20VC: Why It Is Good Company Funding Has Been Down 6 Quarters In A Row, Why Unanimity Does Not Work In VC Decision-Making & Why It Is Dangerous To Be A Spreadsheet Investor with Scott Raney, Partner @ Redpoint Ventures

Scott Raney is a Partner @ Redpoint Ventures, one of the valley's leading multi-stage funds with over 434 investments, close to $4bn in assets under management and 136 IPOs and M&A. At Redpoint Scott has made investments in the likes of Twilio, Stripe and Heroku, just to name a few. Prior to Redpoint, Scott was responsible for new products at NorthPoint Communications, and before that Scott worked at Bain & Company helping clients in the private equity and technology industries. In Today’s Episode You Will Learn: 1.) How Scott made his first forays into the world of VC and came to be a Partner @ Redpoint Ventures? 2.) Why does Scott think it is a good thing that we have seen company funding down 6 quarters in a row? What does this mean for startups trying to raise? 3.) What 2 types of companies will continue to find it easy to raise in these markets? What types of companies will struggle to raise? Is there market cyclicality or a return to normal more sustainable times? 4.) Why are investors a lot less willing to take future fundraising risk? How does Scott view the optimal investment decision-making process for a VC partnership? Why does unanimity not work? 5.) Why does Scott believe it is dangerous to be a spreadsheet investor? With the bar being higher today, what are the milestones that startups need to reach in order to be attractive from an investment perspective? Items Mentioned In Today’s Show: Scott’s Fave Book: Born To Run By Bruce Springsteen Scott’s Fave Blog: Tom Tunguz Scott’s Most Recent Investment: Hashicorp As always you can follow Harry, The Twenty Minute VC and Scott on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eight is a sleep innovation company. With their latest product, the Eight Smart Mattress, being a bed that literally tells you how well you slept last night, paired with an intelligent sensor cover that measures the quality of your sleep and delivers a daily sleep report. In order to bring you the best product, Eight used anonymized sleep data and feedback from over 10,000 people, to understand which materials and types of mattresses give customers the best sleep resulting in their unique blend of four responsive and high-density foam layers plus one layer of proprietary technology that helps people track and improve their sleep. You can check it out on Eightsleep.com – and if you use the code 20VC you will get a whopping 20% discount! FullContact provides the ability to organize your contacts, gain rich insights into them and therefore build deep relationships. With features like automatically identifying and merging duplicate contacts to the ability to snap a photo of a business card and FullContact will transcribe them for you, so no more lost and loose business cards at events. It is with these features just being the tip of the iceberg, FullContact really is the best all in one solution for contact management and you can check them out on fullcontact.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is the 20 Minute VC with your host Harry Stebbings and I'd love to see you on my favourite platform Snapchat and you can find me there on at H Stebbings. All ads get a personal message from me. However, to the show today and I'm thrilled to welcome Scott Raney to the show. Now Scott is a partner at Redpoint Ventures, one of the valley's leading multi-stage funds with over 434 investments, close to $4 billion in assets under management and 136 IPOs and M&A. At Redpoint, Scott's made investments in some incredible companies, including the likes of Twilio, Stripe and Heroku, just to name a few. Prior to Redpoint, Scott was responsible for new products at North Point Communications and before that Scott worked at Bane and Company, helping clients in the private equity and technology industries.

• 0:40Harry Stebbings?

  I do also want to say a huge thank you to both Tom Tunguz and Ryan Sarver, both previous guests on the show, for the intro to Scott today, without which this episode would not have been possible. But before we dive into the show today, I really want to talk to you about a company that's really changed the way I sleep and operate. Eight is a sleep innovation company with their latest product, the Eight Smart Mattress, being a bed that literally tells you how well you slept last night, paired with an intelligent sensor cover that measures the quality of your sleep and delivers a daily sleep report. In order to bring you the best product, Eight used anonymised sleep data and feedback from over 10,000 people to understand which materials and types of mattresses give customers the best sleep, resulting in their unique blend of four responsive and high-density foam layers,

• 1:23Harry Stebbings?

  plus one layer of proprietary technology that helps people track and improve their sleep. This is perfect for people like me, people who want to be more productive during the day, who use or have used a fitness tracker and wants to take care of their health and fitness and sleep. And if that is you, honestly, you have to check it out on eightsleep.com. And if you use the promo code 20VC, that's two zero V C, you'll get a whopping 20% discount. And with Eight keeping me productive with a home product, Full Contact is keeping 20VC team on top form. With Full Contact, they provide the ability to organise your contacts, gain rich insights into them and therefore build deep relationships with features like automatically identifying and merging duplicate contacts, to the ability to snap a photo of a business card and Full Contact will transcribe them for you.

• 2:07Harry Stebbings?

  So no more lost and loose business cards at events like I Always suffer from. It's with these features just being the tip of the iceberg that Full Contact really is the best all in one solution for contact management. And it truly has changed the way I not only manage my contacts, but engage with my contacts. And you can check them out on fullcontact.com. But it's now time for me to shut up and I'm delighted to hand over to Scott Rainey, partner at Redpoint Ventures.

• 2:36Speaker 01

  You have now arrived at your destination.

• 2:39Harry Stebbings?

  Scott, it's such a pleasure to have you on the show today, having heard such great things from both Tom, Ryan and Mahesh. So I really appreciate you taking the time out to join me today, Scott.

• 2:48Speaker 02

  Well, thank you for having me, Harry. I really appreciate it.

• 2:50Harry Stebbings?

  But I'd love to get started though by discussing a little bit about you and how you made your initial entry into the wonderful world of VC.

• 2:57Speaker 02

  You know, I got a headhunter call many years ago and it was always something that I was intrigued by, but I wasn't sure whether or not at that point in my career was the right thing to do. But I went in for a series of interviews. I had a chance to meet the Redpoint team and really fell in love with them and kind of made the decision to make a commitment to it early in my career. And kind of stuck with it through the ups and downs over the years and have really, really found it to be an incredibly rewarding experience.

• 3:20Harry Stebbings?

  Can I ask, what have you gained in terms of perspective from seeing the many cycles? I'm often told as a young investor today that the true greats have really seen the market cycles and how it affects the startups. What have been your perspectives from seeing the cyclical nature of the industry?

• 3:35Speaker 02

  There's a lot that you can learn. I would tell you though, that I think that's overplayed a bit. I think that the times have changed and evolved, the nature of startups have evolved quite a bit. And so I think it's very, very, it's dangerous to try to apply too many lessons in the past to the market of today. And so one great example, I think it costs far less to start a company, get it up and running today than it ever did before. And so some of the challenges associated with fundraising environments during downturns before are probably not quite as applicable as they once were. That having been said, I think that you can see when there are hype cycles building, when there is irrational behavior that's working its way into the, both the entrepreneurial community and the investment community. And it's always good to have the perspective to understand that, you know, these things don't last.

• 4:18Harry Stebbings?

  Absolutely. No, no, I do agree. You said about the market today, though, and that's kind of perfect segue into what I'd love to discuss right now, which is the current climate that we're in. I heard you say the other day that VC funding is down six quarters in a row, and that's a good thing. So, so talk to me about why you think this is happening first in terms of VC funding being down for six quarters in a row. And then, why is it a good thing?

• 4:39Speaker 02

  Yeah, so I think, you know, just looking 2016 investing relative to 2015 investing in terms of number of deals was down about 22%. And in terms of dollars invested, it was down about 11%. And, you know, I think to put that in perspective, though, that we have to roll all the way back to 2006. And 2006, 2007, we saw the launch of AWS and cloud computing, which has had an enormous transformative effect on the cost of starting companies and getting companies off the ground. And also has opened up an incredible set of opportunities within enterprise information technology as companies transition to cloud. And then with the smartphone, changed the way that people interact and consume services. It's also took us from about a billion connected users in the world to about 3.5 billion at the end of 2016, or about 40% of the world's population.

• 5:23Speaker 02

  So it's dramatically expanded the markets that we're going after as investors and entrepreneurs. And so, coupled with those big meta trends was a dramatic increase in the amount of investing. Running from 2007 through the end or about mid of 2015, when it peaked, we saw a 10x increase in the number of very early stage investments. And we saw 40% increase in the number of, you know, kind of series A and series B investors. Those are just, I think the way I look at it is it just reached unsustainable levels. I think at some point in the middle of 2015, investors woke up and realized they had really big portfolios, a number of companies of which were not really doing that well. And so, I think also sitting atop of a lot of big valuations and recognizing that they're going to have to work with their, their companies to help them grow into those valuations.

• 6:07Speaker 02

  And so, the result was, I think, a lot of people just took a breather. And we've seen a kind of a steady decline since mid 2015. And I think what we're doing is we're going from an unsustainable level investing to something that's more sustainable. We still are at very high levels. We're still at elevated levels. If you go back and look relative to 2006, when these trends kicked off, still even now, a straight line, real nice increase in terms of the level of activities, which I think is warranted because Opportunity set is so compelling. But so I think we're, you know, we're just seeing a bit of a rationalization. I also think that we're seeing a slowdown in company formation and creation. I think entrepreneurs are looking at the landscape and realizing it's harder to find white space right now because there are so many companies out there. It's hard to find opportunities that are truly disruptive. And so we're seeing them take a pause.

• 6:50Speaker 02

  And I think what we're doing is here is waiting until there is a, there's a bit of a, a bit of a shakeout. And there's some attrition from the, the companies that have been funded in white space and opportunities to reemerge.

• 7:01Harry Stebbings?

  Talking about those companies that have been funded. I mean, venture, as you will tell me, absolutely, I'm sure, has always been an industry of the haves and have nots. So with that in mind, I'd love to discuss then, in particular, for some companies in terms of struggling to raise and, and why it's so easy for some and so difficult for others. And what really makes that the case?

• 7:23Speaker 02

  Yeah, like I said before, you know, we look at the number of deals. We were down 22% last year, but in terms of dollars, we were only down 11%. So, you know, people are clearly putting more money into fewer companies. If you look at the amount of venture capital raised over the last couple of years, that is, it continues to trend up. But I think it's, you know, people are still very, very excited about the, the opportunities in the companies out there. They're just becoming much more selective about where they invest it and investing a lot more in those companies. So I think there's really two profiles of companies that have found it more easy or finding it, still find it very easy to raise money. Those are companies with good, solid early traction, good, solid product market fit and companies that are growing and scaling from a revenue standpoint, ready to hit the gas and really start to expand their go to market team.

• 8:05Speaker 02

  And so these are probably traditionally series B companies and maybe a, maybe an early series C company that, that has that traction and momentum. The other companies that continue to find it easy to raise money are the companies at later stages who these, these so-called private IPOs, companies that are very large, very sizable, with significant revenue and have demonstrated viable business models. And those companies are raising massive amounts of money and continue to do so from all kinds of sources. I think the companies that are finding it more difficult are classic, traditional series A companies. Those companies that are trying to get off the ground that have a really interesting and compelling idea, but have not. Had an opportunity yet to demonstrate product market fit. Those companies can get financed and will get financed, but they're finding it probably a little bit more challenging.

• 8:47Speaker 02

  And I think the companies that are maybe are scaling but have more speculative business models, ones that aren't converging on profitability are finding it very, very difficult to raise money. And it's, I think investors are kind of unwilling or becoming increasingly unwilling to bet on the come on businesses that require lots and lots of capital to grow into their businesses.

• 9:06Harry Stebbings?

  I'm sorry, there's far too much there to unpack for a venture nerd like me. So I first have to start with, we talked about kind of the extended period of privatization there. I'd love to hear your thoughts on this, whether you think it's fundamentally bad for the ecosystem because it doesn't provide liquidity to the LPs. And how your perspective is on this extended period of privatization for the industry?

• 9:27Speaker 02

  I'm of two minds. I think, you know, the first way I look at it is I think these companies are going after bigger opportunities than we ever have before as an industry. You know, as a result, they're in growth mode far longer than companies ever used to be. And they, these are companies that are, you know, sizable businesses that continue to grow at just extraordinary rates year after year. And I think the idea of staying private longer and funding that growth and swinging for the fence and trying to build once in a generation kind of companies is a, it's a real, it's a fantastic thing. And I'm, you know, I'm very excited to see companies that are making these kind of commitments to growth over the long run. I do think, however, that the problem is sometimes it allows a lack of discipline to creep into those businesses. And there's something about the bright lights of being a public company that forces disciplines on, discipline on the companies

• 10:11Speaker 02

  and ensures that they're making best use of their capital and behaving in the most responsible way. And so, you know, I worry a little bit about the fact that you don't have that kind of bright light with sterilizing effects on some of these companies. But I think I'm willing to take the good with the bad here and I'm fully supportive and excited to see these companies really trying to build massive, massive businesses.

• 10:32Harry Stebbings?

  I do want to touch though on another element, and it was you said about the series A companies or companies that maybe haven't proven out their business model or their traction points. I'd love to hear your thoughts with that in mind on the bridge round. It's often a point of contention. I'd love to hear your thoughts on whether you believe it is simply because the company hasn't hit Product market fit and it often leads kind of as floodgate have told me before, it's often a peer going to nowhere. Or do you think it is a perfectly feasible funding method?

• 11:00Speaker 02

  I think there's two times you see bridges used. One is when a company is having a tough time raising capital and you want to support the business and hope that they can grow into a set of metrics that will allow them to raise capital. And, you know, I would say that I think the way the floodgate describes it is probably accurate most of the time. It's really difficult, I think, for companies to be able to transition through these periods. And if you've gone out and talked to a bunch of investors and they have decided that it's not something that they're excited about investing, that, you know, that is a, that's saying something about, about the idea and the opportunity. And so most, more often enough, those bridges just don't work. You know, we will do them from time to time as investors because we want to be supportive of our companies in our occasions where we believe that we are doing the right thing for our investors.

• 11:44Speaker 02

  But quite often it is, it is challenging. The second time that we see these things applied is, is really opportunistically where, you know, you're very excited about a company that's doing very, very well. You just think there's an opportunity for the company to hit an additional set of milestones that will set it up for maybe even better, an even better financing than it would otherwise. That it's not a company in trouble, it's actually a company doing really well, but there's a milestone that's six months down the road that could really change the trajectory of the business. And as an investor, I look at it as an opportunity for me to be able to invest more and buy more of a company. And in those situations, I think that that is, you know, potentially a very compelling model and something that's good for both us as investors and, and the entrepreneurs.

• 12:23Harry Stebbings?

  I, I think another big area that's gained a lot more prominence in the industry is also kind of the alternative investment themes that we've seen recently with kind of the likes of genomics and some elements of decentralization and then even the likes of the honest company, kind of almost pure consumer plays. I'm intrigued, do you get concerned when you see VCs enter into these previously unknown markets where kind of software knowledge and domain knowledge on all the traditional software skills isn't maybe so applicable to supply chain logistics in Taiwan for the honest company? Do you get concerned by this?

• 12:56Speaker 02

  Um, I do. I, you know, it's less for companies like the honest company because I think that you See folks that have extensive experience with those industries, supporting these kind of consumer product businesses. But you know, if I look at bioinformatics right now, there's a whole bunch of traditional software investors that are making their way into that space, including myself and Redpoint, spending a lot of time there. You know, I think a lot of us are getting there by following AI and ML and looking at the broad applications of those technologies and how it can disrupt industries. And so we, you know, we come with from it from a, from a good place. But you know, the reality is if we just go back and look at clean tech as an example, where set of software investors and maybe networking investors made their way into the clean tech industry and started investing in supporting capital intensive and operational complex businesses that where scale was the, the key ingredient to success.

• 13:40Speaker 02

  And obviously did not see nearly the kind of success that the industry hoped that we would see in that, that sector. And you know, I see a little bit of that now. I worry a little bit about that in terms of some of the frontier tech spaces that the venture industry is pursuing. There are a set of investors out there that I have complete confidence are, are making good investment decisions based on the context that they have for those industries. But you know, people that go out and read a handful of blogs and then decide that they're going to be investing in these categories are likely to, to experience a lot of pain.

• 14:08Harry Stebbings?

  Absolutely. No, I, I do agree. Um, probably better to have a deeper due diligence process than a blog post or 20 minute VC episodes. But in terms of the raises themselves, it appeared that investors are also much less willing to take future fundraising risk. Why do you think this is in particular now?

• 14:26Speaker 02

  Yeah, it's back to what we were talking about before. I think you're seeing, first of all, I think a lot of people have been burned over the last few years on speculative business models. They, uh, we've invested in companies and we basically hoped that growth would take care of all problems. That if the top line was growing, even if profitability wasn't falling, eventually we'll get there. You know, more often than not, that just hasn't been the case. And so the result is that I think later stage investors are less likely to take these risks that basically that, that assume that growth will take care of all these problems. And so, you know, businesses that, that aren't converging on profitable unit economics or have subpar gross margins, and there are many of those out there right now, are scary for investors because you know that you're going to put in a certain amount of money, but that is probably dropping the bucket relative to what they need to get the profitability. And I'm essentially

• 15:10Speaker 02

  Not only on the company's ability to execute, but also on the company's ability to find future investors that would be willing to take the same risks. And that is becoming harder and harder to predict. And as a result, these companies, I think, are finding it more difficult to finance themselves.

• 15:24Harry Stebbings?

  I do have to ask in terms of kind of the future fundraising element, I'd love to hear how you envision the kind of most efficient investment decision-making process to you. If you could sculpt it from start, how would that look to you? And then how does that investment decision-making process change with follow-on and kind of maybe unanimity or not in terms of voting? I'd love to hear your thoughts on this.

• 15:46Speaker 02

  Well, in terms of our decision process, I think it ultimately comes down that we just want to be a part of companies that we think are going to be really, really big and important. And that have the opportunity to define and create industries and sectors.

• 15:55Harry Stebbings?

  Is it a unanimous voting structure though? Is it a conviction driven on individuals? How does that work?

• 16:02Speaker 02

  We have, we have found that unanimity is a bad thing in venture capital, that, you know, a lot of the, the best ideas are the ones that are the most controversial. And so the way that we work is that you only need to convince one other partner at Redpoint that, that this is a good investment. And if you do, then, then it's an investment that we can do.

• 16:18Harry Stebbings?

  Does that change then for follow-on investments?

• 16:21Speaker 02

  It doesn't typically, those folks constitute the, the team that will be evaluating follow-on investments within the, within the portfolio. And so, you know, it's incumbent upon us to make sure that our partners are up to speed on what, how the companies are doing. And, you know, for us to lean on that partner to help make good decisions. But I do think there are times where it probably would make sense and, you know, these things we've experimented with to have somebody independent, somebody that hasn't been involved with the company to come in every once in a while. Take a look to make sure that we're, we're making good financial decisions for our investors on these follow-ons. But that's not something that we put into practice.

• 16:53Harry Stebbings?

  I do want to discuss though on the theme of follow-on investments, the balance between kind of stubbornness and then achieving the vision that the company's set out. How do you look to really make that balance when acknowledging the follow-on investment opportunity that's in front of you? And ensure that it's not a case of stubbornness, maybe when it's not growing so well, and that it is a case of pursuing the vision.

• 17:14Speaker 02

  Yeah, well, part of that is just the communication you have with the, the team and how you approach the. Milestones that you're going to set for the company. And, you know, we try to establish and set a set of milestones that demonstrate that we're moving in the right direction, that will set the company up for success in terms of achieving their vision, but also will allow them to find external investors to finance the business. And if we're open and honest about what those milestones would be and we can agree with the entrepreneurs and what they should be, then, you know, these decisions become pretty straightforward going forward. The hard part is when the companies haven't hit the milestones. And, you know, I think there, what we have to do is just kind of go back to first principles and say, okay, well, things don't always go the way that we think they will or, you know, want them to. And we have to evaluate whether or not we think the company's still on a trajectory to being the business that we, they hope it can be.

• 17:58Speaker 02

  But there is one other thing that gets introduced to that point. And that point is that once we invest in the company, we've signed a moral contract with that entrepreneur that we are going to support them, that we're going to be there for them. And, you know, that doesn't mean that we're going to be unconditional in terms of just how much support we'll be able to provide. But we absolutely take the contract that we've signed with that entrepreneur and we value it. We believe in it and we think it's super, super important that we're there and we have their backs. And so that certainly is a big consideration in those following decisions for us going forward.

• 18:27Harry Stebbings?

  I'm really pleased you said about the milestones there. Because I'd love to hear your take on what are the meaningful milestones in today's environment? I completely understand that's massively varying for different elements of technology in terms of consumer, SaaS, fintech, whatever it may be. So if we apply it to, say, one of your kind of areas of expertise in terms of SaaS and enterprise, what are the meaningful milestones today in enterprise and where's the bar today?

• 18:51Speaker 02

  Yeah, well, it depends on the stage too. And so there's just so, you know, so many different ways of looking at this. But I think that, you know, the general rule of thumb I have is that for what you're looking for as a part of a series A investment is demonstration of product market fit. And at the end of series A, you should have been able to demonstrate that you have a product that resonates, that solves a big problem and that customers are buying at a certain degree. At the end of a series B investment, what I generally like to see is, hey, you've hired and started to scale your go-to-market team and you need economics are working in a really compelling way. And you're at that point in time looking for additional capital just to essentially scale up that sales team to really go for it, right? And

• 19:28Harry Stebbings?

  Can I ask, series A? Does that level of product market fit achievements, does that actually translate to a to a kind of core metric in itself in terms of is it kind of MRR growth, is it bookings growth, is it kind of a certain level of negative churn, is there elements that you particularly hone in on?

• 19:45Speaker 02

  Yeah, I mean, those are all things that we look at. We are not spreadsheet investors, you know, we don't, we don't try to fit all these numbers into a set of checkboxes and then determine whether or not they're achieving these things or they've met some minimum threshold because every opportunity is different and we, you know, we don't think that's the appropriate way of evaluating these things. But I do think we look at, certainly for demonstration of product market fit, we're going to look at a couple of things. We're going to look at, we will look at MRR growth, we will look at whether or not there's been churn, and we'll also look at growth on existing accounts. But more importantly, what we'll try to do is draw some conclusions based on, for instance, the nature of the customers that you're getting. So are you able to demonstrate an ability to build up a diverse set of customers that span industries perhaps? Another way of looking at this too, and probably the most important way is, do we feel like

• 20:30Speaker 02

  there's some repeatability in the process? In other words, are we finding a common problem and a common way of positioning and a common buyer across these organizations that feels like, hey, you know, if we keep doing that, we can really scale this business? And that repeatability is absolutely essential in the early stages of these companies because it's really the path to profitable scalability.

• 20:50Harry Stebbings?

  Talk to me, you said about the MRR. So before we dive into the quickfire, is that, I'm using this purely as an education for myself now, is there levels of MRR growth that make it more appealing than others, be it, you know, 10%, 15%, 20%? Is there one way you have a kind of signpost in your mind for Series A enterprise?

• 21:07Speaker 02

  No, and I, maybe that's not the answer you're looking for, but it's, it's not because I honestly, I think that, as you said, every situation is different, but I think that there are all kinds of circumstances or situations that provide, or data points frankly, that provide a lot more value than than just MRR growth. And again, it's back to that repeatability. If we're seeing repeatability, but maybe not, you know, kind of steady, consistent growth month over month, but we're starting to see the signs that this is really resonating with a certain set of buyers and a message that's beginning to resonate, that's far more interesting and far more valuable to me as an investor than a company that's grown Fifteen percent month over month M R.

• 21:42Harry Stebbings?

  Absolutely. No, sorry. That was a very difficult question to answer, to ask. I'm sorry for that one. But I'd love to dive into a quick fire round with you now. So I say a short statement and then you give me your immediate thoughts in sixty seconds. How does that sound?

• 21:55Speaker 02

  That sounds good.

• 21:56Harry Stebbings?

  So let's start with your favorite book and why.

• 21:58Speaker 02

  You know, I don't know what my favorite book is. I just finished reading Border Run by Bruce Springsteen and I'm a huge Bruce Springsteen fan. I just think it's a fascinating story. I kind of ragged, richest story and a story of teamwork and I really enjoyed that book.

• 22:09Harry Stebbings?

  What's been the biggest inflection point in your venture career?

• 22:12Speaker 02

  I'd say it was the my first failure, the first company that went out of business and it kind of released me from the idea that you're going to be perfect and allowed me to start to take more risk as an investor.

• 22:21Harry Stebbings?

  What would you most like to change in V C and startups?

• 22:24Speaker 02

  I'd like to get rid of a lot of the noise and the fluff around the space where I just get back to substance. I think sometimes there's a lot of posturing and positioning in this industry that I think is distasteful.

• 22:34Harry Stebbings?

  Can I ask, how do you look to retain that kind of clarity of of mind and vision in such a strong echo chamber that is the valley?

• 22:41Speaker 02

  Yeah, I think that's something I gained through experience and time in this industry where I, you know, I just tend to focus on the things that I think really matter and that is traditionally the companies I've invested in and the investor in the entrepreneurs that I'm working with.

• 22:54Harry Stebbings?

  And then what's your favorite blog or newsletter? What are the must reads when they come in for you?

• 22:58Speaker 02

  That's tomtunguz.com, of course.

• 23:01Harry Stebbings?

  What, and to be fair, it actually is really mine and many guests before. I think he's up to about thirty eight mentions now. So I'm glad to hear that. What about favorite quote?

• 23:11Speaker 02

  If you're walking through hell, keep walking, Winston Churchill.

• 23:14Harry Stebbings?

  Love it. And then final one for the day, the most recent investment publicly announced, that is, and why you said yes.

• 23:21Speaker 02

  We did an investment in HashiCorp. It's a company that we're very excited about that's helping enterprises make the transition to cloud and cloud computing. And we just believe that's a tremendous opportunity.

• 23:32Harry Stebbings?

  Scott, it's been such a pleasure to have you on the show today. I can't thank you enough for all you've done. I really appreciate it.

• 23:37Speaker 02

  Thank you very much, Harry. It's been great.

• 23:40Harry Stebbings?

  And such a huge thank you to Scott for giving up his time today to join us on the show and again a big hand to Ryan Sava and Tom Tunguz for making the introduction, without which this episode would not have been possible. And if you enjoyed the show today and would like to see more from us, then you can follow me on Snapchat @8stubbings with two Bs to see behind the scenes for all things 20 minute VC. But before we leave you today, I really want to talk to you about a company that's really changed the way I sleep and operate. Eight is a sleep innovation company with their latest product, the Eight Smart Mattress, being a bed that literally tells you how well you slept last night, paired with an intelligent sensor cover that measures the quality of your sleep and delivers a daily sleep report. In order to bring you the best product, Eight used anonymized sleep data and feedback from

• 24:21Harry Stebbings?

  over 10,000 people to understand which materials and types of mattresses give customers the best sleep, resulting in their unique blend of four responsive and high-density foam layers, plus one layer of proprietary technology that helps people track and improve their sleep. This is perfect for people like me, people who want to be more productive during the day, who use or have used a fitness tracker and want to take care of their health and fitness and sleep. And if that is you, honestly, you have to check it out on 8sleep.com. And if you use the promo code 20VC, that's 2-0-V-C, you'll get a whopping 20% discount. And with Eight keeping me productive with a home product, FullContact is keeping 20VC team on top form. With FullContact, they provide the ability to organize your contacts, gain rich insights

• 25:05Harry Stebbings?

  into them, and therefore build deep relationships. With features like automatically identifying and merging duplicate contacts, to the ability to snap a photo of a business card and FullContact will transcribe them for you, so no more lost and loose business cards at events like I always suffer from. It's with these features just being the tip of the iceberg that FullContact really is the best all-in-one solution for contact management, and it truly has changed the way I not only manage my contacts, but engage with my contacts. And you can check them out on fullcontact.com. As always, I so appreciate all your support and cannot wait to bring you Founder's Friday with Jonathan Downey at Airway.