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We hosted an AMA with investors and founders from Lenda, Women Who Code, GrowthX, Intel, and Quest Venture Partners. You can watch the panel or read the transcript below:



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Video Transcript

Elaina: Hiya. I’m Elaina Percival. I’m the CEO of Women Who Code. It’s a 501c3 dedicated to inspiring women to excel in technology careers. It’s in 18 countries in over 50 cities so feel free to ask me questions about hiring specifically women engineers but a lot of the advice goes to hiring engineers in general. About building a community, about dealing with global expansion and I’ll chime in with other questions that I know the answers to.

Rob: Great. Yours is actually one name that I probably could pronounce.

Christine: And Christine is really difficult.

Rob: That one’s a little tough. Although I sometimes struggle with your last name, is it Herian, Herian.

Christine: It’s Heron.

Rob: Like Haraan kind of sounds a little like…

Christine: The Safeway people sometimes I get a Hairon. Yeah. It’s like wax on wax off. So Christine Heron, Intel Capital. Since Rob has his contact info up I put mine up and I kind of laughed at the AMA because I do talks for 500 which devolve pretty quickly into really inappropriate things so it’s just a normal talk.

Rob: We’ve already had that today yeah.

Christine: It’s just a normal talk. And feel free to ask me about funding, anything related to women and funding in particular. I’m happy to sass about and I’ve been sort of corporate the last few years. Before that I was at First Round Capital for a few years so happy to talk about seed funding. I have been an entrepreneur who’s been groped to IC’s. I have raised money and lost it all, so happy to touch on whatever that is interesting.

Rob: Jason.

Jason: Thank you. Hi my name’s Jason Vandenberry and I’m the co-founder and CEO of Lender. We’re an on-line marketplace lender and we’re actually based here in Galvanize on the fourth floor so if anyone here is Galvanize please feel free to stop by and say hi. We did 500 startups about a year ago. It’s been a pretty good ride since then. 25% month over month growth so feel free to ask me anything regarding that journey thus far. This is my first startup that I’ve actually gotten fund raising done so I’m happy to talk about that. And this is AMA so feel free to ask me anything. Thanks.

Shaun: Hi. Shaun Shepherd, co-founder of Growth X. We are a micro VC $50 million C stage fund. We also provide market development services to a select few of the companies we invest in. Five time founder myself. Three wins and two wonderful learning experiences. So I’ve been on both sides of it. Those of you know me you know you can ask me anything and I will answer it so I’m looking forward to this.

Rob: And so also for background for you guys, show of hands if you’ve already raised money for your venture. I know, we’ve given you too much. So majority of folks here though are early, they’re looking to raise their first round or getting started. So beginning of the day was a lot of the 101, cap table 101, convergence 101 so all the sort of background. So think about your questions, be ready, we’ll do this. But first I’ll like start it off. What’s the worst and most annoying thing a founder can do in your experience? Start with the negative.

What’s the worst and most annoying thing a founder can do in your experience?

Shaun: Assume anything.

Rob: Okay. Meaning like they should never assume that money’s going to be available, that they’ll get support that the sun will come up?

Shaun: My father taught me to assume nothing except responsibility for your own actions so you should develop hypothesis. True story I won’t say who is it but we just had a meeting with a company out of Houston that was raising $7 million seed funding at a $92 million valuation and we said why? He said, “Because that way I get to raise $7 million and keep as much of my company as I want to.”

Rob: That’s sort of like the companies that are like I’m raising at a billion valuation and you know, later stage why?

Shaun: Yeah.

Rob: Well because I want to be a unicorn.

Shaun: I’m sorry. I believe in customer development and getting outside the building and actually talking to people before you start making statements like that. Anyway that was sort of the end of the conversation.

Christine: Put me on a newsletter without freaking asking.

Rob: That drives me crazy.

Christine: That drives me fucking bat shit.

Rob: I know.

Christine: If I met 30 startups this week do I want to be on 30 more newsletters? I don’t think so.

Rob: Yeah. Which is a little contrary to what we talked about doing investor updates. So the monthly, “Hey just want to update you, we’ve been talking.” Versus the, “Here’s all my customer and consumer facing junk in your face.” But yeah that drives me crazy. I think I tweeted that and you favored that at one point. I remember this. Yes okay.

Christina: Can I just say if the person doesn’t have an assistant, which is me, suggest times to connect because if you say like let’s suggest times for us to meet you’re asking me to do all the work. That happens all the time.

Rob: Yeah that’s tough too. Also please don’t say like let’s meet tomorrow at 9am. It’s like I may be asleep or I’ve already booked that time so. Okay. Let’s go to the audience. Who wants to start? We want someone shy. Really? Come on? No. Let’s do it. Kick it off Adam. Break the ice.

What’s the most emotionally difficult thing you have had to do as an entrepreneur?

Adam: What’s the most emotionally difficult thing you have had to do as an entrepreneur?

Rob: This is one for Jason.

Christina: I’ll throw one out because I’m holding it and then I’ll pass it along. Fire 30 people when I shut my company down. People with kids and mortgages.

Rob: I did that too. God that was painful.

Jason: I don’t know, I think as a founder every day is pretty emotional, at least it is for me. I’ve said this a bunch of times and I feel like being an entrepreneur is kind of like self-prescribed manic depression. You know you kind of did it to yourself and now you’re on that roller coaster ride. So this morning I was screaming fuck at the top of my lungs because I found a leak in the boat and had to fix it real quick but then had a good lunch and everything was good. You know, like it’s a roller coaster ride and it’s very emotional and as founders.

Christina: This is not really enough information. This is a lame answer.

Jason: What?

Christina: Be specific. Be specific.

Rob: Yeah what happened? What’s broken?

Christina: What happened?

Jason: We had a client that we found out we could have told them no exactly 28 days ago, four weeks ago and we missed it. We fucked up. And so now, we’re a customer facing company, we’re a BUC company so now we have to go back to that customer. We focus on real estate, finance transactions, home loans. This is a serious, serious financial transaction that cost a lot of money. The answer would have been exactly the same four weeks ago but we missed it in our system. And we found that leak now and we fixed it but now we have to go back to that customer and say hey we fucked up. And that’s really, really, shitty.

No. We can’t, we can’t do the loan. Like it’s just a dead deal. And that kind of stuff breaks my heart. It breaks our entire teams heart and it was just a, it happens. So those kind of things definitely happen. Was that specific enough for you?

Christine: That was much better.

Jason: Feel like confession.

Shaun: I think the way I want to answer it and I’m just going to answer it this way because this is the way I want to answer it. Recognizing the emotional toll that your life choice as an entrepreneur takes on those that love you is the hardest thing to come to terms with. I’ve been married almost 15 years, I have a 13 year old daughter and a 12 year old son. She’s been on this roller coaster with me since the beginning. She’s the strongest person I know by a mile. She’s been there when we’ve made millions. She was there when I filed bankruptcy. She’s there, she was there when I made it back and she’ll be there until she kills me. But honestly the toll that this life that we choose takes on the people that are around you is the toughest. I have lost relationships with a brother, a sister, a mother, have recovered and repaired those things. So you know just hard things happen constantly and you’ve got to recognize that the people around you are impacted by it as well.

Rob: We’re getting into the dark stuff really quick here jeez. It’s true though, but this is true and this is the good stuff and honestly I feel like investors and accelerators don’t do enough to address it. We try and do this and I went through hell on my last company too. And I do a talk called Founder Real Talk and I look out and at least 30% of the people out there are crying after this talk. And I know that it’s good, and maybe I cry a little bit.

Christine: Did they have enough of you?

Rob: No. That was like off the record. Because I have to talk about the bad stuff investors did to. I don’t want them seeing that.

Elaina: For me it’s all of the stuff that we have to say no to. The things that we can’t do. And if I actually have to write that, no sorry we can’t do it, it’s even harder. And it can be anything from a dad in Long Island writing to ask if we can recommend a mentor for his 13 year old daughter and we’re like that’s amazing but that’s not what we do. It’s so painful. And it can also be, you can just always be doing more is something that I said leading into this conversation. And seeing other things around you that you’re like, “Oh and we can be doing this.” But like honing it in and sticking to what you’re doing. It’s really, really hard to do.

Rob: Other questions out there? Yep Becca go ahead.

Becca: [Inaudible 00:10:00].

Jason: As quickly as possible find your posse. If you’re a founder CEO find at least five founder CEO’s that will be there for you. Like I’ve cried on Adam’s shoulder probably a dozen times.

Rob: It’s true that misery loves company so yeah.

Jason: Yeah. So it’s just someone to commiserate with, it’s someone to celebrate with. Like I’ll see Pronay tonight who was also in Adam and my batch at 500 and it will be tales of glory and also tales of sorrow. And I think that that’s really important as you go through the journey to have that person that can really relate to you and where you’re at and then also have someone that’s been there but is ahead of you right. So we’re a seed stage company and I try to talk to people that are very series A and series B and I kind of look at them as my North Star and say all right that’s where I want to be. What did you do? And talk me through this. And I think it’s really important to level out the roller coaster ride. And then of course there’s alcohol.

Rob: Although that’s dangerous. I mean I definitely see my fair share of substance abuse problems which concern me. I know it’s a relief. I would say something that’s not as bad for your body and which was helpful to me was just writing. Just getting it out. You don’t have to publish. Sometimes you can’t because you don’t want to rattle the cage too much but great example like I was going through the series A crunch. I was very series A crunched. I needed an outlet. I created a Twitter account called Series A crunch and just riffed on investors all day. Totally anonymous. The unfortunate thing was the damn thing went viral and all the investors that said no started following that account. So it was a weird vindication too. But I always tell people you’ve got to get it out. Put it down. Talk with someone to. Where I see founders that struggle on the ups and downs, they bottle everything in and then you’re just destined to blow and have a breakup and have an explosion and many bad things happen.

Shaun: Perspective. Don’t forget why you’re doing what you’re doing and what the end goal is and constantly remind yourself of that. And I mean have reminders on every one of your screens and have reminders on your nightstand and have reminders from the people that you love and care about you and that are around you constantly. And then as Jason said, I completely agree, find somebody who’s done and accomplished what you’ve already accomplished and make them your mentor, make them an advisor, make them somebody that you can bounce this stuff off of.

Christine: I don’t believe I need to answer every question but I do want to throw one in on this one. I think, I was a sole founder when I started a company and I would never fucking do that again. No seriously because then what happens you field every ball. You can never take a vacation, you can never close your eyes. And so not having anyone to share the weight with you when it gets heavy is really hard. And people talk about they don’t like to invest in people they like to invest in teams, and usually people talk about it in the context of competencies but I think part of it is just it’s a lot easier if someone else can take a turn. You know, it’s not always your turn so that you can catch your breath now and then.

Rob: Yeah and I think there’s, like even VC’s famous about not liking the solo founders. I guess how many are solo founders here just so we know who we’re offending.

Christine: Dude get some fucking friends and give them equity because, and treat them like. Seriously you’re going to be miserable.

Rob: Yeah. But I think the competency thing is really, really important too.

Christine: See I talk like this everywhere.

Rob: Remember I said she’s going to be candid and straight forward. But think about this too. You cannot be good at everything. It’s probably going to be a balance. Here she’s awesome at the technical things and then the other person is awesome at the business and finance and together they are complete. Like the balance is really needed. So this is why it’s not some weird bias it’s just we know that journey’s long and hard and you do need a break and you need someone to supplement you. You just can’t do everything.

How do you remain positive as a founder?

Rob: Yeah. So are you asking for the, I guess for everyone. How do you sort of remain level headed? We talked about the valley having this forced modesty like. Yeah how do you sort of maintain that?

Christine: Which one of you has the worst God complex?

Rob: Jason.

Jason: I’m an arrogant asshole.

Rob: Are you though? I mean you’re really likeable. I’ve enjoyed working with you.

Jason: I’m likeable but…

Rob: Yeah he has some arrogance.

Jason: I’ve been called arrogant, I’ve been called cocky and I think as a founder CEO who’s out there raising money you kind of have to be at times. Because if you don’t believe in your business and you can’t convince someone to write you a million dollar check you know. I think cockiness and like believing in yourself and who you’re recruited and retained is, that’s how I do it. And that’s just who I am. But that’s on the fundraising side. I think from a business perspective and a personal perspective I’ve been really fortunate in my life.

I’ve done a lot of cool shit. I’ve traveled a lot and I’ve seen a lot of the world and I’m super thankful every single night when I go to bed next to my wonderful, wonderful wife who has supported me through multiple entrepreneurial fucking ups and downs. And we have a really awesome bed and we get hot showers every night and we live in Marin County like, my life is awesome no matter what happens. I live in the Bay area. It’s paradise in case you haven’t been outside today. So I have that perspective and I think that keeps me kind of level that no matter what happens I’ve got that. Like I live in the USA, I’m never going to go hungry, I’m always going to have a roof over my head. I’m always going to have friends to support me and pick me up if I do fall down. So I’ve got that and that is for me very, very rewarding so I can go out and take big risks like Lender. So that’s.

Audience: [Inaudible 00:16:31].

Jason: I don’t. No pills. This is pure baby.

Rob: You’ve evolved. You were a bit of a ranter in the headlight yeah you were a little like “mmm” when you first came and so we did, I guess, can we disclose this? I did some follow on investing and I didn’t really want to do the investment to be honest. I was going to wait because we can invest later. But you came in and you had the perfect amount of confidence and you really articulated that you know the business now and the economics are good and that this thing is just, the momentum is there.

Jason: Yeah.

Rob: But yeah. I mean other than the few statements you just made about your yuppie like in Marin County you’re actually. You’ve maintained pretty well. Good job.

Jason: Thank you Rob. Thank you for investing.

Rob: Yes. Come by my big house in Belmont we’ll talk more about it.

Jason: Don’t tell anyone.

Shaun: So size does matter. You can be, to me the only difference between arrogance and confidence is ignorance. I don’t think Jason is arrogant I think he’s confident. And I’ve just met him. But I’ve been there. What keeps me grounded is getting my ass beat regularly. Not just by life and the challenges that we face every single day in taking risks. People think every overnight success story is overnight. It takes seven, ten years to have an overnight success story. They don’t know what it’s like to eat Top Ramen and not pay yourself to make sure everybody in your company’s getting paid right. You might have a wonderful day and everybody thinks you’re great and you go home and your wife’s like, “Take the kids, I’m going out with Lucy and we’re going to get drunk because this sucks.”

So there’s all sorts of different ways that you can stay grounded and however but it mostly has to do with mindfulness and awareness. And what I’ve learned in life is the things that I’ve gotten have come from my giving. Coming from, just from being, trying to be a humble servant and everyday trying to be a little bit more of that. And be helpful to people and never forget that I’m standing on the shoulders of giants just sitting here right. I didn’t do this by myself.

Favorite life hack to save you time and agony?

Christina: Put the most ridiculous minor things into your calendar because they will get forgotten. So for example I put bio breaks in my calendar on days with lots of meetings running around because otherwise I’ll be like fuck, that meeting went five minutes over, I really have to go to the bathroom so now I’m going to be 15 minutes late to get into the car and like it happens. So just put really meaningless shit into your calendar and you’ll be glad.

Rob: Do all of you read email right when you wake up? Is it the first thing? Like scratch yourself and then grab your phone?

Christina: No. I’m making lunch for a five year old.

Rob: Yeah okay.

Shaun: I’m reading email and then I’m [inaudible 00:19:38].

Jason: It’s the first thing I do when I wake up, it’s the last thing I do when I go to bed is read email and reply. I’m a total addict.

Rob: I know isn’t that bad though? To me that feels unhealthy.

Jason: Terrible.

Rob: Yeah.

Jason: It’s terrible.

Rob: And especially at night. You’re actually, it’s proven that your phone is basically spinning your brain out when you should be settling down.

Jason: Oh yeah. It’s, like it is what it is.

Rob: Yeah.

Jason: I got emails to get to and I can’t…

Rob: But I’ve been trying to do morning time with my kids too instead and I’m just so much happier with life.

Christina: And here’s the thing. So like I remember, and this stood out this sort of stark numbers thing where I remember one night fairly recently I stayed up till like 2:00 A.M. trying to get into my email inbox. I’m like, “Oh fuck this I’m like up over 800 that’s just too many.” So I sent, I chewed it down by a couple hundred and I was so excited, woo hoo, 595 or whatever. Go to be at 2:00 A.M., my daughter wakes me up at 6:30 so I check back by like 7:00, 7:15. I had 80 new fucking emails. And like do people realize, it’s just not physically possible in the time space continuum for me to answer that many emails so people just don’t get responded to because they all had shit attached to them. So I just let things die.

Elaina: Yeah I’ll say that if I don’t check those emails before I go to bed I’ll actually not sleep well and I’ll be like having nightmares and restless because I’m waiting to. Yeah.

Christina: [Inaudible 00:21:01].

Elaina: I’m still in the nonprofit seed stage.

Rob: Notice like we keep, we keep drifting into email because email is so dominating. And I think it was Mark’s sister that said it’s the to do list that other people can add to whenever they want. That’s a terrifying proposition. Yeah that’s scary.

Shaun: That’s a horrible way to think about it. I’m going to quit using email now that you said that.

Rob: I think also like VC’s, like yeah that’s the number one thing.

Shaun: No the one thing for me is.

Rob: Skiing and complaining about email.

Shaun: Is I’ve learned how to say no politely and not feel bad about it. The books Essentialism has truly changed my life in the last year.

Rob: What is the book called?

Shaun: Essentialism.

Rob: Essentialism.

Shaun: Yeah. And that’s what it’s all about. Decide what’s important in your life, create your priorities and then stay disciplined to that. And it gives you great little tips, tricks and techniques on how to do it in the right way. Because you want, if I were a dinosaur I’d be a plesiosaurus. I want to make everybody happy. I do, I want to make everybody happy and it’s been to my own detriment. And so I’m learning now at 42 years old how to do this for the first time. And frankly it’s kind of liberating. And I’m not just a VC I’m a VC with a services arm so I have seven portfolio companies that we’re helping provide market development strategy and early execution for. So I’ve got, I’m pretty damn busy.

Rob: Yeah that’s super hands on and yeah.

Shaun: Yeah so it’s crazy. So Essentialism has been my thing. So that’s the life hack for me.

Rob: Becca?

Becca: [Inaudible 00:22:36].

Rob: This is like, just to clarify like a B to B type sale?

Becca: Yeah.

Rob: Okay.

Shaun: Wait are you saying a B to B sale transaction? Are you saying as a founder?

Christina: Yeah. No turn those people down. Turn those people down they turn into like freaking rat, deepest darkest rat holes you can imagine and you could have serviced and won so many other clients. Like I don’t imagine you have a lot of feedback from us but yeah, no turn them down.

Rob: Yeah I think…

Shaun: [Inaudible 00:23:23].

Rob: Well I think, I was just going to say it’s the same for investors. The investors that want to give you the least amount of money typically are the biggest pain in the ass. Like good investors want to give you the money you need and get out of your way except when you need their support and help to. And yeah this I think is very similar, B to B or consumer if you’re discounted people too much. Giving them all these discounts. Those discount users are horrible. They’re just like low yield and high overhead. And so that person you do your deal with if they’re a burden before the deal, like you don’t want to know what’s happening next.

Man: [Inaudible 00:24:01].

Rob: Are there questions out there? So shy. We should have done the drinking first yeah. Founder limbo, what was your experience?

Christine: I shut down my company, I fired everybody, turned down the asset acquisition offer because it felt like I was getting away with something that would tarnish my reputation. So I think I preserved reputation at the cost of bank account. And I think I licked my wounds for about two years. And this was in 2001 so there was all sorts of bad shit happening right. And I felt bad because I let go off a lot of people that couldn’t get another job because everyone was shutting down. It’s not like today where if you shut something down those people get hired right again. So licked my wounds, contract work/consulting for several years with some really good people. Like Scott Raper, Mike Segal, John Calbe, so these are now like family to me. Which I think most people don’t know that we worked together for a while. But yeah there’s nothing about, I just licked my wounds for a couple years and then there’s nothing you can do. And then eventually you’re like, “Oh well that’s kind of interesting. I want to spend some time working on this thing that seems really cool. It’s like dating you know.” It’s like someone dumps your ass and you’re crushed and then eventually like oh well they’re kind of cute.

Rob: So there’s a mourning period and the last thing you should probably do is immediately turn around and do a new company. Like this is the biggest mistake you could make.

Shaun: Yeah it’s five stages of grief. It’s just like anything, you go through those. Depending on the level of maturity you are in your life. The second deal for me was a lot easier to get through than the first time I screwed up. I took it very personally. I viewed it as my failure not the failure of 2008. So you get through these things in different ways right. How you react is more of who you are than how you act.

Rob: How do you deal with no’s?

Jason: Yeah I’ve gotten a lot of no’s. I love no’s because fund raising is sales and every no you get you’re closer to the next yes. So don’t ever forget that as you go out and fundraise. Wow. Steal microphones.

Rob: That’s how he’s funding his business yeah. You’ll see that on Craigslist later today.

Jason: I think the first time I started fund raising which was probably, shit probably like a year, 14 months ago now, I got a couple no’s and I would just defend, defend via email and write this long just bullshit. It didn’t matter what I said. I already got a no, who cares. So instead of doing that now I’m just. I do look for feedback because I think it is a, look VC’s are really smart right. They’re, not all of them but they’re smart. And so it’s a time for you to get some valuable feedback about your business. What don’t they like? And not just like you’re too early. That’s bullshit, that’s no. Give me something tangible that I can take. What don’t you really like? Like give me something real. And then I jot it down. I use Streak to manage my fund raising pipeline in Gmail, there’s a tool that you could use. And that is, that’s it. And then I compile that after the fund raising is closed and I kind of look at it and I say well is there anything valuable here? Are they right? Maybe they are. Who knows? If I heard it a bunch of times maybe they are. Maybe there is something I need to take a closer look at. Marcus has joined us. Do you want to do a cricket show?

Marcus: Ask me how long it took me to get from Palo Alto to here. Two hours. And I’m not even parked legally. All the garages are full because of the ball game.

Jason: Got to use locks.

Marcus: So I’m really sorry about my tardiness.

Rob: That’s okay. By the way a VC can be late to a meeting. You as a founder cannot. So just keep that in mind.

Marcus: Yeah I know but that’s not cool right. You should respect people’s time.

Rob: I agree.

Marcus: Either way I’m sorry. So I’m Marcus [inaudible 00:28:08] Partners, we’re a seed stage series A firm. Typically do checks in the range of like 300K to about a million. Done about 65 investments and been around since 2008. So ask me anything.

Rob: Let’s start with this one question. It was about no’s. So you give a no. What should the founder do next?

Marcus: What should the founder do next?

Rob: Yeah. They’ve got a no from you.

Marcus: Respectfully ask why and if I give you my answer then great and you can prod into the answer. But don’t try to convince me otherwise. Because if I’ve already said no it’s because not just me said no but the rest of my partnership probably said no too. Right so if anything you’re A wasting your time and then B you’re inflaming the situation. It’s better to ask for the reason why and then move on. That would be my suggestion.

Rob: Yeah we have a thread where a founder, we’ve said no to the accelerator and I’ve been reading it in between and it’s like go get the popcorn. He’s just going to keep digging himself a bigger hole.

Marcus: There’s something to be said about tenacity but there’s also something to be said like dog with a bone where you’re just consistently chewing at me. That pushes me away actually rather than make me more interested. So tenacity is one thing but if I give a clear no it’s a no.

Rob: So but they should take the feedback, process it, potentially come back to you in a month or two when they’re maybe addressed some of that. Is that?

Christine: That is really soon.

Rob: That’s too soon okay.

Marcus: It’s usually too soon.

Rob: Okay so more like three to six months because then you have some data you can actually be like here’s three to four months of data to show that this is the right way to do it.

Marcus: Right. Usually I’m like hey prove me wrong. I’m happy to see you prove me wrong.

Jason: So how often will you reinvest?

Marcus: Will I reinvest. So there was one company, Coffee Meets Bagel we originally saw in 2013. We passed on them then because we thought they had a strong team but they were in the dating circle and we were just like fuck no. This is such a competitive market and consumer area that if you don’t have any real traction it’s just like you’re blowing smoke up my ass. So we ended up doing it in actually 2015 when they actually had significant amounts of revenue. Like three million plus. So they went out and they proved me wrong and I was like sweet. I’m happy to pay up and do the deal then. So there is a case where I said no and two years later I said yes because I had already kind of mentally vetted the team and they actually demonstrated and executed what they said they were going to do.

Rob: Question yeah. Why be a founder? Why the hell would you do this? You look at Massood, you can go and work at a bank. Let’s start with Jason and let’s kind of go around.

Jason: No I can’t like I’ve been fired from every job I’ve ever had. I was definitely that kid that did not handle authority very well. I just, I don’t know I can’t work for other people. It’s just who I am. I have worked for other people, I have been fired from all those jobs and I don’t know. It’s just, I don’t know if I chose entrepreneurship I think it’s just how I am. I’ve always from a very early age I always found a way to hustle and make money. Whether it was paper round or mowing lawns or building a fucking four by eight shovel to shovel driveways in Philadelphia with a bunch of my buddies. I was that dude that was going up to the door and saying can we shovel your driveway for 25 bucks. I’ll give you 20, no it’s 25. Right. And if you want your sidewalks it’s an extra 10. And so I’ve always been this way. I can’t help it. Sorry.

Christine: That’s fucking awesome. So I know when I started a company, this is a while ago but I don’t really think it’s changed that much since then sadly, was I was getting shut out of some opportunities at work which it was very clear that gender was at play. And I said, “Fuck this, it is easier to raise money and get ownership work and get a raise or whatever so I’ll just go and start a company instead.” And so I did that. And it is easier to raise money than it is to get an offer. Get a raise.

Shaun: Very similar to Jason in that I never actually thought about working for other people. My first job I was an arms dealer, I was selling Chinese throwing stars out of the back of Black Belt Magazine at school.

Rob: I remember those ads actually yeah.

Shaun: Not kidding. And then the money I made that summer I used to loan to my parents at a 10% interest rate for an extra day at Disneyland because they couldn’t afford it. So that’s just always been who I am. And I went and played golf for a living for five years after college so that was a solitary existence of constant failed entrepreneurship. But that’s always been who I am. Like Jason honestly I tried working for other people but I always was either arrogant enough or confident enough or just had a belief in myself that I could do it better or that there was certain ways that I wanted to do things. And over time I’ve learned to balance that out. Partnerships are really important to me and I’ve got great partners of varied perspectives and backgrounds and genders and ethnicities etc. and I’ve learned to be a part of a team. I’ve always been a team leader but now I’m really part of a true team and it’s a very different experience and I think it just comes with me, for me it just came with maturity. Just growing up.

Rob: Yeah can we note your experience or what you’re seeing with women who code? Like why are they coming to you? Because they want to be, they’re engineers or founders or both?

Elaina: Yeah so I would say about 5% of our members, our entrepreneurs are interested in becoming entrepreneurs and so I mean from my perspective. I was like Jason like I had my first business that I was paying taxes on when I was in middle school. And I’ve just always been really passionate about it but with women who code it’s definitely about the missing and that’s what keeps me going and it’s the stories, the successes that the individuals have in their careers and in their lives that enables me to answer my emails at night before I go to bed and in the morning when I wake up.

Rob: You said you had a second question to.

Woman: Yeah [inaudible 00:34:09].

Rob: That’s investment.

Woman: Best mentor.

Rob: Okay. We’ll start at the end.

Woman: [Inaudible 00:34:23].

Rob: Ah you’re just saying that.

Marcus: The best mentor I’ve ever had was actually an entrepreneur. He was a much older entrepreneur, had founded Tipco in his past so had a very successful company in the past. But just working with him I was able to bring some value to the team to but I found that I was actually the one being mentored rather than the other way round. So I tried to soak up and learn as much as I could from that relationship. But what it came down to was he was all about sort of respecting people but at the same time having a goal and agenda in mind and setting expectations of the people. So I learned from him that those are the kind of key things for me to have done. And this is like no secret so the CEO was a gentleman named Vijay Teller who was the CEO of a company called Qik. And that was a very difficult company because it was a turnaround situation where we invested so we had to work very closely together. So really that was the best mentor for me thus far has actually been one of my entrepreneurs. Not a common thing but in this case it was definitely him.

Rob: This is Qik Q-I-K right?

Marcus: Yeah.

Rob: So it’s interesting when you think about it like they were.

Marcus: [Inaudible 00:35:32].

Rob: Yeah well the mobile broadcasting. I mean they were basically too early.

Marcus: [Inaudible 00:35:39]. Everyone thought it was a failure yeah. And really it had a great engineering team and it just needed a new CEO to step in the role. When we made the investment we had kind of communicated to the other founders that the CEO needed to shift and they were 100% behind that idea. And before we made that investment, because we were able to work with the team so close we could make that change happen and change the burn from 500K to 180K and all kinds of crazy stuff right. This is in 2009. I mean this is big money back then. But it only happened because there was trust and respect and open communication. And also I think because the people involved had high integrity. If there wasn’t that then I don’t think you could have gone, we couldn’t achieve what we did with Qik. Really that was actually the best mentor for me.

Rob: Let’s keep telling mentor stories and then if you could add how you got them to be your mentor just so they can sort of learn or steal that idea.

Christine: I don’t know. I’ve yet to find one. It would be great. But I’ve never had that relationship develop which is kind of sad. I mean I’d like it but.

Rob: How did you become such a bad ass then? Just all on your own?

Christine: [Inaudible 00:36:51].

Rob: Yeah okay I get it.

Christine: I don’t like being told I can’t do shit.

Rob: Got it.

Jason: I had a lot of good mentors but one always comes to mind. I did an internship while I was in college. I had an internship lined up at Merrill Lynch and then I just wasn’t feeling it, it was like a cubicle job for the summer. Naturally. And then this opportunity came up through the internship network at Pen State where I went to school. And it was Exotic Key Beach Resort at Belize and I was going to be managing this resort for this international real estate developer named Mike Cobb. And I went to the interview and me and Mike got along, peas and carrots. Like this dude was just solid. And he calls me up, tells me I’ve got the internship. I’m totally stoked, everyone tells me I’m bat shit crazy, totally should of went to Merrill Lynch, like this is career you’ve got to get in there and do.

I studied finance like this is what you’ve got to do. So I get down there and Mike just ended up becoming a really solid mentor for me. And I don’t think I ever asked him like will you be my mentor. It was very, I just looked up to him because what he was doing was bad ass. He would go to countries like Belize before anyone knew really where Belize was and would like bush whack through the jungle and then buy a shit ton of real estate. And then develop it. And it was just cool. So I really looked up to him. And after my first business failed I went and saw him and the reason I always liked Mike is because the question that he asked me, I was devastated naturally. And he goes, “Great, your business failed. Happens all the time. What did you do right?”

And I thought, “Fuck I never thought about that.” because when you fail all you think about is everything you did wrong right. And so that just gave me a little perspective. I was like Mike I don’t even know because I haven’t thought about that, I’ve just been down here for so long so let me get back to you. And I just think that those kind of questions, that’s why I’ve always looked up to him. I keep in touch with him. Probably only every six months now, shoot him an email letting him know how things are going. He always asks me really good questions so I appreciate that.

Shaun: I’ve been incredibly fortunate in my life. My father and my grandfather were my first and still best mentors. My grandfather was a Bronze Star winner at the Battle of the Bulge and World War II and started his own company and my father was a Navy Seal and then went to work for Intel and helped build that company through the 80’s and retired as the EVP of technology manufacturing. I grew up having dinner with Andy Grove and Bob Noise and Gordon Moore and Paul O’Leany and Craig Barrett and all these guys, they’re just industry luminaries. And I got to see and watch how they did things and I of course didn’t listen to any of it.

But it took a long time. Now my mentor, my best mentor is my business partner Will Bunker who was a founder of what became Match.com. He’s just inflicted with common sense. He’s from the Mississippi river delta in Arkansas, he’s a farmer who started a dating site in 1996 in Dallas because he wanted to figure out how to make money on the internet. He took $90,000 in outside investment and sold the thing three years later for $50 million. So we all came, myself, my two partners we all came from outside the Valley in terms of where we had our successes. We didn’t have this, this idea of mentorship wasn’t a thing. But now I look back on it as somebody who is mentoring a lot of folks, as I said earlier find somebody who’s accomplished what you’ve accomplished and try to make them your mentor. And more importantly they should just want to invest in you because of you not because of what you’re asking them to do. That they take a personal interest in you as a person is more important than the rest of it. Business is transactional relationships are forever.

Rob: Yeah for me it’s hard to find one person. It’s more of a concert of a bunch of people but I can tell you there’s like three or four entrepreneurs that are pretty high up, pretty well know and it’s Jason Calcanas, Jason Dizare, David McClure who I work for now, Mike Jones. Some of those folks are LA folks. I can tell you I got on their radar and they all eventually hired me and the one technique that I used that always worked. I was sort of like a young scrub, people kind of knew who I was. I had some marketing skills and I would literally email them and say, “Hey this is not good on your site, you could do this.”

And I happened to be decent with Photoshop and I would move their site around and I’d be like this would actually optimize this or that. Or I would send them a bunch of tips. And so I think that helped me stand out because everyone’s going to them saying, “Hey can you help me? Can I get ten minutes of your time?” And I was just like, “Yeah I was just playing around with this and I’ve moved this around and like this.” And they would implement it and then sometimes they’d be like yeah that works. Can you come in and like talk? And that’s how I got to know them and literally they all eventually hired me. And so that was my sort of gateway was going to them, providing something helpful before I even asked for anything and then I took the mentorship once I worked for them. So that’s sort of an easy hack.

Probably have time for a few more questions. What else you got? Let’s go. I like this, the positive stuff. We’ve gone dark yeah. But are you saying best single moment? Like an instance of? Okay.

Jason: Yeah I’ll go. I think there’s lots of them for sure but kind of tying back to my earlier story where we fucked up with a customer I think the moments for me that are always the best is when we get the customer success stories. Kind of like what Elaina was saying earlier. That’s something else. Like golf. It takes one shot to get you back. And so you get that customer that writes you an email, you didn’t prod them for it, they just did it because they were really happy with what you did. Like that to me is just everything. That’s, like every single time that’s like huge celebration amongst the team and chest bumping and high fives and ass slapping. Like it’s everything. And look we’re a B to C company but you’re selling to customers however you do it. And so fortunately we get more of those than the former. But that’s why we do it.

Christine: It’s interesting because I don’t really ever think that I do anything that special. I say I’m just doing a job that many people could do. But I had, there’s a woman actually who came through 500 named Twu Trong who had a company, pivoted around a little bit, she’s Vietnamese and so she was like 30, under 30 in Vietnam and had an acquisition to come back to the States. And so anyway again I helped her a little bit. It wasn’t an investment we had made I just helped her out because I just like her. And when she was doing like the announcement post about this and she sort of did the oh thank you little piece in it she thanked me and like Dave McClure and I think one other person. I’m like well how the fuck did I get on that list? And she like went on and on about it about how awesome I was and I’m like, that’s fucking creep, that’s so fricking cool. So I think that was probably it because I don’t think that what I do is that much of something. But the fact that someone else did, I was like oh, that I like I was like okay that’s pretty cool.

Elaina: So yeah I already alluded to mine a little bit. My story is our director in Atlanta when she got started she was so shy to stand up in the front of a room, to be a leader. She’s CS Masters degree like awesome engineer. But at the first event she was like, “Hi, I’m Erica. This is what we’re doing tonight, feel free to ask my questions.” All right. And she stood at the front of the room for a year. And she was invited the following autumn to speak at three different tech conferences. She didn’t apply she was invited. And she gave a tech talk to a standing room only crowd. And she’s a woman of color. And so now she’s a woman who is a role model for other women in the tech industry. And so seeing stuff like that and these stories that I constantly get to absorb and see is definitely the highlight.

Marcus: For me it’s, well going back to the same mentor story. It was when Qik sold the Skype and it was sort of this vindication of like you guys all wrote these guys off, we believed in them and they just told you guys all that we fucking rocked it. Because it was a large mobile acquisition. One of the largest at that point. So it was a big win for us financially but more so for me it was a massive emotional win because we sort of took a huge risk on these guys. We believed in them because they were good people and they were good talented engineers and didn’t give a shit about whatever anyone else thought about them. And said script, we’re going to take this, bet on these people and it paid out. And to know that these guys were vindicated in everyone’s eyes was incredible. That was the best feeling to be honest. For me honestly it was better than the money. And that’s probably my proudest sort of entrepreneur business relationship wise. LP wise, you know when I closed our first fund and to know that we were able to get outside money and people believed in us enough to give us their money and a large chunk right. It’s like who the fuck are these guys but sure we’ll give them money. And to have that trust and faith in us. And to know certain people who did that. Fully having faith in us more than anything was a proud accomplishment too.

Shaun: I just have a general attitude that my success comes from the success of others so I’ll kind of frame it that way. The first time I had somebody who worked for me become a successful entrepreneur on their own and then thank me for it was just.

Rob: That was good too yeah. A total. It was a single message, you changed my life. And I was like oh my God it was actually worth it, all the shit.

Shaun: Yeah exactly. Not even realizing that that was what, you know I certainly never set out to create that for somebody else but it did immediately give me pause to think about what the hell am I doing and why am I doing it and this is the greatest feeling I’ve ever felt. And then doing that for other customers and companies. Providing a solution or solving a problem for somebody that makes them more successful. Wildly successful. Is another kind of high point. It’s not about anything other than that. Just trying to make other people successful and if they show you gratitude and appreciation for it. But that’s what it’s all about.

Rob: Yeah I think like success is the best revenge sometimes. I think that’s something to think about. Also for you guys, like for founders specifically like that moment may come when you are walking by a window somewhere and you look in and someone’s using your shit. Like that so time was always interesting. And one of my last businesses was clothing and I saw someone wearing the clothing in public and it was like wow, I actually made an impact. Or you’re at a party and someone talks about it. So those are little things too. And especially if you’re engineers and I guess other sort of tip, be careful. Engineers hate it when they build stuff and it doesn’t get used. They want it to live, they want it to go out to. So I think maybe as you’re in the dark days be just thinking about like at some point I’m going to corner and somebody’s going to be using my stuff and it’s going to dramatically materially impact their life. And that’s a good feeling.

All right. One or two more. Good question. Advisor compensation. Do you give advisor shares to everyone? What do you guys say?

Marcus: I liked the feedback about mentors. You want to get mentors who buy in and believe in you and they get rewarded by interacting with you and grooming you. I actually think that’s the same thing with advisors personally. If they’re more in it for compensation you know that their motivation is much more of a base motivation rather than a personally and emotionally engaged aspect so you’re less likely to get their full sort of commitment or mind share. So I think that if you have to motivate them through shares or compensation of some form you, in some situations it’s worthwhile but you should realize that your engagement with them is much more of a transaction rather than a relationship. And so be cognitive of that more than anything. But sometimes you do need to open doors through that way. But just realize that that’s how close your relationship is. It’s a cash basis.

Rob: Jason do you have any advisors on Lender?

Jason: Yeah we have two advisors and one in particular, yeah he has advisor shares. It’s a small amount. I’ve been approached by other people that want to be our advisors and they say shit like yeah I’ll do it for 2% and I’m like no. Are you fucking crazy? And it’s always about yeah we’re going to introduce you to so and so and this and that and this and that. I’m like well why don’t you just do that anyhow? Why do I have to give you 2% of my company to do that? I just always felt, it just didn’t feel right. But other advisors, I want them to have some sort of monetary compensation at some point right. I mean this one guy.

Man: Right that’s the difference. We have advisors in our company. They never asked us for compensation. We asked them would you be an advisor and they said yes and then we offered them compensation.

Jason: Yeah totally.

Audience: That’s the important part.

Christine: And also I’m assuming those people don’t have deliverables. Because I know I’ve had, I’ve seen people that have advisors that actually, they either have a specific deliverable thing that they’re doing for the company and they’re not going to charge the company. It’s something that other people do pay them to do. And because of the personal relationship, again there’s always going to be something personal so there’s some trust basis. They’ll say yeah instead of taking another client I’ll spend that time with you and they get some shares for it. And in those kind of situations, and sometimes it’s providing strategic advice. Like something they have a depth of information.

But it’s really structured, it’s not just they’re on a list and maybe you talk to them once a quarter. Like they’re actually being tapped as you’re doing prior development or whatever. I’ve seen people get anywhere, because I think this is the actual question to, anywhere from a tenth of a percent to like maybe a half of a percent. And that’s something that vests over a very short period of time. Like don’t do a four year advisor agreement do a 12 month. 12 month at vest monthly so you can cut it off. Like when they’re not able to help you or you finish what you’re working on or if you’re just super friendly let it keep going just because you want to have them be rewarded if you do well. But make it very, very short time and for very small amounts. And then using those amounts assuming that you haven’t really raised either any money or not very much.

Rob: Yeah I think that’s like, Adam has a story he can talk to you about. Someone asked for 10% I think?

Adam: The shark tank.

Rob: The shark tank. The shark asked for 10, he literally was a shark.

Adam: [Inaudible 00:51:49].

Rob: Got it. Seems fair. The other thing I, well the other thing I worry about to is the pokey men of startup advisors, got to collect them all and they’re just out there getting equity from everyone they can because they know once they get it, especially if they get it vested, like they’re in good shape and it doesn’t matter what they do long term. I love the idea of short engagements so you can sort of see what they’re doing. Most advisors I see it’s like yeah they’re amazing for one month and then it’s like ghost town.

Christine: But if you only are compensating then that’s fine.

Rob: Yeah there you go. Gives you some protection.

Christine: Totally fine. Four years is ridiculous.

Jason: Dave McClure always told us that if you’re get an advisor look if you get a year out of them you’re lucky.

Rob: That’s a long time.

Jason: That’s a long time. And it depends on how you structure it. Like I meet with one of advisors or I did for the first year, crazy enough. Once a week for an hour and it was scheduled and it was like, like I live and die by my calendar and if for whatever reason I was just too crazy to reach out to Mark and be like hey when are we meeting? He would reach out to me and be like hey when are we meeting? So he, he believed and he got me through some crazy shit in the first year. So I’m forever thankful to him and we still keep in touch. I probably only see him now like once a month but that’s plenty. He got me through the first year and that was really why I wanted him there because he had been through this before.

Woman: [Inaudible 00:53:14].

Jason: I gave him 25 bips. Yeah.

Man: [Inaudible 00:53:20].

Jason: Bips. .25%, not talking bips a lot.

Rob: But notice like…

Christine: Not bankers.

Rob: But notice these are a fraction of a percent. These are not percents. These are not one to five percent which some people might push for.

Man: [Inaudible 00:53:38].

Rob: Yes. Yeah is that a cop out.

Christine: I have a whole slide pack on this.

Rob: Yeah.

Christine: I do a whole slide pack on bad responses. So I think that it’s always code for something. I mean all of the answers are code for something else right. So to the extent that I think you will accept my feedback, do something useful with it and I like you enough to bother with you. Like why would I want to talk to you again ever? Then someone will give you useful feedback. To the extent they don’t like you, they don’t think, they think you’ll get defensive or whatever they won’t bother giving you anything other than oh you’re too early. So think about that. There’s a little bit of you draws that out too.

Some people when you break up you just don’t give them a reason because they’re just going to bug you. It’s true. But usually when people say it’s too early it means they don’t believe your story and so you have to have traction before they’ll take something on faith. So to the extent there are things in your story that you’re telling that are hard for someone to swallow for whatever reason. Usually it’s too early just gets trotted out and thrown over right. And so when you hear someone say it’s too early say okay so is it, what’s too early? Is it the market? Is it the maturity of my team? Is it my customer traction? Like what are the things that would give you some comfort that my story is shaping up to be true? So you can either walk away and say okay that’s a bullshit answer, which it is. Or just go ahead and ask the question. And say okay I’d like to make this into useful feedback. What do you mean by too early?

Rob: So you think a good investor would say it’s too early, I need to see you at bullet point one, two, three.

Christine: Well they would skip the too early part. They would say something like I don’t really believe that that’s going to turn into a market. I’d want to see at least a couple of companies in the space that are starting to get some customer traction. Or they might say something like I don’t believe you’re going to be able to find a CTO or I don’t believe. There’s something they don’t believe right. It’s a question of can you get them to tell you what that is?

Shaun: What she said.

Marcus: I would add, exactly what you said for sure. The one thing I’d add though is if you went through eight meetings and they say that to you there’s a good chance that if you’re doing like a series A or B round that they’re actually doing diligence on a company they do want to invest in and they were just fishing with you to get data.

Man: [Inaudible 00:56:04].

Marcus: Yeah so I mean there’s a three letter acronym firms in Sandhill Road who frequently do that kind of shit and we know about them as earlier stage investors and if you get the right early stage investors they’ll tell you, they’re stringing you along. I mean I’ve had a situation where one of my companies went through literally eight meetings with a three letter acronym firm, I’m not saying who. And two weeks later they invested in their competitor right. And they said oh this isn’t for us and then they literally invested in the competitor two weeks later.

Man: [Inaudible 00:56:32].

Marcus: Yeah. I’m not getting there.

Rob: But there’s a few thankfully so yeah.

Marcus: The thing is that I know it and my friends know it and we talk about it and it’s not something that we expose out in public. It’s something important that we know but I don’t necessarily think that it actually does a lot of firm because it’s the whole firm. Because in this particular case it was one unscrupulous partner. And I happen to know that that partner goes on to do shifty shit right. But I don’t see the value in just spilling that out openly. Other than let’s get a pitchfork and go and hoist this guy up. Which I also don’t think is necessarily a fair way of judging people so that’s why I don’t do that.

Christine: And in the case of something like that it might also be that someone had that many meetings with you and they were convinced they could get that deal through and they were overruled by somebody else, there’s someone’s vote they couldn’t get. And rather than say well my partner wouldn’t say yes. because A that’s throwing the partner under the bus which publicly is a bad thing and then B it makes them look like they have no sway inside their team which also is a bad thing because people won’t bring deals to them if it looks like you don’t have sway and you can’t get the deal done because someone overrules you. So there’s internal politics that sometimes sit behind it’s too early.

Man: [Inaudible 00:57:50].

Shaun: Full body cavity search.

Man: [Inaudible 00:58:03].

Christine: How big a doll are we looking for?

Man: [Inaudible 00:58:08].

Rob: You’re on your seat five round.

Man: [Inaudible 00:58:11].

Christine: For a half a million bucks that’s ridiculous. That’s yeah.

Man: [Inaudible 00:58:16].

Rob: It sounds like it was more competitive intel. I did one that was five meetings which is exactly what she was talking about where there was one founding partner who just was not sold and they kept trying to get me through other partners to help sell him and in the end he just couldn’t get on board. They didn’t tell me that but I heard through the back channel.

Christine: Yeah because no one wants to expose that. It looks like weakness and they’re not going to look weak to you.

Man: [Inaudible 00:58:38].

Rob: Oh you gave them free stuff too. Sounds like they just wanted free guitars.

Jason: But did you really want to work with them?

Audience: Yes.

Jason: So you were like yes.

Man: [Inaudible 00:58:53].

Rob: I thought you were doing it just to work your way through college.

Man: [Inaudible 00:59:01].

Rob: Plan B.

Man: I’d like to get you guys’ thoughts on, like so you were saying, at various points there’s this concept of like adult supervision.

Christine: What’s a junior entrepreneur to you?

Man: [Inaudible 00:59:22].

Marcus: So I got an answer for this. First and foremost there is no categorical way of doing things right. Usually when they’re saying there’s adult supervision needed or on the table it’s because someone on the team is fucking it up right. If everyone’s actually responsible and taking care of their shit and delivering it’s not a problem. Adult supervision just means that someone’s not doing their job that they’re supposed to be doing.

Christine: And they don’t know how to get rid of that person so they get adopt supervision.

Marcus: So now there’s another point to this though is that when you’re very early on you don’t see as much of this “adult supervision” other than advisory right. In advisory capacities. You do see people getting switched out later on. And this kind of goes back to a friend of mine, I like to harp on, I talk a lot about is that seed in series A, very early stage is an art form. Later stage is a science. And so when you’re very early in a company it’s evolving so fast and it’s all about creativity, it’s about re-execution rather than sort of. Creativity right. Let’s just put it that way. It’s about creativity.

Later stage you’ve already figured out the model, you’ve figured out the path that you’re going on so it becomes a science because there’s nothing you do other than just change the input. So one dollar in means X dollars out. This is already set that way. So you can change the pieces out because they’re predictive. You know what’s going happen. If I change a piece out this is going to happen. So people become more commodity pieces at that point. So then you start saying adult supervision in that case is thus guy doesn’t produce as much results. And so it’s code for I can get a better guy to do this because it’s already predictable right. But if you’re talking about in the early stage and somebody says adult supervision around the table it’s because somebody’s not fucking delivering right. And it’s just a euphemistic way of saying that but ultimately it means that somebody’s screwing it up.

Because I’m not going to change a team that’s producing and functioning. I would never do that. I would never touch that right. I would never agitate in any way that other than continue to support. So if it comes to a case where I have to bring somebody in it’s because I feel like somebody’s not working correctly. And usually everybody else around the table knows that. It’s not a surprise. It’s uncomfortable because of like founder B isn’t delivering as much as founder A and C but everyone knows it. And it just sort of continues to become like a bad apple in the barrel over time if you don’t change it.

Rob: Yeah I see a lot, the founder here she is weak n a few areas and the supplemented COO. The experienced COO. I’ve definitely seen that play quite a few times. Adam?

Adam: [Inaudible 01:02:20].

Rob: What would you do? Would you go to the founder and say I need you to fix this before or would you say we’re out?

Marcus: It depends on how big the distribution. It’s pretty echoey in here so I didn’t hear you. Okay so it really depends on how much on the cap table that other person owns right. If it turns into a situation where the company becomes un-financeable in the future because of that situation that it needs to be resolved. And unfortunately the reality is the company needs to figure out a way to re-balance the cap table between the new stakeholders in the company that are pushing the company forward. I actually think that’s a fair thing to do.

If the company can’t get financed because of this liability then you need to do what you need to do to get the company moving forward. That’s your fiduciary duty as a board member, the sole board member usually as a founder. So that’s kind of the reality. I understand that it’s not palatable for many people but that’s the reality. If you need to take cash and you need to dilute to do that then that’s what you’ve got to do. But if you’re talking about from the investor perspective investors are God damn lazy. They are really fucking lazy. They do not like rolling their sleeves up, they do not like fixing things. They want everything served to them on a perfect silver platter. They’d just rather take the next meeting and move on. And so a lot of times you’ll just see the VC’s pass right.

Christine: [Inaudible 01:03:51].

Marcus: One second. And so what you need is either you clean it up before you let them pass and you go and pitch them or you find a VC who actually gives a shit enough to work with you to make it happen.

Christine: Yeah some VC’s would pass on it but I don’t think it’s because they’re too lazy I think it’s because it’s too much risk. I mean financially it’s too much risk. So when I see that on a cap table I’m going to ask one of two things. One is how long has that person, again it depends. How long did that person actually work? If that person spent like ten years on the thing like I’m probably not going to bat an eyelash if they have some chunk of the company because they freaking worked on it. But if it’s they just came through some accelerator and they worked on it for six months and they’re gone and you were too stupid to give them a reverse vesting schedule which is usually what that means is someone was too stupid to do a reverse vesting when they incorporated. That’s why reverse vesting is smart.

I’d say okay so how do you want to fix it? And you telling me how you want to fix it I put right in line with your financing and how much money do you want to raise. And so I’m looking at your cap table and your option plan and how you spend an option plan and how big an option plan you need exactly the same way as how much I think you need to raise and what you’re going to get done with it and how long that’s going to last right. And those two things have to match. And so if you come to me and say okay I had a CTO who’s gone, that was my co-founder and I was a dumbass and I didn’t reverse vest him so he walked away with the shares. Then I’d say okay so how much is it going to cost you to get another CTO and the shares you need for that new CTO better be bundled into your option plan and if you need to be re-optioned because you’re getting deluded then that needs to be in the option plan and that’s part of what you present to me as what you need. I need this much cash and this big an option plan. Done. And out of that action plan I’m expecting I get this, the new CTO gets that. Whatever. And I don’t think that’s me rolling up my sleeves. That’s me asking you do to the work. You’re the one who tells me you what you need to do. I’m not going to fucking tell you what you need to do.

Marcus: [Inaudible 01:05:52].

Christine: Yeah well because its. Well because you know what it’s like if he’s, if he’s not savvy enough to realize that that needs to be fixed and he doesn’t bring it up they don’t want to, yeah they’re not going to educate.

Shaun: The reality is that there’s more of you than there is of the money to give to you. So it’s a classic law of supply and demand and the attitude, the conventional wisdom on both sides, having been on both sides of this is that long after all the money’s gone there will still be more deals to be done. And so this one’s too hard I pass. I’ll wait for the next one. Opportunity costs. Because I have a finite amount of money that I have to make bets on right. We’re going to do 300 bets over the next five years. That’s all we’re going to do so when we see something where things are difficult and, we’ll dig in but we’ll dig in relative to what we believe whether or not what the up side is to that. But beyond that if it’s hairy and it’s going to continue to be hairy not just now but going forward then that hurts you.

Christine: Yeah and that’s like you know, if you’re Uber and you go pitch your VC you’re not just competing against Lift right. They’re not a client. They’re deciding how to invest. So if you’re Uber you’re also competing with like shall I go spend money on sales force and buy some public shares. It’s all sorts of crazy stuff you’re competing with when you want that dollar out of the VC. So you want to be as frictionless as possible.

Rob: One last final awesome question. Just to put the pressure on. Yes?

Woman: [Inaudible 01:07:32].

Rob: What would we like help on. What would we like help on or help with? You want to start down there? Just because I don’t have an answer yet.

Marcus: What would I like help on? Easier fund raising for everyone. Just so you guys know fund raising for VC’s is a massive fucking headache too. On the average for a new fund it takes about 18 months to two years. And it’s a miserable process. But you can build strong relationships too but it’s a miserable process. So really I think what I wish was probably that the folks that would invest in the VC’s were better informed. Because there’s the same scenario. You have dumb money in investors for startups, you have dumb money investors into VC’s as well. And they just sort of chase the public names rather than really doing their diligence. So I wish that information was less opaque and much more transparent.

Because I think that’s the root of all the evil with a lot of venture capital is that it’s such an opaque industry. And it’s a services industry at the end of the day but if we can make that more transparent which Angel List is kind of working towards, but still keep the critical magic source which is people, then I think that would be great. So more help with transparency from the whole industry.

Elaina: I’m running a global non-profit so I need help with everything but right now I’m hiring someone to lead business development and fund raising. So kind of in this theme of fund raising yeah that’s who we’re looking to bring on the team now.

Christine: I think probably what I need help on, I need to clone myself. That would actually really be helpful so if anyone’s got that down.

Rob: Intel must have some kind of secret room somewhere.

Christine: Yeah probably some secret lab somewhere. Yeah because I think that there are so many competing priorities. So for example you kind of expect, “Okay I’ve got X number of investments and I have sort of board level weight I carry at this number of them.” And then three of them have some massive fire or urgent situation all at the same time and everyone’s pissed at me because no-one’s getting enough of me there. And then they’re pissed at me over here. I always have at least half a dozen super pissed at me because I’m not giving them enough attention. But it’s not like I’m not working enough hours or that I’m not working smart enough. So it’s figuring out, I need help probably prioritizing and figuring out how do I say no better. How do I just get enough done. I need to hire someone for that actually. I need like a chief of staff/bitch/sidekick. I don’t know what to call the person. I need a mini me.

Jason: I need a lot of help. But I need help from new VC’s on how to get my old co-founder off my fucking cap table.

Rob: See I knew about that. I was going to, I didn’t know if you wanted me to bring it up but.

Shaun: You know there’s a camera over there right. It’s right there, there’s a camera.

Man: [Inaudible 01:10:50].

Christine: [Inaudible 01:10:52].

Jason: They’re already replaced. It’s done. But yeah they’re out they’re just still on the cap table.

Christine: [Inaudible 01:11:00].

Jason: Me.

Rob: His pride.

Christine: [Inaudible 01:11:08].

Shaun: Help me. Help me.

Rob: This is why we did cap tables 101 so you understand the economics. And that’s why I specifically brought it up. Like founders are always like why am I not fully vested, I’m doing all this work. It’s like this is why.

Shaun: We’re growing our services team. I need more really smart people who know how to help companies develop their markets and get to product market fit. So that’s, we’re just not, we’re understaffed. It’s a nice problem to have. I just need more human capital and less investment capital.

Rob: Super empathetic to founders having been there. I’ve sort of lived the dream and the nightmare so I sort of know the ups and downs. So I think as you guys have success or failure what I need you to do is to push that stuff forward. Especially the failure and mistakes. Those are super expensive and difficult to go through but you’ll find that you learn so much more from that. And so think about pushing that stuff down because you can save someone drama and turmoil. And once you go through it yourself you’ll be like I wouldn’t want my worst enemy to go through that. So don’t just be dependent on VC’s. As Marcus said a lot of us are sort of lazy sometimes or too busy so a lot of the onus is on you as well to sort of help other founders. You know think about what’s happening. Look at Galvanize and these other programs. Like they’re sort of ramping up for thousands and hundreds of thousands more entrepreneurs to enter this eco system. How the hell are we going to support and scale them?

Shaun: God help us.

Rob: I know. It’s going to be scary. Well the market could crash tomorrow and then none of it will happen but if the market doesn’t crash like those people are going to need help so be thinking, especially if you’ve had success. Like be thinking about how you can sort of pay it forward. I know it’s cliché but this is the valley so it is what it is. Cool all right. Let’s wrap up. Let’s thank the panel everyone.