20VC: Homebrew's Hunter Walk on Why There Is No Series A Crunch, How To Package Portfolio Companies For The Next Round & Why The Bridge Round Is Not Always A Negative Sign?

Hunter Walk is a founding partner @ Homebrew, one of Silicon Valley's breakout seed funds of the last 5 years. They have investments in the likes of Shyp, the Skimm, Managed By Q just to name a few incredible companies. As for Hunter, prior to Homebrew, Hunter led consumer product management at YouTube, which he originally joined in 2003, managing product and sales efforts for Google Adsense. Hunter is also a thought leader in the industry and his excellent blog can be found here. CLICK TO PLAY In Today’s Episode You Will Learn: 1.) How Hunter made the transition from Google to VC with the founding of Homebrew? 2.) How does Hunter view the bridge round? Does he agree with Mike Maples @ Floodgate in stating, 'it is often not a bridge but a pier to nowhere'? 3.) How does Hunter look to package his portfolio companies for the next round of investors? Does Hunter agree with Jason Lemkin in stating, 'the best investors are those that specifically know the metrics required to achieve the next round'? 4.) Why does Hunter not believe there is a Series A crunch? How can founders look to describe their story in a narrative that is attractive for VCs? What one trait does Hunter look for in founders more than any other? 5.) What is the biggest challenge in the coming year for Hunter with Homebrew? How does he measure his success as a VC? Items Mentioned In Today’s Show: Hunter’s Fave Book: Harold and The Purple Crayon Hunter’s Fave Blog: Ben Thompson: Stratechery Hunter's Most Recent Investment: JoyMode As always you can follow Harry, The Twenty Minute VC and Hunter on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Foundersuite makes the leading CRM for raising startup capital. Since March of 2016, Foundersuite customers have raised over $130M in seed and venture capital. Foundersuite’s CRM sits on a database of over 50,000 investors, which will help you quickly populate your fundraising funnel including a beautiful and easy-to-use investor update tool, and the recently launched a new portal that helps investors and accelerators track their portfolio companies on a single dashboard. For a whopping 40% off a Monthly or Annual subscription use the code “20MinuteVC” at checkout. Greenhouse Software designs tools that help companies hire great people and ultimately build better businesses. Greenhouse works with over 1,500 of the world’s most innovative companies such as Airbnb, Slack, Snap Inc. and Lyft. A wrong hire is not only costly for a company but can also turn an employee into an unhappy one. With Greenhouse’s Applicant Tracking System, companies can make well-informed decisions and hire qualified candidates who are empowered to do the best work of their careers. Anybody who has a company that’s scaling quickly but has trouble hiring and retaining the right people. Visit www.greenhouse.io today to discover how your company can grow.

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

• 0:00Harry Stebbings?

  The start of another week in the wonderful world of venture capital with me, your host Harry Stebbings, found on Snapchat at H Stebbings with two Bs and all ads get a personal thank you message from me. But to the show today, on my word, do we have a crack of you. So after months of admittedly stalking and continuous emailing, I was so pleased to finally get this guest on the show today. So joining me in the hot seat, we have Hunter Walk. Now Hunter is a founding partner at Homebrew, one of Silicon Valley's breakout seed funds of the last five years. They have investments in the likes of Ship, The Skim, Managed by Q, just to name a few of their incredible portfolio companies. As for Hunter, prior to Homebrew, Hunter led consumer product management at YouTube, which he originally joined in 2003, managing product and sales efforts for Google's AdSense. And also, if you have not checked out his incredible blog, you can find that on hunterwalk.com. I really do suggest that.

• 0:45Harry Stebbings?

  But I do also want to say a big thank you to Hunter's partner, Satya, for the intro to Hunter today, without which the episode would not have been possible. But before we dive into the show today, Founder Suite makes software for raising capital. In the last 12 months, startups using Founder Suite have raised over $130 million in angel and VC funding. Founder Suite's investor CRM is the market leader. It includes a searchable database of over 50,000 investors, as well as a beautiful new investor update tool for creating monthly or quarterly progress reports. Founder Suite's used by startups in Y Combinator, Techstars, 500 Startups and every other major accelerator. And listeners of this podcast get a whopping 40% off a monthly or annual subscription using the promo code 20MINUTEVC. That's two zero minute VC.

• 1:28Harry Stebbings?

  Speaking of incredible software, Greenhouse Software designs tools that helps companies hire great people and ultimately build better businesses. Recognized as the 2017 Best Place to Work in the US by Glassdoor, Greenhouse currently works with over 1,500 of the world's most innovative companies, such as Airbnb, Slack, Snap, Inc. and Lyft. A wrong hire is not only costly for a company, but can also turn an employee into an unhappy one. With Greenhouse's applicant tracking system, companies can make well-informed decisions and hire qualified candidates who are empowered to do the best work of their careers. Anybody who has a company that's scaling quickly but has trouble hiring and retaining the right people, visit greenhouse.io today to discover how your company can grow. But it's now time for me to shut up and I'm delighted to welcome Hunter Walk, founding partner at Homebrew.

• 2:18Speaker 01

  You have now arrived at your destination.

• 2:21Harry Stebbings?

  Hunter, it's such a pleasure to finally have you on the show, having heard so much from Satya. So, thank you so much for joining me today, Hunter.

• 2:28Speaker 02

  Absolutely. We've been talking about this for a while. I was gonna try to hold off until I'd actually return some money to my investors, so I could legitimately call myself a VC. But I guess if that was the bar for appearing on this, you'd have far fewer guests.

• 2:41Harry Stebbings?

  But I love the way you said we've talked about this. I think it's more the point that I've stalked you enough that you finally said yes.

• 2:48Speaker 02

  I'm honoured.

• 2:49Harry Stebbings?

  But I do want to start with my favourite question, and it's how did you make your move into what I call the wonderful world of VC?

• 2:56Speaker 02

  Sure. I guess for me, it was really two things coming together. The first was at a point in my career where I created some headspace for myself of, hey, maybe one day, instead of doing, I'll be helping. Whereas I defined doing as spending about 12 years in various product management leadership roles and sort of being on the operating side of the house, figuring that at some point, I would want to, as opposed to betting on my ideas and enabling my team's ideas, help others accomplish building something to the fidelity that they saw in their head. I didn't know if that necessarily meant investing or not, but I started to at least imagine that I could be on the other side of the table. Then, you know, and this is really the origin story of Homebrew itself, my partner, Satya Patel, who you've had on before, he and I had worked together at Google,

• 3:38Speaker 02

  had always wanted to work together again. And there was just a little bit of serendipity of him leaving the product leadership role at Twitter in the second half of 2012, at a point at which I'd been thinking about potentially leaving Google and YouTube after nine years there. So, we didn't start out right away by saying, hey, let's raise a seed fund, everybody seems to be doing it. We really started out more with a commitment to start to think about what it would be like to work together, and Homebrew came out of that.

• 4:02Harry Stebbings?

  I'm super intrigued. You said there about the kind of transition from the operating role to the advisory and the helping. How did you find the often tricky transition from player to coach?

• 4:12Speaker 02

  I think I was aided by a few things in the sense that I haven't been surprised by what it requires, and I felt like I had a good sense of the trade-offs going in. Part of that was having About four to five years making angel investments and doing some advising work with startups while I was at Google. Also, having the privilege to be a small, limited partner in some other venture funds gave me a sense of, you know, what it was like to be an investment manager and what, you know, portfolio management looks like over time. I also, I think, went in with a no regrets notion of, I had accomplished a lot of the work that I had set out to do at the Google, on AdSense, at YouTube, and earlier in my career at Linden Lab, building the virtual world Second Life.

• 4:54Speaker 02

  So I never had any hesitation to say, okay, are you ready to stop building product? And I guess I'd say the one other consideration was now four years in, people say, do you like venture? And my standard joke is, I'm not sure I like venture, I like homebrew. In the sense that I don't think I would be fulfilled to the same degree, being the fifth, seventh, ninth, 11th partner around somebody else's table, being a GP at an existing fund. They're great roles, and I have a tremendous number of friends who are at the larger funds. But I think when I was honest with myself about what motivates me, it was working with Satya and something smaller like Homebrew, than necessarily trying to be sort of a master of industry at a, you know, multi-billion dollar fund.

• 5:35Harry Stebbings?

  That brings about a really interesting question for me. Obviously, now working at Atomico slightly upstream from you, as to what you kind of view, how you view the competitive environment upstream in terms of the VCs? And what you really look for in those upstream investors that you like to work with?

• 5:52Speaker 02

  First thing is, I love to piss them off by calling them late-stage, even though you're doing As and Bs.

• 5:56Harry Stebbings?

  Sorry, I'm just gonna hang up this call.

• 5:59Speaker 02

  What I would say is it changes as a startup matures. At the A round, where we're helping a company that we've likely led their seed financing go to market, we're still very much focused on the particular partner, the person they're going to be working with. Sometimes over, you know, sort of brand name of fund or things like that. Because we think these companies are still fragile, and it's incredibly important to match the right person against the particular investment. They're going to be joining the board, they're going to be, you know, the first large institutional investor coming around the table. And the company could be anywhere from a few months old to Just a few years old. As you start to look at B rounds, C rounds, D rounds, then you might be weighing more the terms and looking at how expensive is the capital.

• 6:43Speaker 02

  You might start trading off between venture investors and strategic investors in terms of what they might be able to bring to the table. For example, we have an investment in a company called The Skim, which is sort of in the media slash audience space. And while their A round was led by a great traditional VC, RRE out of New York, when it came time to have the opportunity to do a B round, they actually decided to go the strategic route because a lot of what they needed next wasn't so much capital, but it was partnership, distribution, skills that they thought they could get from folks like 21st Century Fox and New York Times, who both participated in that round.

• 7:19Harry Stebbings?

  I'm super intrigued. You said there about the kind of movement up funnel there. And that does bring me to an interesting question, particularly for you at the seed stage is, how much of a role does the series A crunch that we hear so much about play in your life? Is it a very prominent feature for you in the progression of your companies upstream?

• 7:36Speaker 02

  I tend to be on the side that there is no series A crunch in the sense that I have yet to find a company that I thought should be able to raise a series A fail to do so. It does sometimes mean that the milestones they thought they needed to hit when they raised their initial seed round have not yet accomplished, and so they need to top off or get a little bit further. But, you know, one of the real conversations we have with our companies as we get to know them post-investment is, what milestones do you need to hit in order to better understand your business, start to de-risk it and be able to tell that story to the next round of investors? And what I'll say at least through first fund and, you know, starting to get halfway through our second fund

• 8:17Speaker 02

  is when we and our founders agree on those milestones and they hit those milestones, none of them have had problems raising an A round. Some of them have raised, you know, second seeds, bridges, seed pluses, whatever you want to call them, in order to get to those milestones. But I just think it's more a factor of the explosion in the number of seed companies and the fact that thus especially for A round investors, you really get to look at these companies and pick which ones you think have. The momentum, the legs to be able to build a venture scale company. So for me, there's definitely great talented teams that might struggle to raise an A round. But it's hard for me to juxtapose that against the reality I've experienced, which is when companies hit their milestones, they tend to be able to raise an A.

• 9:01Harry Stebbings?

  I'm so pleased you said about the milestone set because I often speak to, I'm sure, I'm sure, I don't know if you know Jason Lemkin very well, but I often speak to Jason Lemkin. And he always tells me that the best investors are those that know very specifically the milestones it takes to raise the A and the next round of financing. It's as simple as that. Do you agree with that thesis that kind of the best investors just have that very, almost spreadsheet outlook of what it takes to get the next round?

• 9:24Speaker 02

  I do, but with an asterisk. So let me say why I agree with Jason and then I'll tell you the exception. And I think it's an important exception because it's an exception that in many cases, we are building homebrew atop of. I think if you're investing in areas that are well understood and slightly more mature as a vertical. So Jason, who I absolutely love and am fortunate to be a small LP in his fund, invests exclusively in SaaS where we talk a lot about ARR. We talk a lot about churn. We talk a lot about customer acquisition to LTV ratios. And you get to cross compare a lot of these companies as they hit different milestones. And it just so happens that the time to these milestones is accelerating. People are getting smarter and smarter about launching these businesses.

• 10:09Speaker 02

  And especially if you're somebody like Jason, you're sitting atop a lot of this data and you really have a wonderful sense of what a trajectory looks like, where it'll get you and aren't investor that a number of SaaS founders will seek out to get involved. And there's definitely companies like that that we invest in. We do invest in the SaaS space. We have a company called Bond Street in the SMB lending space. And as more and more people understand the online lending industry, there are certain milestones that they need to hit to in order to look like other high performers in the space. And fortunately, they're doing really well. We also, though, invest in companies that we think buy the A round. The traditional venture investors still may not fully understand the story and it may not yet be expressed in typical metrics. So I'll give you an example.

• 10:54Speaker 02

  In early 2014 is a company called Building Connected in the commercial construction space. And it's a market network that connects GC's general contractors who run these 10 million, 100 million dollar commercial projects and help them manage the bidding process with the subcontractors who are the people who actually do the work. Although it's a freemium SaaS product, and so now three years in, you start to see and understand more of what a revenue curve looks like, so on and so forth. We knew that when they went out for the A, it was still going to be pre-revenue. And it was in an industry, construction, that is tremendously large, trillions of dollars. It's just starting to be touched by software, hasn't yet been transformed. And so if you were going to look at them as just an industrial SaaS company, you'd be looking for a company that was raising its A without revenue.

• 11:39Speaker 02

  And boy, if you're a SaaS investor, there's plenty of companies that actually do have substantial run rates by that point. So we knew that part of our job as a seed investor was needing to go and educate the market about why this was an opportunity and do that alongside the founders. So I'd say Lemkin is totally correct when you're playing in a space where the goalposts are well documented. But I think as an early-stage investor, you also need to be willing to back companies that are going to be misunderstood for a long period of time and help them tell their story to the next round of investors.

• 12:08Harry Stebbings?

  Now, this is one that I always debate on internally myself. And we mentioned that kind of hitting the milestones, not hitting the milestones. When the milestones aren't hit at seed and we progress into that murky patch that seed plus, bridge, seed A, whatever we want to call it, what I'd love to know from you is how you view this round? Is it simply a sign that product market fit hasn't been achieved? Or is it simply an indication that maybe they just need a bit more runway? How do you view this, this kind of gap round?

• 12:37Speaker 02

  You know, I should say that we've participated in one or two of them in terms of a point of entry. So we typically will try to be the first institutional money in, just because we love working with these companies from as early as possible. But we'll occasionally, and we see lots of opportunities to sort of enter in in a meaningful way as they gear up to raise a second seed or a bridge, and we'll look at those. But it's always best, I think, for us to start as early as possible. When I look at them, I try to understand which scenario it is. Is it a case of smart people, smart team, but they're still kind of wandering in the desert? They haven't figured out exactly how to scale. They haven't tested and learned from their hypotheses. And they might look great on paper. They're, you know, smart team in an interesting market. But you know what? Their speed of learning, their rate of learning hasn't necessarily quickened.

• 13:21Speaker 02

  And they're not, uh, they don't have the momentum to head in the right direction. I think those are harder as an investor who might be following on or trying to attract new investors. I think those are harder bets to make. If it's one of two other scenarios, one where the curve and the momentum and the growth is correct, it just took them a little bit longer to start on that curve. I think those are backable. And certainly if a team could go to market and it would have a chance of raising an A, but wants to bet on themselves and get a little bit further, either from a milestone standpoint or because there are strategic learnings that they think will help them understand what they want their A to look like. Those will do every time, both as an internal investor and as a point of entry. That's how we got involved in a company like Managed by Q, which is, which is doing wonderfully. They were already at a revenue run rate and a growth rate that probably could have gotten them an A round,

• 14:06Speaker 02

  but they hadn't yet thought about what expansion at the time out of New York City looked like. And they really wanted to put that plan together because their goal was to raise a Series A that would get them to that next set of milestones and not leave them stranded pre-B round, where, you know, sort of as you climb up the mountain, the oxygen gets thinner and thinner in terms of, you know, ability to attract capital ahead of results.

• 14:26Harry Stebbings?

  You said, you said that about kind of the importance of accelerated learning within founders. I'm super intrigued because we just had Parker Thompson from Angel List on the show. And he said that was the most important trait he can look for in a founder. I've just edited another show where they say the most important trait is the chip on the shoulder of the founder. I'm intrigued. You know, you don't have to choose either two. You can choose either one. But in which kind of trait are you most aligned with and get excited by when you see in a founder?

• 14:53Speaker 02

  That's a great question. I mean, at the stage we invest, right? It's team, team market. So we're always interested in getting to know the people. Sometimes we've known them for years. Sometimes we've known them for months, you know, but sometimes it's a process of just over the course of a few weeks. I think if Sacha and I had to make a decision about any one quality that was present or not present in terms of impacting. A investment decision, it would probably be something around founder market fit or the why? Why are they building this company? We tend to really get excited about people who are bringing a degree of passion, conviction, a missionary zeal towards their company building process, both in the problem they're trying to solve and in their desire to think of their company

• 15:37Speaker 02

  as really their first product and being intentional about how they're building it. I think that's the quality that makes us the best match for a founding team. And hopefully vice versa. What's great about our model with Homebrew, staying relatively small and concentrated at seed stages, we're ultimately judged by the investments we do, not the investments we don't do. So we don't have to be the right partner for every talented founder, so long as we're making a set of six, seven, eight, nine investments each year that will ultimately turn into some number of meaningful, viable, transformative businesses. So we're not afraid of walking away from a potential good investment. If we don't think culturally, we're going to be a great match for that founder.

• 16:17Harry Stebbings?

  Are you a victim of FOMO?

• 16:19Speaker 02

  Uh, no, and I think because of that, it's basically because our strategy and self-awareness prevents a little bit of that. If I was the consumer partner at a billion dollar fund and there were really just a handful of deals each year that ultimately mattered in terms of the physics, the economics of what it means to pull my weight at a billion dollar fund, I might be more susceptible. But at any time, you know, there's any number of wonderful, interesting companies that we should be talking to and there's always going to be a subset of them that correctly or incorrectly, we pass on or we never see. And so we try to focus much more on what we're getting right than worrying about what other people are doing or what we might be missing.

• 16:58Harry Stebbings?

  And speaking of what other people are doing, I always like to crowdsource questions for very special guests on the show. And I crowdsource questions for you, and one very common reoccurring one, was speaking about you before your reputation as now Hunter Homebrew. And a lot of people ask, how did you win deals before the reputation and the 125,000 Twitter followers? Was it their empathy and the care? What was it that allowed you? Build the brilliant brand that you have around yourself.

• 17:26Speaker 02

  Well, thanks. I don't think of us as yet having a brand that we've fully grown into because I think we're only four years in. Sacha and I had the chance to, I guess, hit the ground running in some respects, having had ten to fifteen years of operating experience in the Valley. Sacha having been a venture capitalist before. And Homebrews, because we got to start with a blank sheet of paper, we really got to start with a set of values and a strategy. More so than having to worry about what our positioning looked like vis a vis other venture capitalists. Or trying to take something that had a ten, twenty, thirty year legacy and retrofit it into what we thought seed stage entrepreneurs needed today.

• 18:07Speaker 02

  So if anything, I guess it's just a certain degree of accessibility, transparency and honesty about who we are. But I don't think it was a, you know, I think it would have been much harder for us if we sprung forth without that particular operating history or reputation. Because most of the, you know, at the seed stage, deal flow is more, I think, about what I'd call sort of dark deal flow. Deals that don't get seen outside of a handful of funds than necessarily fifty funds all fighting over and tracking the same company. And so we had enough of a set of relationships, people who we worked with, who worked for us, other co-investors who thought we'd be good additions to the round. To quickly start with healthy deal flow.

• 18:49Speaker 02

  And then it just becomes a question about living up to that reputation for all, whatever it is, for all the Twitter followers, for, you know, the wonderful opportunity to sort of reach new people by talking with folks like you. If we had to pull back to just one thing that mattered, it would be what the founders who work with us tell other founders. Because if we can get to that stage, if we can get to the point where an entrepreneur is, you know, sort of referencing us, we have a great shot of seeing an investment and, you know, ultimately winning that investment. And that's where we want to over deliver, I think, ultimately, and what our founders say it's like to work with us.

• 19:21Harry Stebbings?

  And many of them say transparency and honesty over and over again, from my stalking of you, I mean, my research.

• 19:28Speaker 02

  Thank you.

• 19:29Harry Stebbings?

  But they're not always applicable or widely applied to the VC ecosystem. So I do want to finish today on on an element of what would you like to see change in in the kind of next wave of VC with with newly operational minted VCs hopefully entering the industry. So how would you like to see the VC ecosystem change over the next five to 10 years?

• 19:51Speaker 02

  I'd like to see the venture community continue to embody values, the values that we want the technology community as a whole to persist. And so one of the reasons we're named Homebrew is a nod back to the Homebrew Computer Club of the late 70s and 80s. It was where a group of PC enthusiasts used to meet on Stanford's campus in the early days of the personal computer to just shoot the shit and talk about stuff. It was where Steve Jobs and Steve Wozniak met, a bunch of other hardware startups came out of that. And so we try to make sure that we're growing the pie, not just taking our share of it. I think that holds true within the technology community itself and sort of paying in, giving before you get. But I also think it pans out when we're talking about technology's role within the world as a whole.

• 20:35Speaker 02

  And especially as we move from industrial capitalism to technology-driven capitalism. What's our role within society, within government, within community? I think seeing more and more people make sure that they're giving before they get, not just by holding office hours for entrepreneurs, but by getting involved in politics, by putting their capital behind NGOs, nonprofits, diversity efforts. There's been a movement towards, you know, sort of VCs positioning themselves as all-knowing masters of the universe. Read this blog post. I I think that's all fine. But if you're going to start to put yourself in the public sphere, let's make sure that we're leading with our values and our emotion, not just our not just our intellect, because that's the opportunity we have to continue to set what the the next decade,

• 21:18Speaker 02

  the next 20 years of the technology community look like alongside the founders who are role modeling that behavior, the press that's holding us accountable to those types of choices we're making. So that's my hope.

• 21:29Harry Stebbings?

  And then final question for the quick fire, I have to ask this. You said about the kind of capitalism and moving to to the next world. I'm intrigued to ask in terms of income inequality. And do you think the advancement of tech and the kind of exponential progression of deep tech? That we're seeing will worsen or will help income inequality in the future?

• 21:49Speaker 02

  I think I'm a technology optimist. I believe technology will, if it can grow as quickly as we have the opportunity to allow these advancements to occur, it will continue to expand the pie. And then it's our job to work with private sector, government to help figure out how to deal with distribution and redistribution of that pie. And so my hope is that we allow technology to grow relatively unfettered, but realize that the trade off for allowing that transformation to occur in a fast velocity is that in any transformation, there are inequalities. There are people in society who need assistance through those transformations and we should be willing to pay in

• 22:30Speaker 02

  with capital, with sweat and with time into ensuring that those folks don't get left behind. So I fear slowing down economic and technical transformation because we are afraid of that disruption. But I also fear blindly rushing into this transformation without any consideration for how to support those members of our society too, that see the world changing under their feet and need a little bit of assistance through that transformation.

• 22:56Harry Stebbings?

  But I do want to dive into a quick fire. So I say a short statement and then you give me your immediate thoughts. Sixty seconds or less per one. How does that sound?

• 23:03Speaker 02

  Let's do it.

• 23:04Harry Stebbings?

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

• 23:06Speaker 02

  Harold and the Purple Crayon. It's a children's book. It's about a little boy who has a purple crayon and draws the world around him. Draws himself into a story and it was the first book that I remember gave me the inspiration to say, you don't just have to play in the world as it exists. You can create the world as you want it to exist.

• 23:24Harry Stebbings?

  And what's the biggest challenge you have day to day with Homebrew Day?

• 23:28Speaker 02

  I think right now it's the fact that we've hit the ground running. We're really proud of what we've accomplished so far. But we are going to be in that period coming into Fund Three in 2018, where we want to start being able to raise our funds off of how Homebrew is doing and not just our reputation or what we were able to do before Homebrew. So it's managing the fact that a lot of these companies are still early stage and are going to be growing as private companies for a long. Long period of time with wanting to put tangible runs on the board for our investors and show that we're good, responsible managers of their money. Fortunately, our LP base is institutional and in other venture funds, so they know it takes a while. And they want us to continue to grow large plants, not harvest them prematurely.

• 24:12Speaker 02

  But I have a real urgency to prove that we are good, worthy holders of their capital.

• 24:17Harry Stebbings?

  What's the vision for Homebrew? Is it a one billion mega fund when you return 10x on four continuous funds?

• 24:24Speaker 02

  We talk about this going into each fundraise, but our defaults are usually switched to the same as the previous fund. So we want to stay, we're in year four of a 20-year roadmap. We want to stay focused on early-stage companies that we can put not just capital, but time behind. So it means a relatively concentrated investment philosophy. And we want our legacy to be the companies that we worked with over five or six funds, not necessarily something that's intergenerational or lives on beyond us. But like I said, it's still early. It's year four of what could be 20 years, so we reserve the right to change our mind.

• 24:59Harry Stebbings?

  What's your favorite blog or newsletter? What are the must-reads for you when they come in, obviously other than listening to the 20 Minute VC?

• 25:04Speaker 02

  Exactly. I've always loved Ben Thompson's writings. I had the chance to get to know him a little bit personally before he became as popular and famous as it is today. I think $100 a year, whatever he charges, is a bargain. And it's the one email slash column that I will make sure that I don't end a day without reading, unless I'm going to save it to pocket and read it a second time or a third time to really understand what he's saying.

• 25:29Harry Stebbings?

  And then finally, what's the most recent publicly announced investment? And why did you say yes?

• 25:34Speaker 02

  It's interesting. In our second fund, most of the companies, even those that are operating, haven't yet been publicly announced. I think it's a mixture of announcing your seed is almost the start of your Series A fundraising these days in terms of inbound, and also a bunch of folks who aren't necessarily consumer-focused apps or even located in the Bay Area, so that they just want to grow without attracting attention. But one that was recently announced was a company called Joy Mode out of Los Angeles. It's Joe Fernandez who started Clout. It's his next company. And it's really, it's a membership-based That allows you to own less and do more. So essentially, families, couples, singles, who want to, for example, let's say, throw a movie night in their backyard, you just open the Joy Mode app and it'll bring over,

• 26:17Speaker 02

  you know, six beanbags, a projector, a screen, a popcorn machine, and a bunch of other stuff, and that ranges from, you know, things you can do with groups to things you can do by yourself. And it's part of Joe's notion that we're all gonna spend less money on ownership and more money on experiences. And he's such a great founder for this, and that we led that seed round, I guess, um, early 2015? Spring 2015? And it just sort of got announced after they'd been working stealthily and in beta and under different brand names in LA for the past year. Perfect, and now we get to roll into the bonus coverage, right? My lightning round of you.

• 26:51Harry Stebbings?

  Of course, sweetie, we can turn the tables, let's do it, okay.

• 26:54Speaker 02

  Okay, okay, like you said.

• 26:56Harry Stebbings?

  This is 60 seconds.

• 26:57Speaker 02

  Yeah, 60 seconds, five questions, 60 seconds, and we'll go.

• 27:00Harry Stebbings?

  Okay.

• 27:01Speaker 02

  So how much time do you put into each episode? And how does that time spend across sort of research, this interview itself, and post-production?

• 27:09Harry Stebbings?

  Sure, so it's about between eight and 10 hours an episode. It's two hours of research for every single show. Everything from looking at every tweet you've sent in the last year to every blog post you've written in the last year to pretty much everything you've done, ever. And then I'll compile the schedule. And then in terms of the recording itself, it's about 28, 30 minutes, taking out ums and ahs, it goes down to about 24 minutes. And then the editing takes two hours because ums and ahs are frequent for VCs who aren't always the most fluid talkers, unlike you, Hunter.

• 27:41Harry Stebbings?

  And, and so that's another two hours. And then the marketing and the distribution side is another four, without a doubt. In terms of, I'll email every single person who is connected in some way to Hunter. You say all your partners, your portfolio companies, and I'll ask you to share the episode to maximize distribution.

• 27:58Speaker 02

  I'm thrilled to be part of that machine. Have there ever been things that you have to edit out for either appropriateness or inappropriateness? And are there things that, do those usually come up from the VC? Or maybe their, you know, their comms team after? Or is it something that you decide, hmm, I don't? Know if they want this in here, they might regret it. So let me remove it.

• 28:17Harry Stebbings?

  Ultimately, my opinion is always that it's a product that you have to be happy with because if you're not happy with it, you're not going to share it. And if you're not going to share it, I'm not going to get more listeners, which is always my mission. So it is always up to you in terms of the content that's in there. But you know, there are certain things that we've taken out before. Last week, someone farted in the middle of the show. And and then, you know, it wasn't a silent one and he thought it would be. And so there's that. And then there's often, often, you know, someone says about a portfolio company before it's announced, or they'll say about a partner leaving. We once had someone who spoke about partner misconduct and then his PR team was like, you really can't talk about this. And so that was taken out. So so largely it's portfolio companies and then kind of unannounced news.

• 28:58Speaker 02

  I could guess the unannounced news, the flatulence surprises me, but that's what the lightning round is for.

• 29:04Harry Stebbings?

  Was hilarious. I mean, I'd love to keep it in for the comedy factor.

• 29:08Speaker 02

  I've heard you give out your Snapchat ID as part of where you want to drive.

• 29:12Harry Stebbings?

  Do you know what, Hunter? You have an accepted me.

• 29:14Speaker 02

  Well, tell me more about why you want to build a following on Snapchat.

• 29:18Harry Stebbings?

  I I think for me in particular, the conversion is better than any other channel that I've seen. So if you compare it to like my newsletter whereby I will have, say, a I think currently it's about a thirty six percent open rate. My Snapchat is currently a sixty four percent open rate and I actually use, which I know I'm pretty pleased with. And you also, I use a brilliant tool called Snaplytics, not an investment or a sponsor, but they're just brilliant. And they allow me to break down all my analytics for Snapchat channels. So I can optimize conversion, I can A B test on Snap stories and really help to build a community and really an army of loyal supporters. And I've actually made many friends through fans from Snapchat.

• 29:54Speaker 02

  That's great. One last lightning round question. Did you have any nicknames as a kid?

• 29:59Harry Stebbings?

  What type of question is that, Hunter?

• 30:02Speaker 02

  Your fans want to know.

• 30:03Harry Stebbings?

  Oh, they do. Yes, I I did. So I was also extremely obese when I was younger. So when I was sixteen, I was a hundred and ten kilos, which wasn't quite so healthy. So my brother used to call me Augustus from Augustus Gloop and Charlie and the Chocolate Factory. And then also Basil, my father called me Basil, or you guys might call it Basil if you're in the States. Because my name is Harry and then there's a natural alignment to Hazel and then Basil followed along and then also Hazard. Everyone still calls me Hazard everywhere I go.

• 30:32Speaker 02

  Well, good. Well, I hope that I remember those for when we meet in person. Not Augustus, but the fonder ones.

• 30:38Harry Stebbings?

  Well, Hunter, thank you so much for turning the tables. I seriously appreciate it.

• 30:42Speaker 02

  No, I appreciate it and I hope you have a great holidays.

• 30:46Harry Stebbings?

  So much fun with Hunter there and I want to say a special thank you to him for all he's done for me in the show. I really do appreciate it. And if you love the show, stay with Hunter and want to see more from me, then you can follow me on Snapchat at H Stebbings with two Bs, or you can head over to the new blog on mojito vc.com. You must also check out Hunter's blog on hunterwalk.com. It really is always a must read for me. But before we leave you today, do not forget to check out Founder Suite. Founder Suite makes software for raising capital. In the last 12 months, startups using Founder Suite have raised over $130 million in angel and VC funding. Founder Suite's investor CRM is the market leader. It includes a searchable database of over 50,000 investors, as well as a beautiful new investor update tool for creating monthly or quarterly progress reports. Founder Suite's

• 31:29Harry Stebbings?

  used by startups in Y Combinator, Techstars, 500 Startups and every other major accelerator. And listeners of this podcast get a whopping 40% off a monthly or annual subscription using the promo code 20MINUTEVC. That's two zero minute VC. Speaking of incredible software, Greenhouse Software designs tools that helps companies hire great people and ultimately build better businesses. Recognized as the 2017 Best Place to Work in the US by Glassdoor, Greenhouse currently works with over 1,500 of the world's most innovative companies, such as Airbnb, Slack, Snap, Inc. and Lyft. A wrong hire is not only costly for a company, but can also turn an employee into an unhappy one. With Greenhouse's applicant tracking system, companies can make well-informed decisions and hire qualified candidates who

• 32:13Harry Stebbings?

  are empowered to do the best work of their careers. Anybody who has a company that's scaling quickly but has trouble hiring and retaining the right people, visit greenhouse.io today to discover how your company can grow. As always, I so appreciate all the support and I cannot wait to bring you Wednesday's episode with Josh Brynlinger at Jackson Square.