E390: Ron Rofé on AI, Founder Obsession, and Venture Returns

What if the best venture investors aren’t chasing the hottest sectors—but the founders who would still be working on the problem long after the hype disappears? In this episode, I sit down with Ron Rofé, Co-Founder and General Partner of Rainfall Ventures, to discuss why founder quality matters more than industry trends, how non-consensus investing creates outsized opportunities, and what he has learned from backing over 120 startups and 230 founders. Ron shares the stories behind investments like Robinhood, Webflow, and Alma, explains why he prioritizes resilience over ideas, and discusses the founder traits that consistently predict success.

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

• 0:00David Weisburd?

  Ron, nearly ninety-plus percentage of venture capitalists today are exclusively investing into AI. You're not. Why not?

• 0:08Speaker 01

  I would say that an amazing team and business can come out of anywhere, out of any industry or out of any channel. And I have invested historically in AI companies, but it's not my focus. And the truth is, I have no focus but to find amazing teams to invest in. And the problem I had over the years after being in different cycles is that when there's consensus investing and everyone is focused on the same thing and then a lot of VCs are throwing money there, it clouds the market and it's hard for me to understand if the team I'm looking at

• 0:51Speaker 01

  is truly solving a problem they care about or they're just excited about an industry where there's a lot of money being thrown there. And I don't know if they're truly committed to it long term. So that's the reason I try not to focus on what everyone else is doing. Having said that, I have a handful of AI companies that I've invested in that were a little bit before all the excitement and hype and it's teams I've gotten to know over a long period of time. So I have a company called Convey, ex-Nvidia founder, immigrant that I really, really trust and I know that he's doing it for the right reasons and won't give up. And no matter how challenging it will be or when the VC market dries up for AI, he'll still be working on the problem he's solving.

• 1:35Speaker 01

  We have Harmonic that Vlad Tened from Robinhood and Tudor started. I invested in it two and a half years ago. I know Vlad from our investment in Robinhood for many, many years. And I think it's extremely exciting. So it's not that I say no to AI. It's just I want to make sure that the team I invest in is the team that I know is committed to something. And I think AI is another technology that is existing now and there'll be more technologies. And I want to find the teams that I know that are going to keep working on the problem in the customer segment and industry that they're excited about and they'll start using other technology along the way like AI right now.

• 2:12David Weisburd?

  You referenced other market cycles and how you've seen consensus investing go wrong. Maybe double click on that and give me a couple of examples.

• 2:21Speaker 01

  I can say that I like to focus on the positive and what went right for us. And I can say that, for example, with Robinhood, we were early investors there, is that when we met Vlad and Baiju, no one was looking really at fintech at the time. Everyone at the time was looking at the on-demand economy, the sharing economy. SaaS was a big field at the time. And sure, there are amazing companies that came out of there, but I saw an amazing team and I didn't want to miss out the opportunity on working with a team that knew the space really well. At the time, they were working on high-frequency trading platforms for institutions, financial institutions.

• 3:03Speaker 01

  And I saw this amazing team, they knew the problem really well, and I didn't want to miss out on the opportunity to invest in them. So I invested in it. But if I would have just focused on the on-demand, sharing economy, SaaS, maybe I would have made some good bets. And I did make some good bets in that space, but I didn't want to miss out on working with a team like that.

• 3:22David Weisburd?

  Just to steel man the argument of investing almost exclusively into AI today. The argument for investing almost exclusively into AI is that the outcomes are just so big that every dollar, every incremental dollar, the opportunity cost is too high to invest into other spaces. In other words, the smart VCs, they're not saying that there's no interesting consumer companies or maybe space companies or American dynamism companies. They're just saying that the opportunity cost and the cost of capital for not investing into AI is just too great of a risk.

• 3:57Speaker 01

  I think that the opportunity cost for missing out on working with an amazing team is much higher than on investing in what everyone else is investing in right now. And I think Robinhood is a good example of that because...

• 4:15Speaker 01

  Again, at the time, no one was looking at fintech. And I saw this brilliant team, I backed them, and they became a category leader. So, a good deal can come out of anywhere and out of any industry. How many investors over the four years when the Airbnb founders were starting, didn't even pay attention to them, just some guys trying to rent people's apartments? I know an angel investor that was at the same Y C batch with them and was sleeping on their couch, and he thought they were dumb. He's like, what are these guys doing, making cereal and serving it to people at their apartments? But he missed the fact that there was an amazing team that was resilient and wasn't giving up and continuing to work on a problem that they were getting more and more familiar

• 5:00Speaker 01

  with, and then eventually became an extremely successful company and a category leader. So I think the opportunity cost of missing out on a team that has high resilience, knows a problem really well, and won't give up, and the fact that they won't give up makes them more and more educated and smarter about what they're trying to crack, is the highest opportunity cost, because you'll miss out on working with an amazing team that can become extremely successful. And then the additional opportunity cost with that is that when you work with amazing founders, you learn amazing pattern recognition of what works with good founders to make you stronger to find more investments. And if those founders see that your value add and friendly and super supportive, they'll introduce you to more founders along the way. I think that it's an important thing.

• 5:45Speaker 01

  My approach in investing is not to invest in the thesis or the hot industry that's now. It's my job as an investor is to find pattern recognition with amazing founders, and if I don't find that, then the opportunity cost is extremely high.

• 6:02David Weisburd?

  One of the top early-stage investors, arguably of all time, Niko Benatsis. He was at General Calis for 15 years.

• 6:10Speaker 01

  Love Niko, great guy.

• 6:11David Weisburd?

  He made the Midas list. He's found the exact same thing, which is, he did a study with his partner, Michael Verdict. They now spun out and run this fund called Verdict Capital. And they figured out that 50%, 5-0% of all value in every space was created before that space had a name.

• 6:29Speaker 01

  100%. I agree.

• 6:31David Weisburd?

  And... Kind of take a step back and you look at that 50%, okay, well, I'll focus on the other 50%. The problem is that that 50% comes in the first 18 months. The other 50% comes over the next two decades.

• 6:44Speaker 01

  Mm hmm.

• 6:45David Weisburd?

  So you have this rapid growth in returns and even more rapid growth in multiple, followed by what you could call the erosion of alpha. So maybe some nice returns for a couple of years, then some less nice. And then at some point, you're just at beta.

• 7:01Speaker 01

  I think it's a long game, 100%. And it's knowing how to get in early with amazing founders and then see that they are committed long term. And again, it's starting with how we started the conversation is that you want to find the teams that won't give up. And if they won't give up, then they'll catch those tailwinds that they need to catch. So for example, we're investors in a company called Webflow. And it's done extremely well for us. Along the way, I sold positions of it and it more than returned my first fund. And I remember meeting the founder and he started the company seven years before.

• 7:46Speaker 01

  He failed three times and on the fourth time, that was when I invested. And he saw something over the years that others didn't see, and he just kept going with it. The no code movement and people wanting to build and not rely on engineers. And so he's kept going and kept going. And then finally, when we invested, he started seeing tailwinds along the way that made him successful. So I couldn't agree more with that.

• 8:08David Weisburd?

  I think that's one of the most underrated founder archetypes. A founder that's obsessed with the same space.

• 8:14Speaker 01

  Right.

• 8:14David Weisburd?

  I invested in Better when Joey Levy and he's been in the gaming space for his whole career, which at this point is a decade or so. Scott Painter, who famously has raised over $10 billion in venture capital, has been in the car space. And just the earned secrets and the information and the network and the profound insights from the customer that you get by going after the same space over and over, even if the previous companies completely fail, is such an underrated thing.

• 8:44Speaker 01

  I couldn't agree more. That's exactly what I'm saying. We're not looking to invest in ideas and we're not looking to invest in technology. We're looking to invest in. Founders that are obsessed and extremely passionate about what they're doing and they won't give up. And will they be right all the time? No, that's not the reality of things. But they will keep trying and learning and trying and learning and keep progressing and not have the best idea off the bat. We don't look for an amazing solution. We don't look for an amazing idea. We look at founders that care enough about a problem that will keep reinventing good ideas to crack the problem they care about. And I have it. Our most successful founders have been working on companies for years and years and years and are still obsessed with it.

• 9:29Speaker 01

  I had Vlad Tenev from Robinhood over at my house for Shabbat dinner six months ago. And I just noticed him speaking with some of the other guests and I realized like why he's such an amazing founder. And because the answer is he's already working on Robinhood for 12 years and he was still showing to guests a new product feature that he's working on for Robinhood, that he's excited about, like he started the company yesterday. And that to me is the founders you want to invest in, the ones that are going to be passionate about it for over a decade.

• 10:05David Weisburd?

  You said something earlier, which was very subtle but powerful, which is one of the benefits that you get from investing into spaces that are non-consensus is they have a very specific type of founder. Double click on that. What's the difference between a founder in a non-consensus space and a consensus one?

• 10:23Speaker 01

  I would say courage because when someone is doing something that not everyone else is doing, it shows that they see something that others aren't seeing, but they're not afraid to do things that's not popular. And I think that that's a huge trait to have as founders that are disruptive or starting a new trend.

• 10:47David Weisburd?

  What's upstream of that? Is that just intrinsic love for the space? Is that a passion to solve the issue? Is it some intellectual fascination? Why do they behave differently?

• 10:57Speaker 01

  It's their actually care about the problem. So I'll give you an example. One of my first investments is a company called StudyEdge. And It's kind of how I realized that he was supposed to be investing in venture capital because it's a very relationship business. But he was friends of my older sister when we were growing up. I met him when I was 10 years old. And he was getting kicked out of schools because he was so smart and he would just get so bored in class and he would just distract the teacher. And then eventually wanted to go to, he got like 1600 SATs, he got like a 4.0 GPA. And then eventually like none of the Ivy League schools accepted him because he was,

• 11:41Speaker 01

  he had such bad behavior. So I ended up going to University of Florida. And again, he was so bored there. So he was just like, okay, I, these classes are so easy. I'm just going to teach other students. And he started tutoring students and making money. And then he was tutoring groups. And then he was tutoring auditoriums. And when I started, I always stayed in touch with him because I'm like, wow, this guy's so impressive and he's so smart and he's like, has his own business. And then when I started my VC fund, when I started Rainfall, he was the first call I made. I called him, I said, hey, I started a VC fund and I know you have this tutoring business. If you ever do something more scalable with it, please let me know. And it's like, funny enough, I am actually figuring out a way to make it more social

• 12:26Speaker 01

  and start an ed tech business. And I was like, wow, can I invest? And that was my first investment. Ended up doing really well. It was like a 14x investment. And why do I bring that up? Because today, we're also investing in his second company, CuriO XR. He had a successful exit and now he's doing VR headsets across the education sector in high schools and.

• 12:46David Weisburd?

  Certainly non-consensus.

• 12:48Speaker 01

  Definitely non-consensus. He's doing VR headsets to teach kids in high school, middle school, across the country, education in an actual digital way, right? And he's a founder that's already 20 plus years in education. And I know he's obsessed with it and he knows it inside and out. And he knows what the customers want, he knows what the districts want, he knows what the schools want. Is it sexy? No. Is it AI? No. But it's a founder that's amazing and passionate and knows the space inside and out. And that's what we want.

• 13:18David Weisburd?

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• 14:01David Weisburd?

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• 14:46David Weisburd?

  and more than 240,000 expert call transcripts, turning raw conversations into comparable, auditable insight. Take advantage of AlphaSense AI-led expert calls now. The first to see wins, the rest follow. Learn more at alpha-sense.com/HowIInvest. Weirdly, I think this relates to why some of the top investments of all time were...

• 15:11David Weisburd?

  Top VCs today, their angel portfolio, Marc Andreessen's angel portfolio, David Sacks's angel portfolio, just crazy returns. And the reason for that is they knew the founders before they were pitching. So if you think about passion or all these things that are normative in the space, founders, whether they're truly passionate about a space or not passionate at all and just purely mercenaries, they've learned the language to communicate passion. Up to a point that if you're intellectually honest, it's very difficult to differentiate.

• 15:40Speaker 01

  Right.

• 15:41David Weisburd?

  So when you find a founder, you actually were willing to invest in this founder pre-business. If you think about what does it mean to truly back a founder? They don't even have a company. They may not even have a concept, at least that you're aware of. And you're going to back that founder because of their passion.

• 15:54Speaker 01

  That's why AI investing today scares me because I don't have the time to get to know those founders and understand who they really are and why they're doing this and what their care and passion is and how long they'll do it. I have in my office, on our wall, I have our five values that we look for in founders. And it's humility, persistence, resilience, ambition, and vision. And I want to see that the founders that I invest in have those character traits. And if I have the luxury of getting to know them over time and then they fall on something

• 16:34Speaker 01

  that they're passionate about and they know the problem, then 10 times out of 10, I'll invest in them. I would be silly not to. And I've seen that those are the best investments that I've made. So the founder of Alma, for example, Harry Ritter. Alma is a mental health platform. I met him when I was thinking about investing in a certain company and I was just, someone overheard and said, you should speak to Harry Ritter. He works at Oscar Health. You should get to know him. So I went to speak to him. I told him about the business and just long story short, he said it's, he gave me his pros and cons on it. But then I said, listen, you're really impressive. If you ever start a company, please let me know. And then

• 17:17Speaker 01

  I made sure, I was so impressed by him, every couple of months to catch up, have lunch, coffee, something with him. And then I got to know him over two years. And then I saw what a thoughtful, humble individual he was. And then he said to me, I'm quitting Oscar and starting Alma Health. And I said to him, okay, I'm in. I gave him his first term sheet. And then we ended up investing. Thank God, it was a very successful investment. He just merged with Spring Health, which is another leader in the space. And together, I think they're going to be the new category.

• 17:44David Weisburd?

  I've seen these five traits on your wall.

• 17:47Speaker 01

  Yeah.

• 17:48David Weisburd?

  And one of those traits is hard to define. And we may have a disagreement on humility. What does it mean to look for a humble founder? Because you could argue the exact opposite. You want somebody with a chip on their shoulder, somebody slightly egotistical. What's the right trade off between ego and bullishness and self belief versus humility?

• 18:12Speaker 01

  Yeah, I think that all of us have ego. And I think ego is a very good thing if it's used in the right way. Having said that, I think that humility is very, very important for founders, because they pick up on insights instead of being stuck on their way or what they originally thought would be the right way. And they listen to the users and hear what they want. They listen to the industry and understand how it's moving and adapt and pivot in that nature. And I've seen the best founders have those humble traits and end up being much more

• 18:51Speaker 01

  successful. So Alma's a perfect example of it. When Harry originally pitched me on it, he said, this was at the time when WeWork was extremely successful. He basically said, I want to create a WeWork for therapists. And the reason is I see that therapists practice to be practitioners, but they don't practice to find office space, market themselves, and run a business.

• 19:15David Weisburd?

  They don't want to do the back office.

• 19:16Speaker 01

  Yeah, they don't want to do. So he said, I'll create a white glove solution. I'll market them and I'll get them customers and I'll create a beautiful home. So he raised $3 million. He built this midtown location that was absolutely beautiful. And it was going really well. And then after about a year and a half, it was snowing and one of his therapists said to him, "Hey, Harry, that video platform you created so we can speak to other therapists, can I use it to see one of my patients?" By the way, when we made this investment, therapy was still kind of taboo, wasn't a mainstream thing. So it was not the consensus investment at the time. And so anyway, this therapist said to Harry, "That video platform that we use to speak to other therapists, can I use it to speak to my patient today? It's snowing, I want to work from home." He's like, "Yeah, but I thought

• 20:01Speaker 01

  part of therapy was the patient leaves the door and goes to see his therapist."

• 20:06David Weisburd?

  The human touch.

• 20:07Speaker 01

  Yeah, the human touch. And he's like, that's, and the therapist said to him, "That's quickly changing and people don't really want that anymore." So he's like, "Hmm, okay." And then he asked a few other therapists and he felt the same. What did he do? He closed the four-wall business. And that was a crazy thing to do, but he realized where it was going. He was listening to his customers, right? Then what happened shortly after that is he got this call from an insurance provider, and he said, "We heard about you and we heard you have a network of therapists, and we have a problem offering our customers reimbursements for therapy because we don't have a trusted network of therapists that we could use. Can we do a partnership where we'll drive you customers and we'll do a rev share deal?"

• 20:51Speaker 01

  And he said, "So you'll bring my therapist's customers?" And they're like, "Yes." He's like, "Okay, let's do it." He spoke to his COO, he said, "Just had this call, let's speak to all the big insurance providers and see if they're experiencing the same problem." Sure enough, most of them were. And then he realized, "That's how I'm gonna bring business to my therapist." Then what happened? Covid. The whole world shut down. Everyone needed therapy. And all of a sudden, he can offer nationwide therapy across America. And if he would have been married to the beautiful four-wall business that he originally thought of, and used his ego to be like, "I'm the most smartest guy in the room", then he would have missed out and probably that business would have shut down.

• 21:36Speaker 01

  But instead, it became a nationwide business with over almost 30,000 therapists and doing extremely well. That's humility to me, listening.

• 21:43David Weisburd?

  I've been thinking about this paradox for many years because the opposite is also true. You want somebody that's so dogged that will ignore the wrong type of feedback when everybody is telling them, "Why are you..." Doing a mattress in your home and everybody's rejecting you. You want somebody that's going to continue pushing through that. And the best analogy that I have for this is a rose. You want to be like a rose. What does that mean? It lets sunlight in, it lets water in, but if somebody tries to go and pluck it, it has thorns.

• 22:12Speaker 01

  Right, right.

• 22:13David Weisburd?

  You want to know, and the distinction there is you want to differentiate between good feedback and bad feedback. A lot of times, people are not able to differentiate between what is good and what is bad feedback. And also, people don't differentiate between being weak-minded and being strong-minded. So you want strong-minded, you want to be able to persevere when things are tough. Some would call that ego, and other people would just say that's just doggedness and that's persistence. But one thing that I've learned from talking to hundreds of investors, founders, and business leaders is that planning for the future isn't just about growing assets, it's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply

• 22:55David Weisburd?

  thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Like a good neighbor, State Farm is there. One thing that I've learned from talking to hundreds of investors, founders, and business leaders is that planning for the future isn't just about growing assets, it's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking

• 23:39David Weisburd?

  more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Farm.com. Like a good neighbor, State Farm is there. One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college,

• 24:22David Weisburd?

  or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at StateFarm.com. Like a good neighbor, State Farm is there. Also, you want to be like a rose. You want to be taking the necessary sunlight and the water that's needed in order to bloom and prosper.

• 24:59Speaker 01

  Right, right. I think that you want to find a fair balance. And I think that fair balance needs to come with commitment and resilience. So not giving up and caring about something long enough. And the best founders will try things and some things will work, some things won't, but they'll live to see another day and keep going. Vlad from Robin Hood, he went through roller coasters. He was speaking in front of the Senate after the GameStop scandal. He was like one of the most hated figures all of a sudden in the financial industry. Everyone was trying to take him down. But he got through that, came out the other end, and now that company continues to skyrocket. But Vlad, what was interesting about him is I always noticed that anyone in the room with him,

• 25:43Speaker 01

  he would always ask questions. And some of that he would take to heart and some of it he wouldn't, but he's always asking and curious.

• 25:51David Weisburd?

  That's what Marc Andreessen noticed about Mark Zuckerberg early on. When he met him, he thought there was only one of two alternatives. One is just he was completely socially awkward. Or two was that he was completely like a sponge, getting information from anybody and learning massively quickly. It ended up being, as soon as he figured out it was the latter, he joined the board and he started investing into the company. But this ability to be a sponge of information and constantly get information from people and constantly learn from people is so valuable.

• 26:22Speaker 01

  Right. I couldn't agree more. Hundred percent.

• 26:24David Weisburd?

  Speaking of Robin Hood. You are clearly an early-stage investor.

• 26:29Speaker 01

  Mm-hmm.

• 26:31David Weisburd?

  And you invested in Robinhood at the Series B. Tell me that story.

• 26:34Speaker 01

  This is a perfect example of how a deal can come out of anywhere. And I actually, at the time, that was a $50 million fund. And people thought I was crazy when I made that investment. But a deal can come out of anywhere. Earlier, I said that, at the time, on-demand and the sharing economy was a big thing. So I was ordering something on Postmates to my house. And a bike messenger delivered it. And when he came into my apartment, I chatted with him briefly. And I realized he's a really smart kid. And I gave him my card. I said, "If you need help with anything, let me know." And he, he reached out to me, asked me for help with something. And he was a stranger. So I said, "Listen, I don't know. You come to my office, let's get acquainted, and I'll see if I can help you."

• 27:20Speaker 01

  And then I went, I had lunch with him. And I realized he was really, really smart. And he was an actor. And I asked him just kind of why he was an actor. He told me a story. In long story short, I asked him if he reads about tech companies. And he told me a few. And when I went back to my office, I looked up, looked up some of them. And they were really impressive. And then I took him out for dinner. And then I asked him why he's an actor and whatnot. And he said, "This is just, I was a child actor. My mom pretty much raised me that that's, I could be a good act." So I asked him why he was an actor. And he said, "I was a child actor. Since I'm a kid, it's what I know." And I said, "Would you be interested in working for me as an analyst?" And he's like, "Really? Why?" I'm like, "I think you're really bright. I think you should let go of the acting career and start looking for investments with me."

• 28:05Speaker 01

  And he jumped on the opportunity. A month later, he found Robinhood. He was reading different blogs. And then he showed it to me. And I thought it was interesting because it was a team that looked really impressive. And it took me about a month to get to them. And...

• 28:23Speaker 01

  Eventually I did, but I got to them when they pre-launched and they just finished the Series A conversations. I said to Vlad, "I really want to meet you. I'm gonna fly over to meet you." I was in New York, he was in Palo Alto. It was before the Zoom days, it was on phone. "I really want to meet you." And he's like, "You can come and meet me," but I, and he was always very humble and transparent. "I can't promise there's gonna be room, it's already spoken for." And I still flew the next day. I went, I met him in Beijing. I said, "If there's room, great. If not, I want to stay in touch with you guys and maybe invest in the next round." And he's like, "Look, you were the only one that flew out to meet us. There's no room in the round, but let's stay in touch." So for about a year and a half, I stayed in touch with him. Here and there, I shot him notes, anything I can be helpful with.

• 29:07Speaker 01

  I made some intros along the way. And then a year and a half later, he reaches out to me and he said, "Listen, you're the only one that stayed true to what you said and stayed in touch with us and offered help and made some intros along the way, and the one that flew to meet us. We're doing a Series B. There's one to five million dollars allocation. It's a three hundred million valuation. If you want, take anything you want." And I said, "Okay, great. I'm in for three million." And a lot thought that I'm crazy for doing that because I'm an early-stage fund and it's at a three hundred million valuation. And this was ten years ago, right? Back then, three hundred million was like three billion.

• 29:47David Weisburd?

  Three billion today, yeah.

• 29:48Speaker 01

  And I looked at it, and this is one of the privileges of how I started investing. I looked at it and said, "Okay, it's not a seed deal. I don't want to be invested only in seed. Why limit myself from working with an amazing team?" And I said, Vlad said to me something that really struck. He's like, "I want to be bigger than Schwab." At the time, Schwab was a fifty billion dollar market cap. And I did the math. I said, "If he's right, this could thirty to fifty X still from here. So why would I not invest in it? And then why would I not want to work with Vlad Tendev and learn how some of the best founders work?" And so I ended up doing it, and thank God it thirty-five Xed and returned more than that fund. I just want to premise by saying that generally, I look to invest in founders that don't need

• 30:33Speaker 01

  our help. If I'm investing in a founder that needs our help or needs other VCs help, then I think you're investing in the wrong team. And I'll never take credit for being too much value to a founder. They're the ones eating, breathing and sleeping this business. And at the end of the day, they're in the corner alone and trying to make this a success through the hard times and the good times.

• 30:57Speaker 01

  But I will say that over the years, we've provided a lot of resources to founders and introductions that we've built over time. And we offer them, if it's biz dev opportunities or potential hires or growth capital introductions, there we have. But I won't say it's make it or break it. What I will say, it's these touch points that show to founders that you care and you're willing to help. And a lot of VCs, I think shy away from if we can't help a lot, we're not going to help at all. And then they don't have good relationships with the founders. So I think the little bits of help go a long way because the founder sees this person cares. In the case of Robinhood though, after we invested, the big value add that we did help

• 31:40Speaker 01

  with was I have a longstanding relationship with DST Global. And I told DST, this is an amazing company. You should keep an eye on it. And then when they were raising their Series C, they were doing diligence and Vlad really wanted them to invest. And he said to me, I like them, they're not there on the price. And I said, what's the price you want to be at? He said, someone gave us a 1.3 billion valuation. And I said to Raul, I said, Raul, you have it at 1.3 and I know you guys really want this, so speak to Vlad. He's like, okay, I didn't realize that was the number. And then eventually they led the Series C and they led the Series D.

• 32:24Speaker 01

  So DST gave them a few hundred million dollars through our introduction. And then they did extremely well by that. And Vlad, to this day, remembers that I made that introduction for him.

• 32:35David Weisburd?

  Taking a step back, tell me about the story of how you started investing in 2013.

• 32:41Speaker 01

  Well, funny enough, I didn't realize, I think I actually started investing when I was 10 years old. But in 2013, I started my career, I was in the tech unit in the army in Israel. And then afterwards, I started a game startup with some friends of mine that ended up doing well.

• 32:56David Weisburd?

  Is that 8200?

• 32:57Speaker 01

  That was Mamram that worked together with 8200. And then I worked on a startup in the game sector that ended up doing well. And then I moved to New York and I was always networking. And I think that's one of the value drivers for founders, like someone that networks and always offers help. Just going back to the question before of value add for VCs, I end any email or anytime I reach out to founders, I'm like, how's everything going? Can I be helpful with anything? Always just networking and making introductions. That's my job as a VC. I was always building relationships with people. That's always been my lifestyle. And from time to time, family offices or investors would ask me for introductions. And then one investor, a family office out of Israel,

• 33:40Speaker 01

  asked me for two really hot companies to speak to in America that they couldn't get to. One was Kik Messenger, that was actually in Canada. The other was Foursquare. Both were really hot consumer companies. And so I've always learned, don't take no for an answer and help people if you can. And so I flipped the world around and got to both of them and made the introductions. And then they said to me, listen, you should do a VC fund. If so, we would invest. And so I asked them why. And they said, you have such a good network. You were a founder yourself. You enjoy meeting people. And it's no rocket science, this business. You just find people that are solving a problem and invest in them. So I said, yeah, okay, let's do it. And that's how it started. And then, why

• 34:23Speaker 01

  do I say I started when I was 10 years old? Because I remembered the founder of Studiage, Ethan Fieldman, and I called them and that was my first investment. So that's how I started. I never planned to be in VC. I never planned to be in finance. I just enjoy meeting founders and I jumped on the opportunity. And it took me many, many years to understand why I was very lucky. Because most VCs, when they start a VC fund, what do they have to do? They have to fundraise. In order to fundraise, they have to have a thesis and tell investors what they're going to go after. So for example, how many AI funds are there today?

• 35:06Speaker 01

  And so they have to be right twice. I only had to be right once because I had the luxury of investing in anything and just finding really good teams I got excited about. The other VCs had to be right about their thesis and they had to be right about the team. So my odds of being successful are way higher. So I wasn't planning to be a general investor. It didn't happen by design. It happened by learning along the way that the underlying success is not investing in trends or hot fields. It's investing in amazing teams.

• 35:42David Weisburd?

  In math, you call this a constraint problem. You put this constraint on what is hottest in the space, the thematic trend. That's the thing that you could raise capital on it, but now you're stuck in that constraint and you can't go outside the box.

• 35:55Speaker 01

  Right. And then what do you do? You have to reinvent yourself every time you want to find investors to do a new fund. And that, how do you do that? I want to get stronger and stronger on pattern recognition of really strong founders. And that comes with finding founders that have resilience, that are committed to a problem, that are humble, have persistent characteristics to them, have a vision and have ambitions.

• 36:19David Weisburd?

  As I've gotten to know you, I've learned that you're a great network builder. We were introduced by Bill Brown. You mentioned the story about how you helped this Israeli family office get into Kik and Foursquare. Talked about Vlad Tenev and connecting him to DST Global.

• 36:37David Weisburd?

  How often does, I guess, paying it forward and helping and being value-added work out? Because oftentimes, I think in finance, you'll have one of two philosophies that are rampant. One is this highly transactional, short-term thinking, which is dominant. And then you have what I would call bumper stickers. People say, "Well, go and help anyone because they'll always come back to you." Almost like something you would see in a bumper sticker or maybe a children's fairy tale book. Where's ground truth? What percentage of the time when you help people, does it come back to you? And maybe map out how that happens exactly.

• 37:13Speaker 01

  It's important not to sleep at the wheel, right? This is very much a relationship business. So long as the relationships continue and continue for a long time, then eventually you'll get into the company or work with those founders that you want to work with. So it's important to keep being persistent in helping a founder and showing that you bring value-add. And if for whatever reason you miss the A round, okay, then keep helping and invest in the B round, right? And what does that give you? It gives you, over time, of the founder seeing that you are not giving up and you believe in them and that you're a persistent person and that's the type of people they want in their corner, right?

• 37:58Speaker 01

  And on the flip side, I gain insights on who these founders are. Are they truly committed? And then eventually, I do the math of if to invest in the company because of that relationship I built over time. And I've seen that most times I end up investing in those companies, so long as I'm persistent about it. But you can't help a handful of times and then just go MIA and expect someone's going to give you a call and say, "Hey, remember a year ago you helped me with this? Now something's happened." You've got to be persistent about it. The underdog mentality. Keep going, keep fighting.

• 38:35David Weisburd?

  Alex Ramosi would say, do so much that it becomes unreasonable for you to be successful. In other words, create so much value that's unreasonable for someone not to let you in the round. Since we last chatted, you told me the story about how you got into Robin Hood Series B after staying in touch with Vlad after Series A, helping make introductions, etc. And I thought about it from Vlad's side, from the Robin Hood side. Is this rational? Is this reciprocity, which is human nature? You do something for me, I feel compelled to reciprocate. Or is this hyper rational? In other words, with a psychopath, which I'm not saying Vlad is, but just this generic psychopath that's getting a lot of value, is it in his or her interest to let you in the round? And I've actually come to the

• 39:19David Weisburd?

  understanding that it is very rational for that psychopath to let you in the round. And the reason for that is this. Whenever you have a hot company, you get somebody to price the round, so the price is fixed, and now you could fill it in with a bunch of investors. Just simplify and say you have two different types of investor. One that says, I'm going to do this, I'm going to be value added, I'm going to make all these introductions. Another that says the same thing, but has done that for the last 12 months. Behaviorally, what are the odds that the person that has done this for the last year is going to continue? Very high, over 80% probably. What are the odds that this

• 40:00David Weisburd?

  person that's promising you to do something? At best, 50%, probably 25%. It's hyper rational to actually go with the somebody that's exhibiting the behavior of value add to give that extra allocation.

• 40:14Speaker 01

  I think it's a good question. I think that, at the end of the day, when a really, really good founder that knows what they're doing and has conviction, when they raise a new round, they want to get it done with as quickly as possible.

• 40:32David Weisburd?

  Speed.

• 40:33Speaker 01

  Speed. And to have...

• 40:36Speaker 01

  Investors that will be supportive and not get in their way. And if they have those relationships, then they'll jump on that and do it quickly with them. And I think that's what I've seen the strongest traits with founders.

• 40:49David Weisburd?

  That's such a good point. So the friction is lower. So fewer are already on the cap table, giving you another five, 10 million. It's much less friction than somebody that says, I'm very interested. And then they take you through this two month.

• 40:59Speaker 01

  A hundred percent. Great founders aren't focused on fundraising. They're focusing on building businesses and making money. Right?

• 41:08David Weisburd?

  Fundraising is not the thing.

• 41:09Speaker 01

  No.

• 41:10David Weisburd?

  Ron, a lot of people don't know this about you. You came from very humble roots. You grew up in an immigrant family from Orlando, Florida. You've done these phenomenal things in your life and your career.

• 41:21Speaker 01

  I've done.

• 41:23David Weisburd?

  If you go back, growing up as a children of immigrants from humble roots, and you could give yourself one piece of timeless advice, what would that be?

• 41:30Speaker 01

  Nobody knows anything. Do what's good for you with your own conviction and follow your own path.

• 41:38David Weisburd?

  It's oftentimes the people that work with presidents, that work with billionaires, decade billionaires, they say the same thing, which is, it's idiots all the way up.

• 41:49Speaker 01

  Something that I heard, and to touch on VC and investing, something that I heard that really hit me is Mark Randolph, the founder of Netflix. He's got a lot of wisdom. And he said that he's worked on seven companies over his career. Some worked, some didn't. He never knew if any of the companies were really going to be successful. And he especially didn't know that Netflix would be what it is today. And he said something that you don't hear a lot of very successful people say, talk about humility. He said that if I, the founder of Netflix, didn't know it was going to be successful, and certainly didn't know how successful it would be, it means that nobody knows anything.

• 42:34Speaker 01

  Right? And when I heard that, it gave me such a relief. It meant that just do your thing, just every day, try, learn, trust yourself. Some things won't work out, some things will, and just keep going and you'll grow and progress and have success.

• 42:51David Weisburd?

  Ron, this has been an absolute masterclass. Thanks so much for jumping on.

• 42:56Speaker 01

  Thank you. Really a pleasure.