done and I probably should have bought, you know, operationally once I started to do the second fun brought on a proper back office sooner. I kind of Outsource that just to affirm that's very nice, but this wasn't their core competency and sort of like paying through the technical debt of that we can talk about that later, but just, you know getting the proper control.

In place for managing other people's money that was all foreign and you to me did he consider Partners at that time? I didn't the only time I started thinking about Partners is when I was raising my third fund which was an eight-point-two million dollar fund. I just finished deploying it. It was a full two-year fund. That was the first time I met institutional LPS and a lot of the you know, I use those meetings just to get feedback and sort of break the ice with that and a big piece of feedback was hey partner up with somebody for a variety of reasons. I really thought about it and in between doing fun three and four, they were definitely three or four people that I identified in my in my own head. Hey, I would love to work with this person in this capacity and explored those things. It just didn't work out for this one. So it's sort of I'm here now by myself just because I've been you know the dog chasing cars. Yeah, but it's not my intention like I don't have an ambition to do something just so low, but as you know you

You partnered with Alex. It's a pretty intimate decision. And so I just want to make sure that if and when it happens, I'm just super super excited. Yeah, walk us through how we went from fun one to fun too. And then and then maybe three sure so fun one. I tried to raise five could only raise one right deployed in about 18 months. Yep fun to I tried to raise ten currently race 3.2 deployed that in about 18 months, but it felt a little bit faster and then we're a lot of mistakes in that fund we can talk about in terms of just how I managed it talk about it. Yeah, and then fun three, I'll just close this out was a point to try to raise 20 try to go to institutions and deploy that over two years where I felt like it was very solid measured Pace with good follow follow along and some bulking up. Yep, the mistakes and fun to were just I was I think the environment was too loose the Vintage was like 2014-15. Yeah.

Also too loose. I was trying to prove some things that I think didn't don't really matter anymore like what um, so if we take a step back and you know, she's gone through institutional financing. No one knows how good you are how good Alex's how good Nick is how good some meal is so they look at proxies for that. And what are the proxies? Which companies are you already in? Yeah, how much of those companies raised? Yep who followed your deals? Yep. Now is that are all those proxies correlated with the outcome TBD and so I was tuning my behavior to that. Yeah, that that's a really good point. You know, even if I look back on our first fund definitely there's that there's that little birdie in the back of your head which is like I think this might get written up by firm X rather than this is a company that I love that I think long term is going to be great. Yeah, and that's what you're describing. Yeah. There's a piece of that. There's also just the

I would say operational. What's the word?

Lack of discipline in terms of like doing something fast because it's like the person or right, you know, kind of just felt like hey just keep going keep chasing the cars. Yep, you know so fun to largely similar in strategy and Playbook and what did a couple things different? Okay, so instead of writing 25k checks, I was writing 5200 KH X and then I wrote I bulked up in for company. So I put a third of the fund in the for companies. Okay, because I wanted to show people that I could follow on. Yep without having Pro rata. Yeah never had Pro rata that I've asked for it before you and I wanted to show I could write a larger check into a company. Yep. Can you say which companies? Yeah, so I bulked up and Chariot. We have a sold to Ford. Yep. That's her not to be a good decision. I bulked up in managed by Q. Yep kind of local company for you. You know, it's easy with Dan to know that Dan will go the distance and I was very lucky in that the

Early stage investors in that company where all people I knew really. Well. Yeah, I bulked up in Claire Labs, which is a kind of email and scheduling AI company really compelling interesting quirky fun Founders. And then the other one was Lux valet, which was just sold the Volvo, you know, which was probably won't be the Merit of that investment decision for me. Probably what you know, I was I'm glad I made the investment and I love the team probably financially not a great decision. And this is you going to found her saying hey, I know I don't have Pro rata, but we've worked closely with each other since the beginning and I'd love the opportunity to yeah. Each one is a little bit different with Clara Labs. I had to really fight together in the deal to begin with and then I help them hire two people out of their violent person team. So they were like, okay you earned your re-up. Yeah, which would Chariot a very close with the founder and was his real first.

Investor and really got him most of the other investors. So he and I are like buds. So he was like whatever you want to do. It comes out of my backside. That's fine with managed by Q. I think the same thing Dan and I are pretty close and I think he felt like hey, it would be great to just want to help you as well and you know a lot of this, you know, this Nick a lot of it is the entrepreneurs help us, right, they create opportunities for us and with Lux, you know, very close friends with with Sarver who led the series a and love working with Ryan and will want to work with them again. And so that was just easy and I knew Curtis really well as you were raising these funds and you know, we've had a number of people on this podcast that could raise lots of money and you know, maybe don't raise as much as they can and then there's some other folks that it is hard to raise capital for these funds in the early days. What where where'd you get the most pushed back and

I want to talk about your new fund which as I understand it very well from a fundraising perspective. But where did you get the most push back in the early days? And why do you think not to be discouraging but why do you think you maybe fell short of your targets? Oh, yeah. I'm happy to talk about each one. So in fun 3, which was the 8.2 million dollar fund started raising it in Spring of 2015. That was the first taste and exposure. I had to a lot of the LPS now we know as friends right particularly, the institutional folks the positons endowments foundations. Yeah on the funds. Yeah. My office has really tried to understand and learn from them their business model their philosophy their outlook on the ecosystem in general their outlook on where we were in the cycle and I wouldn't say I was naive in the sense that I thought maybe one or two would take like a look because we're some really really good marks in the first fund especially. Yep and kind of kind of three to four months into that fund raise. I kept the

and for a year purposely so that I could meet more and more LPS in this as an excuse, but really like for five months and I was like

This could be a turd right? What was the patch to the institutions the pitch? What was the what was the story you were telling at the time? It was like, you know looking back. It's like not a very exciting story. It's like hey, I'm raising the 20 million dollar fund. These are all the big people that know me. These are all the people that have invested in me. These are the companies. I'm in. You know, what do you think Hmm. So it's pretty dull. I think I had maybe a little bit of an advantage in that a lot of them had read what I've been writing before. Okay, and a lot of them had their GPS proactively kind of say, hey take a look, right? So I had some structural advantages going in but even without those we should come back to that. It's still very very difficult. What was the most common answer that you heard in terms of why they pass? Well, let's talk about this because I think it'll be useful for your audience. So no particular order. They're just a bunch of people who in their mandate or when they take two.

He can't do a single GP fund. Okay, I just won't touch it. Okay. Hey, my committee is going to crap all over that. Yep, not going to happen. Yep. So it's not to say there aren't yes a bunch of single GP funds that are very successful. That's not to say but I'm just saying if we're talking about funnel optimization and percentage. They just won't do it. This won't do it. Okay, and we'll do it and actually don't blame them. I don't blame them and why is that you think it's just because if something happens to you or you decide you don't want to know I think the reason that is said for legal for like the legal LPA side of it is what happens to you. If Nick or some meals, you know hit by Muni, right? All right. I think the reality is also just hey if Nick is looking at a deal, but Alex is holding his feet to the fire. But I like Nick and Alex and I like their interaction. I'm just going to feel like it's an extra filter on that decision. And I think that has a lot of Merit if I put on an LP hat

We buy that argument right? I think second is just size and structural. We probably talked about you probably have about a lot in this podcast, which is you know, I always use a ten ten by ten to a hundred rule, which is most LPS want to be 10% of a fun and write a ten million dollar check. Yep. So if you're writing doing anything less than a hundred million dollar fun is just structurally difficult for people now, that's kind of on the surface. Let's go beneath that. I think people don't want to be in somebody's First Institutional fund. It's kind of like how a VC will say like go raise from friends and family and Seed funds and then come to me when you're ready. They're Outsourcing their risk to other Capital providers that also makes sense. I think that there's definitely a preference for people who are spinouts from other Venture funds and I think the primary reason there is because they have been exposed to something. You cannot learn on YouTube in a blog in other places, which is how

Isn't the right institution managed Capital across funds the problem with doing spinouts and I met some people who only did spinouts even though they didn't even realize it is that you're essentially asking for adverse selection because the very very best people are going to be kept within their fund and so that's not to say that that's always the case right but I think that as a pattern, you know, we'll see soon right other reasons people would push back you let's say around differentiation. I don't understand how the next Travis is going to find notation or find Haystack, but why I think that's a little bit flawed because

You really have to go talk to the founders about why they chose certain people and how they actually raised money and also in the seed world not every deal every good deal is hot deal and vice versa. Yeah. Yeah another piece of pushback which I think is the most legitimate push back out there is hey, I see you wrote a 25k check in this company and the 50k check in this could company and hey, you put hundred or two hundred in this good company. Can you write consistently a 750k to a million-dollar check in a good company right for ownership? Yep, and a lot of people just don't meet that bar. So I want to talk about this fund just raised if you have an announced the I'm doing a rolling thunder podcast announcement. So no official announcement. No official announcement. Oh, okay. Can we say how big it is? Yeah, 23 million 23 million dollar fund Haystack. Technically Haystack for technically his room Roman numeral for boom. There you go. Yeah fancy.

That's a fancy. Yeah, it's going to be etched into the wine that face. So tell us about raising this fund. There are some institutional LPS in there. Can you say who I can? Okay, so tell us about raising that fun what went differently what you think got some folks over the line and and what the strategy is around that going forward sure. So I'll kind of answer that in two parts. There's just like the technique and the what I did and then more the emotional side of it. So I just recently wrote something that is it because I get a lot of people ask me like hey, what should I do or how did you do it? Right and and for our audience, you know, you just wrote up a really great post about transitioning from a non institutional Venture firm to an Institutional Venture firm and all the things that you did. Yeah along the way so if folks want to read more about it, yeah on your block. Yeah, they kind of my blog the basic idea is to think about it as a campaign.

That's a framework I use and that there's a pre marketing campaign. There's the actual campaign and there there's a closing mechanics and drive hurting of cats Dupree marketing stuff. I go through on the blog. There's a lot of detail to go through and I think it's a kind of go through there like a checklist, but the main thing is that

Pre-marketing should be months and months of pre-marketing. Yep. So kind of like this the analogy I would use to Star Wars right? We're all going to go watch a movie but we're going to watch three trailers probably a hundred times over the next six months before it comes out and that's what people need in general. That's what LPS need to put you in the pipe. Hmm. And so those those should be casual conversations. This should be who do I connect with who I like Yep. They're just these natural filters. Yep. Now, I'm sure you know, how many of those do you think you had? Well, I only did it in two or three months and so it was really just tactical getting feedback. Like hey, I'm going to go. Yep. If I were to do it again, I'd probably make it a little bit longer and sort of like more of a front porch, you know sit on the front porch thing. How many people are on your list so or firms I interacted with I don't know the exact count, but it's well over 200 distinct email phone or smart phone or in person touch points with institutional grade LPS. Well 200 firms.

200 separate firm Flopper identities. Yeah over over the course of those three months know over the course of that pre-marketing was more of an Insider e sharing of so probably like are 40. Okay for yeah. Yeah. Yeah. What do you think ultimately got some folks over the line? I think only in retrospect that this worked out but a couple things there were three things. I told everybody up front that I stuck with and I stuck with them because I believed in them and I just physically didn't have the capacity to do anything else. So I just kind of just put my foot in the like like I dug my foot and I was like, this is it so I gave them a target range. I said one. I'm not going to go over this target range. I don't want a dollar more. I'm afraid of having a dollar more than this amount. So there was no hard cap, but I just said, you know, I want to raise 25 to 35 and you know, would you take 40 and we do have no just cut it off right there. Yep.

Secondly, I budgeted six months for the actual campaign and I kind of just said look this is what I have mental energy for private and that turned out to be the right amount because and I'll get to this like I ran out of gas at the end. You know, it's just like oof this is yeah too much. Yeah, and then I said no special or funky closes. So people would be like well, hey we going to we have our you know, an off-site in August and then we'll decide in September. Is that okay? And you can reopen it and I was like if you can't decide in six months like yeah, I'm not going to be yeah, I'm just going to take it as a signal that it's not of interest and that's okay. So it's just like not listening to the words and just saying like if it's not within that time, it's just not going to work out. And so what ended up happening I think at the end of the very very tail end is only when it picked up the last like literally the last ten business days. Okay. So I really was like the Reggie Miller that eyesight. I've felt like that.

A lot of people also said no during that time and I think because I was so consistent and telling them when I was stopping that a lot of people respected that and remembered it. Yeah and kind of called or emailed and said, hey enjoyed getting to know you. I know that you're finishing up now we can't go and so that was really appreciated. So but if it all happens question for you if it all happened in the last 10 days. Oh, yeah, why not just move the deadline up earlier if ultimately everybody was going to make a decision yes or no in those last 10 days. Why not have the deadline be three months earlier? Well, I think some of those people that did end up saying yes needed that second quarter. Okay. I also 10 now to just think in quarters. I don't know why. Okay, so everything is like a quarter to me sure and also I kind of felt that I mentally kind of budgeted the time with like a family trip we were taking and when people kind of check out for the summer and I felt like I had enough energy to go that that long

So I was just going to say okay. I'll just fight with the army that I have. That was the other thing. I did I told everybody to like, well what if you don't hit it? I'm like fine. All right. Keep going. Yeah, I'll keep doing what you've been doing. Yeah. So how is this different? Yeah, but there are two other things. I wanted to mention on your questions. So I think what gets people over the line that people probably underestimate is the in you've gone through this, you know, this the heavy referencing that people do is the opposite of cramming for a test. So if you're smart enough and look you've got the right notes from your friends and you can kind of know how to cram you can cram for a test. You can't cram for the referencing. Yeah. So, you know, it was pretty unsettling when people that I know really really well who I still trust and I've been to their house and I've done deals with them and they've coached me Mentor me they point out the weaknesses in the reference. They've got out all that stuff and you're like, okay your people are watching every behavior that you've demonstrated will be cited by someone doing a lot of referencing. So it's pretty hard if you're not

Extremely referenceable with some real examples to to break through. Secondly. I would just say the emotional side of going through the six months. If I were to plot on a curve there was there was one point where I got nervous now luckily that happened very early The Omen occurred very early in there was one point where I was really down. Yep. So so that was kind of the wave so right in like towards the end of like Midway through January. I was in the market for two weeks and someone who I got to know pretty well. They only have seven kind of core relationships of which I know for the principles very very well. They all reached out to them. I met them I was on Sand Hill Road and I knew that this person was across the street on Sand Hill Road 980 meaning so I sent them a message in an hour. They wrote me back and said sorry totally booked on the Strip sent for my iPad and I was like, oh my

You know that kind of just like they don't care not that they don't ya right now they don't care right and this one isn't happening and you have all the right interest right and you already met them a bunch of times. So luckily that happened like January 17th or 18th. I'll I'll remember that and I remember talking to a couple friends and they were like, yeah, that's not good. So I got scared early and then the second the second piece which was a low point. It was just kind of surprising is like I did a first close and I thought I would be at least halfway there with one institution definitely not the case, right but only raised a little bit more than the previous fund. So it's kind of I remember like writing the lawyer and I was like, can you tell a lie that up again? It's like, you know counting the chips of like right that can't be right and then right around Memorial Day. I remember my dad was visiting here and I took a day or two off to just like cart the kids around with him and I remember just thinking like this is a theft. I'm like, I'm just going to have to reorient. Yeah, I remember talking to like

Bunch of folks had mentored me like Peter from locks and a couple of other guys just said like hey, I'm going to go out with the fund in the teens and be happy and just kind of reorienting I was going to finish out but I basically just said hey this ain't happening. I think every fundraise goes through those moments for Founder's for VCS. I think I think I've always been a believer that through every single financing. There's always that moment where you're like, it's fucked. Yeah, you know, so really I kind of hit bottom for a couple days and then I already had like two trips in New York set and I was really excited to go to New York on both these trips. I'm like, it's gonna have fun. Yeah. Yeah it all out. Yeah go. So, how's this strategy different for this one? This is TBD. This is going to be the next podcast because I'm covering it out. Okay, it'd be great person get advice from which is the stuck, you know, the the the issue that I'm going to have to work out now is the stuff that got me here today isn't going to work moving forward.

And so I've got to think about pacing the type of person I want to partner with who I want to co-invest with. I've never thought about what my ownership is in the company before never. Okay, I mean 20 25 million or just under 25 million dollar fund. Yeah. I mean presumably your your lead investor and in or co-lead and in some but I'll probably do is lead a couple. Yep over the course of three years and lead and lead a couple likely to lead a seed round like a two million dollar. Yeah. See you around. Yeah, I'm probably going to be a larger Syndicate partner for people that I like working with them. And that's a call it 2 to 300 K type of chat. What I say is like between 350 and 750. Okay, but you know 750 or lead 350 we follow but to me like the main thing what I was getting to especially in the Bay Area is just trying to find people that I have a lot of personal conviction in

Unlike the authenticity meter because right now I'm just very very nervous about how many people are starting funds how many people starting companies and just trying to test like what's the drive and resolved to finish the work and and that's hard sometimes just trying to be super conservative and careful about that piece of it more concentrated strategy. I think relative to the Past. Yes. Yeah. Yes. Yeah. What does that mean? Again? It's TB. I'm literally working it out. Now. Do you call it twenty three million dollars seed fund precede fund. I mean this came up at the send down. I want to mention this so I don't get lost in the terms. I just think I'm a sort of Disciples of the maple appeals Ian strategy might Maple strategy or his line, which is your fun size as your strategy. Yep. I've always I've always believed that we actually talked about that on our last podcast. We just did did you have you had Mike on by the way? No, we should. Oh you should oh, I'll set that up we go. I think if you're

So regardless of GP regardless of stage if you're under 20 million, you don't really need a model. You can kind of get away with murder. Yep. If you're 20 to 40, you have to start getting between 5 to 10 points. And if you're over 40, which was kind of my line cut off line. I think you have to act like, you know, like a great seat fun like homebrewer Freestyle. Yeah, where your ownership driven and concentrated. Yep and really picking and I just think the issue in the environment is you have funds that are way over 40 calling themselves proceed really sure but the math doesn't work now you can bulk up and companies but I just don't think even the smartest people like can can manage a band with to find all those. Yeah stepping back for a sec. How would you describe Haystack today? You're looking at it? Yeah, I think of it as like I'm very fortunate to be here I had

A hundred and one plus people helped me and that I just want to be you know, I feel like I'm very lucky that people read what I write and follow what I write and people come my way in a stop by my shop if you will.

And I just want to find people who are there's a line of sight between what they were doing before way before this was cool and want to do something now and just work with other Syndicate partners that are also like friends. I mean, it sounds kind of corny but yeah thoughts on the market today. I know you seems like your you believe that there's a lot of noise. I would say the market I would I would chop it up in that there's an answer I give you for the Bay Area. Yep, and there's an answer I give you for the us and for the rest of the world. So to me the rest of the world and in certain Pockets, I don't know much about but just through my work with GG V where I'm a venture partner and are you still haven't reported stolen truck energy to be? Yeah and your LPS were cool with that. It actually really worked out well in the lp process. I think there were like look, you know, when I started that official Venture partner roll with them, I'd only been investing for a little over two years and just so that I'm in part of all their partnership meetings. I see all the a rounds being rounds Recaps

Hands down rounds, you know, they just said Has a single GP. Why do you still do that? And I'm like, yeah, I'm there for half a day on Monday. I said I'm learning from pros of return Capital across many many funds so they actually view that as a plus. You know, now I've got four and a half years investing experience. I don't think I could talk to you like I'm talking to you now without that without that exposure, right? So I think the entrepreneurship you see in places like let's say Berlin or parts of Spain and Portugal maybe even Paris or southeast Asia or or places like Brazil and especially in China would would would surprise people here the tenacity the derive the authenticity around it, maybe maybe not but just the hustle Factor right? I think would surprise people right? I think in the u.s. I believe in the

Ed Wilson post about spillover effect, which is the and this will this will back into the bay area. I think you're going to see a couple of things emerge in you're already starting to see a little bit of it which is tier 2 tier 3 ecosystems or merging with Angel Investors going out and capital spreading across the country. I'm talking in 10 to 20 years, right so that this will happen. I also think that as these subcultures emerge in these locations, like let's say a place like Utah or a place like Indianapolis, you'll have people who have created one or two really big companies and maybe a couple of others without taking much Venture financing. And so you may have a myth a local myth emerge of like, why do you need Venture funding? So I do believe that will happen in the next 10 to 20 years. The Bay Area is like its own country to me. Yeah, you know, I'm sure you feel that every time you come here. I remember a year ago when we were hanging out and he said he went to Menlo Park and you thought you were in the Twilight.