Elizabeth Zalman & Jerry Neumann - Founder vs Investor - [Invest Like the Best, EP.351]

My guests this week are Elizabeth Zalman and Jerry Neumann. Jerry has been on this show two times before. He’s an early-stage Venture Capitalist, an adjunct professor of entrepreneurship, and an excellent writer. Liz is a two-time founder, most recently co-founding StrongDM, in which Jerry was a seed investor. Together, they have written a somewhat contentious book called "Founder vs Investor" that lays bare the relationship at the core of most new businesses. They take specific moments in a start-up’s life up to IPO and share their experiences on the friction that inevitably appears. In our conversation, we discuss the strong reaction to the book, the incentive problem at the root of the relationship, and explore best practices for other founders and VCs to follow. Please enjoy my conversation with Jerry Neumann and Liz Zalman. Listen to Founders Podcast For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes: (00:04:02) - (first question) - The controversy surrounding Founder vs Investor: The Honest Truth About Venture Capital from Startup to IPO (00:07:53) - Considering the idea of firing founders (00:10:44) - Navigating morally grey areas for founders and investors (00:11:57) - Understanding the role of the board and their power (00:15:05) - A PSA for founders (00:17:48) - Identifying where incentives are most broken (00:22:28) - Viewing founder friendliness as a temporary status (00:25:41) - Offering good advice during the fundraising process (00:32:41) - Ensuring delivery on promises as an investor (00:37:04) - Strategies for a long-term relationship between a founder and investor (00:41:44) - Structuring the ideal board meeting tactically (00:48:13) - Determining which investing terms matter most (00:51:18) - Managing the dynamic between a founder and an investor during company growth (00:56:44) - Establishing a sustainable, differentiated position (00:59:08) - Defining the distinction between a founder and an investor (01:00:18) - Reflecting on lessons from exiting a business (01:03:52) - Exploring the VC-to-VC relationship (01:08:01) - Plans following their book release (01:11:34) - The kindest thing anyone has ever done for Elizabeth

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

• 0:00Patrick O'Shaughnessy?

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• 0:35Patrick O'Shaughnessy?

  Hello and welcome, everyone. I'm Patrick O'Neal and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

• 1:00Speaker 01

  Patrick O'Neal is the CEO and founding partner of Positive Sum and the CEO of O'Neal Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum or O'Neal Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum or O'Neal Asset Management may maintain positions in the securities discussed in this podcast.

• 1:32Patrick O'Shaughnessy?

  My guests this week are Liz Zalman and Jerry Neumann. Jerry has been on the show two times before. He's an early-stage venture capitalist and adjunct professor of entrepreneurship and an amazing writer. Liz is a two-time founder, most recently co-founding Strong DM, which Jerry was a seed investor in. Together, they've written a book called Founder Versus Investor that lays bare the relationship at the core of most new businesses. They take specific moments in a startup's life up to its IPO and share their experiences on the friction that inevitably appears between founders and investors. In our conversation, we discuss the strong reaction to the book, the incentive problem at the root of the relationship and explore best practices for other founders and VCs to follow. Now, please enjoy my conversation with Jerry Neumann and Liz Zalman.

• 2:20Patrick O'Shaughnessy?

  So I just hit record because we were having a conversation around the book itself. Maybe someone can read the quote on the back.

• 2:26Speaker 02

  It says, "Super problematic, over the top venture capitalist, name withheld."

• 2:31Patrick O'Shaughnessy?

  Name withheld. So what's the story behind him saying that? To me, this seems just like a great, interesting book that's an actual perspective from an actual founder and an actual investor about how the interaction between these two classes of people work. And that's interesting and it's valuable for people to know how it works. And it seems to have ignited a response that's different than that.

• 2:52Speaker 03

  So I'm a venture capitalist and I have been for a long time. I read Liz's sections and some of them make me uncomfortable. Just as a venture capitalist, I don't see myself in what she writes. I don't see myself the same way that she sees me, or at least sees venture capitalists as a class. But this was part of what we wanted to do with the book, right? I actually insisted that if we were going to write a book together, that we not agree, that we don't come to some consensus. Every book's like that, right? Like, oh, here's one side, here's the other side. Let's find a place where we can all agree. And you read these venture capital books and it's not true. Because that's not what happens in the company. People aren't always agreeing. So the point was, we write the book and we each tell our sides as convincingly as possible so that people can see what each side says. And then when they read it, they can say, okay, I'm talking about venture capitalists and this is what they're thinking.

• 3:37Speaker 03

  They're thinking what I'm thinking, what I write in the book. And if you were a venture capitalist, you can say, well, I'm talking to these entrepreneurs and they say one thing, but what are they really thinking? And they can read Liz's section and say, oh, this is what they're thinking. And I think it's true. But when I showed the book when we were writing it and we had a bunch of people, including you, take a read of it beforehand, just to give us feedback and tell us how it was gelling. The people who were venture capitalists were very negative on it. They didn't agree with what Liz said. They didn't think it was true. And they thought that saying it was harmful to the ecosystem. So we were looking for somebody to write the foreword and I said, yeah, we should have Sandy Lerner write it. Right? The founder of an amazing company she founded, Cisco, with her husband and was then fired by her board

• 4:18Speaker 03

  a year before they went public, which always surprised me because if they were that close to going public, she couldn't have been doing that bad a job, right? And Sandy is a great writer. She sent in this forward. It's really well-written, really powerful, and was like somebody kicking me in the head because it's so anti-VC. So I said, look, you know, I think in the spirit of the book, we should have a second forward written by somebody who believes in venture capital as an institution, as a way to go forward and build progress. So Liz is like, okay, fine. So I went and asked a bunch of investors that I know, some who I knew pretty well, or know pretty well, people I've worked with, who I like. And to a person, they said, no, they wouldn't do it. They didn't want to be associated with the book. And one of them emailed me back and said, look, I didn't

• 5:03Speaker 03

  like the initial post that you wrote that this was based on. And I think that, you know, you've moderated your opinion in your half, but I think Liz's side is completely wrong. It's off-base. It's over the top. I think that you should not publish the book. I think you should disassociate yourself from what she's written because it's just wrong and bad. I was a little surprised because he's actually a great investor. He's a friend. I've sat on boards with him and he's really helpful to founders and super reasonable. So I asked a couple of my founder friends. I'm like, look, name withheld, but this is what was said. And one of them said, yeah, spoken like a guy who can't be fired.

• 5:34Patrick O'Shaughnessy?

  What's your feeling about this piece of this, this reaction from the investor community that you went over the top?

• 5:41Speaker 02

  I think it's the same old. I think it tends to be zero acknowledgement of the founder experience. In times of good and in times of strife, nobody really seems to acknowledge it, which is why the post that Jerry wrote about boards of directors firing founders was so impactful because here was a VC actually saying that, yo, these things happen. And the beautiful part about the post was that it actually wasn't pro-founder and it wasn't pro-investor. It was just, these things happen. And so that reaction, it was unsurprising to me. I don't know if I told you this, Jerry, but I was actually worried that you were going to pull out of doing the book when that came back. And you told me that story. I was nervous.

• 6:18Speaker 03

  We'd already gotten the first part of our advance, so then I'd spent it.

• 6:23Speaker 03

  I think it's important to know what are the entrepreneurs actually thinking that they're not saying to you? And here's actually an honest account of that, of what Liz was thinking. I mean, right or wrong, and I disagree with a lot of what she says, but it's still what she felt, right? So I need to know that as an investor.

• 6:37Patrick O'Shaughnessy?

  Just to go the other direction, was there anything that he wrote that made you uncomfortable?

• 6:42Speaker 02

  There was maybe one thing, which is this idea about firing founders. I think Jerry is pro founders staying involved in companies until the end. I think he's seen many companies destroyed because founders got fired by their board. But it was pretty zero bullshit. He's like, under these circumstances, because he lays out a whole bunch of scenarios about this founder's not hiring people, or this founder is not managing their company properly, this founder doesn't actually want to push product out. And it was pretty cut and dry in terms of people staying on or not staying on. But that is also the job, as somebody financing companies, right? This thing is growing or this thing is not growing. It's very much zero or one.

• 7:17Speaker 03

  I think if we were to do a second edition, if somebody said to me after one of our events, it said, there's a lot of complaining about venture capitalists, but, and this was a venture capitalist saying this, but nobody ever complains about the founders. And founders have just as much bad behavior as venture capitalists do. And I think this is true. And I think maybe I've been in the business too long, because I could have been a little more sharp tongued about things that founders do that are wrong, such as, okay, we're just going to screw the investors. We're going to take the money and walk away. We're not going to pay out the preferred. I've been in deals where the founder has negotiated with an acquirer to get half the money, even though they weren't paying back the preference. Both sides can do things that are wrong, right? I mean, I've known founders to lie during due diligence, I mean, just flat out lie

• 8:01Speaker 03

  about revenue, about how many people they hired or have on staff, things that are hard to verify without a ton of work, especially at the early stage. There's plenty of bad behavior to go around. Venture capitalists usually don't talk about it because it feels partly like punching down, but partly because if they don't catch it, it's probably their fault. They take ownership of the problems they miss, but it still happens.

• 8:20Speaker 02

  I live some of those stories. There was a situation that I was in, in my last company, where there are three co-founders, and this acquirer came in with a nice offer. It was, I don't know, 40, 50 million or something. And it was going to go pay out the preferred, and the rest was going to go to the founders. And two of us didn't want it, and one of us wanted it. And it was like a fight to the death about whether or not we take that deal or not. And it was us essentially debating, do we want to screw our investors now, have life-changing money, and then maybe never raise again?

• 8:46Patrick O'Shaughnessy?

  Screw in what sense?

• 8:49Speaker 02

  Well, these people have put in money, I think it was four years into the company. They were pre-seed and seed investors. So we're going to cash them out. Great, they get their money back. And the founders make 40 million and the investors make 10. Didn't seem like a morally good thing to do. And yet, there we were talking about it and one of us wanted to take the deal. Because they didn't care about getting a job again. They just cared about fuck you money so that they didn't need to work again.

• 9:11Patrick O'Shaughnessy?

  Beyond obviously bad things, lying, fraud, lying, just being like a bad person, where is the zone that you think there's the most conflict? Is it around this control of the business? Is it a bill of goods that feels from the founder's side like you were sold a bill of goods and in reality is something different? As we leave the absolute black and white stuff and get more into gray, what comes to mind?

• 9:34Speaker 02

  For me, it's something I didn't know at the beginning of my career and I fully understand it now, which is that a company starts by me having an idea with a few other people and birthing the idea and then growing it into a thing. And at some point, I need to transition from being a founder into being an operator and a manager. And they're two fundamentally different things. And nobody ever told me that that is the thing that you're going to need to do. You're going to need to enjoy people management. You're going to need to learn how to play politics at the highest level. You're going to need to learn to have nuanced conversations of control with rich egomaniacs. And I didn't know that that's what I was signing up for at the beginning of my career. And VCs come outstretched, we can help you do this, we can help you do that. The fact of the matter is, in my opinion, I don't think that they can.

• 10:18Speaker 02

  My experience has been that they can't and that they've never seemed particularly invested in me succeeding. They're invested in the company succeeding, but not necessarily me. I can be cast aside, similar to the Sandy Lerner story. So my goal in writing the book was actually to sort of eliminate whatever naivety was possible so that a founder maybe understood that in 10 years, they as a human being and as a business person are going to have to look fundamentally different than they do now. And do they want to sign up for that journey?

• 10:47Patrick O'Shaughnessy?

  Do you think now, with the benefit of your experience, that the simple trope about the role of the board of directors in its most basic element is to hire and fire the CEO and pay the CEO? That is the principal governance job of a board? And everything else we can talk about too, but I hear a lot of people say that's the reason that this thing exists, those two key functions.

• 11:11Speaker 03

  I think that's true, but because that's the only thing they can do. So I've been on boards where the board has to approve the budget for the following year, right? Every board has to do that. I've been on boards where you approve the budget and then the CEO doesn't stick to the budget. And then what do you do? Do you sue him? I mean, you know.

• 11:28Patrick O'Shaughnessy?

  There's no recourse.

• 11:29Speaker 03

  Yeah, the only recourse is to fire him or to lower his pay or her pay, and that's it. So even though that's not the only thing you do on a board, in the end, that's the only remedy you have.

• 11:38Patrick O'Shaughnessy?

  Do you think that that's right? Is that solid foundation from which we can then proceed?

• 11:42Speaker 02

  Yes, is that that's the only thing that I believe they can legitimately do and actually do do? Yes.

• 11:47Patrick O'Shaughnessy?

  Is the problem then something to the effect of many investors hold themselves out as doing more than that in a productive way for the business? The classic, how can I be helpful?

• 11:58Speaker 02

  There's the investor and then there's the board director, right? And those, I think, are two different roles that often frequently get commingled and conflated, especially in early-stage startups, right? There's the investor coming arm outstretched, saying, it's early, I'm gonna help you. I've got these people and this people and these introductions I can make. And then they sit on this board of directors and these meetings are ostensibly to governance of the company, right? But is it ever really that in a meeting? Not in my experience.

• 12:25Speaker 03

  Flip side is now I said that the job of the board is to fire the CEO. But in truth, so when I sit on boards, it's usually really early stage, right? So from founding until they raise their series A or B. I can't fire the founder. I mean, never have board control, but I couldn't fire the founder even if I wanted to because nobody's gonna take that job. I can't hire somebody to run this company that needs to... My job isn't to do that. My job is to train them to run real board meetings, to try to push them in the right direction, to remind them of what they need to do, that they know they need to do to get the company off the ground. I mean, I have to be there to support them. That's all I can do. Whether I do a great job at that is certainly open to question, but it is what I try to do. Is, all right, look, you need to do this if you want the company to succeed, right? And they're like, oh, yeah, right, I need to do that and stop doing the stuff I'm doing today and go and find some customers.

• 13:10Speaker 03

  I don't consider myself an expert at that, but I think as an outside voice, somebody who's saying, don't forget that you need to go make some money, people need that reminder.

• 13:17Speaker 02

  As an investor, Jerry has always been more useful to me as that outside voice. And he said things. I remember I was raising my last Series A and he sat me and my co-founder down and did an exercise in the whiteboard about what revenue targets we need to hit and work backwards. And we were 18 months behind in hiring salespeople, something insane like that. And not a single human that sat on my board that was a majority stakeholder had ever walked me through that exercise, which goes back to the question of what am I now? I'm not a founder, I'm running a business.

• 13:45Patrick O'Shaughnessy?

  If you had PSA ability to just every time a founder was talking to an investor, automatically this just got put in front of their face, what would be on the PSA?

• 13:56Speaker 02

  Oh, my God, it would be talk to me like a fucking human being. Stop it with the whitewashing of words and just actually say what's on your mind. Don't gently suggest something. Because I now, I'll sit in a board meeting as an observer and I'll watch a young founder being spoken to by a pretty seasoned investor. And the founder will come on the meeting and they'll call me, like, that went great. And I'm like, dude, you've got six months and you're going to be fired. And you don't see it because the language is so nuanced and it's so delightfully vague, as opposed to the VC actually saying, here's what I think.

• 14:26Speaker 03

  I think if you ask a VC how good other VCs are, they'll say, well, 90% of VCs are idiots. They'll all say this.

• 14:33Patrick O'Shaughnessy?

  It's like everyone being an above-average driver.

• 14:35Speaker 03

  Right. Everybody's a below-average VC, except for them. And it's interesting, right? Because VC, there's usually no training. The people who are successful often just pop into it and become successful, never having done it before. There might be no right way to do it. Right? It's an interesting thing. Why are the most successful VC firms often the ones that came out of nowhere? Union Square Ventures, the two founders had had previous jobs at VC firms, but they weren't that successful. And they started a fund and they became one of the most successful funds on earth. IA Ventures, same thing. They weren't venture capitalists and all of a sudden they were one of the most successful funds ever. So maybe experience is not what you need. It's unfortunate that the people who are successful are often the ones who don't know how to manage companies. I'm not saying either of those firms is how to manage companies because I like them both. But people come in and are successful financially without knowing how to manage the companies they're

• 15:20Speaker 03

  investing in. And there's no motivation to be people who are good managers. I don't think that's what LPs look for in investors.

• 15:27Patrick O'Shaughnessy?

  If you think about the thing when you read it that made you the most uncomfortable about what she wrote, what comes to mind?

• 15:33Speaker 03

  So I've invested in two of Liz's companies, both of them from the very beginning, or very close to the beginning in the first one, and then at the very beginning in the second one. And I think we've had a good relationship. We're friends. It's been, I don't know, 12 years now, or whatever. I found some of the comments, if applied to myself, hurtful. She's only had, I don't know, 10, 15 VCs in her life in the company, so I'm one of them. So it's like, okay, well, am I doing these things? Is this a fair comment about how I've advised her? Here's one that I think we actually had an argument about while we were writing the book. She said, oh, VCs never give you this advice. And I called her up and said, I gave you this exact fucking advice. She's like, you did not. I'm like, I did, I did. And I reminded her of the exact situation we were in and what I had said. And she's like, oh, was that you?

• 16:16Patrick O'Shaughnessy?

  What was the advice?

• 16:17Speaker 03

  That was the whiteboarding exercise. She's like, nobody ever told me I'd have to hire more salespeople this fast. I'm like, swear to God, I have pictures of a fucking whiteboard.

• 16:26Patrick O'Shaughnessy?

  Like so much in life, incentives are so powerful. And I would love to hear from you both on where you think the system of incentives in the system of this style of investing are most broken.

• 16:38Speaker 02

  For me, in the most romantic version from a founder perspective, I start a company because I have a desire to birth this idea into the world and turn it into a big thing. Maybe it's ego, maybe it's pride, or maybe it's just this thing should exist and it's goodwill to the human race, whatever. I genuinely want to do this thing. And then the investor comes in, and investor's job is to return capital and more to their investors. And those two things, one is hyper pragmatic and one is truly romantic at its heart. They come in and they conflict. And I wish there were... And Jerry will say, I want a founder who wants to build a billion dollar business because I only want these outsized returns, which is his right as an investor and the type of investment that he does. Every founder will say to Jerry, oh, I want to build a billion dollar business. It's come out of my mouth. It's a flat out lie, I think, a lot of the time.

• 17:23Speaker 02

  I want to say whatever I can say in order to get money to finish that transaction. And I wish there were more of a frank conversation about the things that both sides wanted. So it was maybe slightly more unromantic on the founder's side.

• 17:37Speaker 03

  It's a weird business, right? I think every financial intermediary is judged on how much money they make, right? You look at the Midas list, it's not a list of the people who've built the most successful companies, it's a list of who's made the most money. Some of them have made money to the detriment of the public markets, or whatever, but that doesn't count, right? I mean, for me, I think I'm most proud of the fact that I've had nine companies I've invested in have gone public, right? These are real companies that these people built something and I was part of that, they created thousands of great jobs. And, I mean, if all you care about is making money, it's a weird business to go into, venture capital, because it's not the easiest way to make money. I mean, you look at the Forbes 400.

• 18:12Patrick O'Shaughnessy?

  Lot of real estate guys on there.

• 18:14Speaker 03

  Yeah, a lot of hedge fund guys. I mean, how many venture capitalists are on the Forbes 400? I mean, I think maybe the past five years, there's been a few, but before that, there was maybe one, maybe two. And those couple were either John Doerr, or they made their money by being a founder first and then becoming a venture capitalist. So, the fact that so many people go into it to make money, and that's what they want to do, it's odd to me. And all they care about is making money. And I think there are a lot of venture capitalists like that, but if you don't care about building businesses, it just seems like the wrong job to take.

• 18:41Patrick O'Shaughnessy?

  So, if 90% of them are idiots, and you both met presumably some of the 10%, what do those 10% do? Why are they not idiots, or why are they good?

• 18:50Speaker 02

  There's a conversation in the book in which I sit with a founder who passed on my Series A and then invested in a competitor for Series B. I'm actually gonna name him, because he said I could. So, Ethan Kurzweil at Bessemer. And I saw the press release of him investing in the Series C of my competitor, and I emailed him, I think it was something like, "What the fuck?" And he wrote back, by the way, you asked earlier today, "Who do I get along with?", he's one of them. And he said, "I'm really sorry, I wasn't sure if I should tell you, you're no longer at the company." And we went to the bar and we had it out, over a drink, and then we parted as friends. That, to me, is what I look for in the 10%, which is actually a frank conversation of, "Straight shooting, I don't feel good, you did this thing, can we talk about it?", which happens in most relationships, I would think, in my life, but just not in the business ones.

• 19:35Speaker 03

  See, it's funny because Liz and I disagree about this. She thinks that being frank and honest is the highest virtue and I don't. I don't think that always being honest with the people you're in some sort of relationship with, business or otherwise, is the best strategy. That sometimes you need to sugarcoat it a bit, that you need to help them get to where you are, and just being completely frank doesn't do that for everybody. I think the best venture capitalists that I've worked with are the ones who care about the company, care about building the company, and can give the right advice to get the company to do the things they need to do to build the company. Not just about making the most money, but about actually building a business. But even there, they're not there to make the founder successful, right? They're not saying like, here's the advice that will make you, the founder, successful. It's here's the advice that'll make your company successful.

• 20:18Speaker 03

  And I think that's probably the point of divergence for most people is that the founder is like, well, this person gave me money and they want me to be successful. And then they find out that, no, that's not what happened. VC gave the company money and they want the company to be successful. And if you're along for the ride as founder, great. But if you're not, I mean, that's fine, too.

• 20:35Patrick O'Shaughnessy?

  I have this theory of founder friendliness where there's sort of two ways to value a company. And there's the way of thinking about it as an option, and there's a way of thinking like discounted cash flows. It's a thing, I can sort of have a sense of what it's going to be in the future, I can build some valuation model for it. And that founder friendliness all happens in the option value phase of a company. And that once it either graduates in the right direction, now it's Uber, then you're no longer founder friendly because you need Uber to work because it's going to return your fund. Or on the other direction, if you graduate and it's like, okay, this one's not going to work, then you are no longer founder friendly either because you just want your time back. That seems to be the experience. Do you agree with that? Do you think that that is, this notion of founder friendliness is really just constrained to a period when the thing might work, but it hasn't yet?

• 21:18Speaker 03

  I think every person I've backed would say I'm the most founder friendly VC they've worked with. And yet I refuse to say that about myself because I think it's intellectually dishonest. I need the founder to succeed if the company is going to succeed. But in the end, I also have a personal investment in the founders I back because I back people, not ideas. So you get this attachment, but I know that that's an irrational thing for me to do, to be attached to the person, not the company, because that's not the job. I think it's intellectually dishonest to say you're founder friendly and tout that as some sort of plus for the founder. I don't think that's the job.

• 21:50Speaker 02

  I couldn't agree with you more. To Jerry's point earlier, right? He can't fire the founder at the earliest stage because then there's no company. So you sort of ride the founder until there's something there where you can see how it could be monetized and grow with some crazy growth curve. And then you can just put in the operational team to go and get that done. At that point, you don't need the founder anymore. Although, from a branding perspective, I would say founder adds intangibles and all that stuff.

• 22:12Speaker 03

  Yeah, I mean, founders are often the best salesperson. They're usually the person who has the vision. They're going to push the company more than any other. One thing I wish I had said more strongly in the book was that, to me, it's crazy that founders think they're the show, that the people are giving money to the company and yet somehow they're not the pop star, right? Like, the act goes on without them.

• 22:29Speaker 02

  But that goes back to the point that I made earlier, which is that nobody tells the founder at a certain point, "You need to change. You need to mutate into something else." And it is essentially getting over yourself and getting over your ego and realizing that this thing exists outside of you at this point.

• 22:43Speaker 03

  Yeah, I agree with that. I mean, I actually changed from a doer to a manager when I worked for a big company, and nobody told me that there either. The difference being that they gave me the time and space to actually make that transition myself, but somebody actually told me, "You need to stop working and start managing because people who work for you need somebody to manage them." I had no idea what that meant. And I think it is true that there's not enough education to people who are growing companies to let them grow also.

• 23:08Patrick O'Shaughnessy?

  Do you think, though, that it's a feature of a market system that nobody's really owed anything? When you become the manager at whatever company that was, you weren't owed that. Stuff gets sorted out because those that figure out that this is the case are probably more apt to be a good manager. They figured it out, and they evolved and adapted.

• 23:25Speaker 03

  I guess I'm more of a humanist than a market system would imply. I mean, owed or not, I think it's... I would prefer to help somebody continue running their company through IPO, just because I think it's good for them. Part of the reason I do the job, and I think part of the reason most VCs do the job, is because they want to see these things succeed. It's not just to see ideas succeed, but to see people succeed. And nothing makes me happier than to see people I've backed succeed personally. It's just a great perk of the job. I mean, it has nothing to do with me making money. I mean, correlated, but it's not causation, right? They succeed, I make money, they make money, but that person succeeding that I backed is just... Awesome.

• 24:00Patrick O'Shaughnessy?

  I'd love to talk about fundraising. It's where the two sides, every so often, really come together in this kabuki dance process. And the way I'd love to structure the conversation is advice from the investor to the class of founders and from the founders to a class of investors. If you had a captive, curious audience of every VC in the world or something in some stadium somewhere, and you could say, listen, I'm going to tell you something that's good for you to hear from the founder perspective, vis a vis the fundraising process, what would you tell them?

• 24:31Speaker 02

  I would ask them to spend as much time as possible trying to perceive what it is that I'm actually building. Don't start asking me questions about market size, or who I'm going to hire, or what this feature does, but actually get to the core of the thing that I'm doing with elementary ABC questions. Because I think without that, founders get so frustrated in fundraising because they get this crazy whirlwind of questions. They go down these diligence rabbit holes. But I think most of those are just masking the fact that investors don't actually understand what the founder's building. Because, especially at the pre-seed and seed stages, most founders have zero idea how to communicate what they're building. And so that's where things blow up.

• 25:10Patrick O'Shaughnessy?

  So just more zooming in on present reality.

• 25:13Speaker 02

  Present reality, just ask a series of questions. Even if you spend the first half hour of that call just trying to get to the kernel of what is this thing? Right? So that I could go and call my father, a teacher, and explain it to him, that would be beautiful.

• 25:27Speaker 03

  I can't agree with that. I think I can't disagree more strenuously. It doesn't matter what you're building today. In terms of investment, your product today is just not what you're going to look like five years from now, when I might actually get liquidity, or 10 years from now. All I care about is what you are trying to build 10 years from now. Right? So that's why I ask questions about market size, or hiring, or who works there, right? Because whatever product you have today is going to change. I mean, it's nice to know that you can build it, but I just don't think knowing what your product is today makes any difference to me investing. Now, if it makes you feel better for me to pretend that I care, that's fine, and I'll do that. But why? Why would I care about the details of your product?

• 26:05Speaker 02

  You should be able to articulate in a sentence what it is the thing that I am building.

• 26:10Speaker 03

  Why?

• 26:11Speaker 02

  Because how else are you going to decide if you want to invest in it?

• 26:14Speaker 03

  I want to decide when I'm going to exit. I'm not deciding on what I'm investing today. I'm deciding on what I'm investing in 10 years from now.

• 26:20Speaker 02

  Sure, but you should be able to say what that thing is. And you should ask me about market size, and you should ask me about hiring plans and all that stuff.

• 26:27Speaker 03

  The question I always ask is, what do you want this company to look like in five years? Because that's what I care about.

• 26:32Speaker 02

  But you should also want to know what you're investing in.

• 26:35Speaker 03

  I'm investing in you. Right? I'm not investing in your product.

• 26:39Speaker 02

  Fair enough. I'm going to press rewind and replay on this conversation when I raise my next company. Sorry, Jerry, you don't get to know what it is, you just get to know about the market size.

• 26:48Patrick O'Shaughnessy?

  You said you invest in people, not ideas. So what does that process look like?

• 26:53Speaker 03

  Venture capitalists, people, product, markets, right? Those are the three things that venture capitalists invest in. I've asked a bunch of people which one you invest in, and the best answer I got was Andy Weisman from USV, who said, why would I have to choose? That's sort of been my north star. I do invest in ideas, but I don't invest in the product today. Because the product today, I mean, when you showed me the product for this company the first time, you're like, okay, just open a Docker container, bring up the command line, and then dump your biggest dataset in. And I'm like, I don't have a big dataset. Obviously, it wasn't my biggest dataset. And it's not the product you sold, right? In the end, that's not what you brought to your customers. It was a seed of an idea, and I understood what you were trying to do, the driving motivation behind it. But I didn't need to actually use the product. At the very earliest stages, so when Liz was starting her second company, we had a series of breakfasts.

• 27:38Speaker 03

  Every few weeks, we'd go to breakfast, and she would run about 30 ideas by me, and I'd tell her they were all stupid. Actually, I didn't say that. I said it nicely. They were ideas that perhaps you didn't know enough about the market, or that I'd heard before, I have sources of information you don't have, right? So I could help you, and I think you would probably winnow the list before you came to me. But then she came with the idea, and I loved the idea, right? And, of course, in the end, I had those breakfasts every few weeks because I knew that she would eventually come up with a good idea. But it wasn't like she told me an idea which I didn't like or didn't think would work, and I said, that's it, and I'm never talking to you again. So, of course, you invest in people. But you have to wait till they have the right idea. So I don't think it's a one or the other. I mean, I knew Liz would come up with a great idea, and I know she'll come up with one in the future.

• 28:16Patrick O'Shaughnessy?

  Why? Why did you know that?

• 28:17Speaker 03

  I don't believe in raw talent, or I do believe in it, but I don't think it's that useful in this regard. I think it's raw drive. I knew that she needed to come up with a good idea just because of who she is, right? She needed to start a company and have it be successful. So I knew that she would not rest until she found that idea.

• 28:33Patrick O'Shaughnessy?

  Do you think that the drive to win is the most important thing? In terms of what you're looking for in a person?

• 28:38Speaker 03

  It's one of the most important things. Drive to win is super important. The problem is if drive to win is too strong or if there's no countervailing force to make you do reasonable things, then it can be destructive. So there's a tight rope you have to walk.

• 28:49Patrick O'Shaughnessy?

  What do you think about, from your own perspective, in yourself? Do you think drive to win is the thing? If you're building some attribution of why something worked, is it drive to win?

• 28:57Speaker 02

  I think you have to hustle until you fall over. It's not taking no for an answer. If somebody tells you something's impossible, the answer is that's great and you move on to the next person. It's just knowing that when I wake up in the morning that I can do whatever it is that I need to do that day. So maybe it's unbridled confidence, even if I'm not a self-confident person, which is not the case, just knowing that I can enact anything that I want to.

• 29:21Speaker 03

  I think with Liz is the drive to win, but there's also, there's a couple of stories in the book. One, where we were doing a follow-on round and the contract came in. I read the contract. I said, look, there's some terms in here that we didn't agree on, that we in fact agreed we would do something differently. And I called Liz to say so, and she wasn't available. So I called the lawyer and he's like, well, that's just the way it is. I got super angry. I got super angry because I was like, wow, I did not expect Liz to screw me. That was totally, must have completely misread her. I can't believe this is happening. You know, a part of what I was looking for was somebody who was a team player. And here's his contract. The denouncement was that, I yelled at the lawyer for five minutes, which is what you pay lawyers for.

• 29:57Speaker 02

  I'm sure I got billed for that.

• 29:59Speaker 03

  Sure, you got billed double for that. And then Liz called me like five minutes later and she's like, hey, look, I know we agreed to do something differently. So the lawyer was just freelancing. It's fine. We're going to do what I said we're going to do. And I said, all right, well, why are you whispering? And she's like, I'm in a shiva.

• 30:15Speaker 03

  But then I think that the flip side is the story Liz tells where she said, well, we had this opportunity to sell the company, we would all make money and the investors would just get their money back, right? So they wouldn't make money, which was a good deal for the founders. And Liz said, no, because she's like, that's not what we signed up for. She has the drive to win, but she doesn't have the drive to screw everybody else to win.

• 30:33Patrick O'Shaughnessy?

  Don't you think in that case, though, that is what the investor signed up for? Isn't that the nature of preferred equity? That's an outcome which you are literally signing up for. Obviously, you want more, but there's nothing objectionable. Had they taken that deal?

• 30:45Speaker 03

  Well, Liz told me when I invested that she was going to make me money. So that's what I signed up for.

• 30:50Patrick O'Shaughnessy?

  But the contract said, you will get your money back first and then...

• 30:54Speaker 03

  I mean, contracts are great fences. They keep you from going past the bounds of where you're supposed to go, right? That you agree on the bounds of things, but that's not the whole agreement. The agreement includes what Liz and I talked about before I invested, right? What does she want to do with this company? Where does she think this company's going to go? What she's trying to do for me as an investor? And it goes both ways. I mean, what I told her I was going to do, I think, is also not in the contract, but at least morally binding.

• 31:17Patrick O'Shaughnessy?

  Maybe that's part of the impasse here, which is the founder's doing one thing, the investor is typically doing some number of things, some number of companies. It's much harder, I think, for the investor to really deliver on, I'm going to help you in all these ways.

• 31:31Speaker 02

  You're one in 100, right, in a fund? And the partner is sitting on how many boards? 10. And until you actually become, I think, to use your language, Patrick, no longer a call auction and something that can actually make money, I think you're sort of not ignored, but you're simply not the priority. And then, once you become the priority, gloves come off.

• 31:48Speaker 03

  So there's an interesting symmetry here where both sides overpromise to get the deal done, but investors expect the founder to overpromise. And I think founders don't expect that the investor's overpromising, right? So the investor's like, oh, I'm going to do all these things. I'm going to be your best friend. I'm going to walk your dog for you. And the founder's like, wow, that's amazing. They're going to do my laundry. The flip side is the founder saying, we're going to be a billion dollar company. And the investor says, yeah, maybe.

• 32:12Patrick O'Shaughnessy?

  All right, back to fundraiser. I don't want to lose the thread. So now you get PSA to every founder raising money. How many pitches do you think you've seen in person? Thousands?

• 32:20Speaker 03

  Yeah.

• 32:21Patrick O'Shaughnessy?

  You've got an N of thousands. What advice would you give to founders who are raising money from professional investors?

• 32:28Speaker 03

  My advice is tell me what you want to happen. Don't come in there and be like, here's what we have and what we're gonna do and let's see what happens. It's tell me what you want to happen. Tell me what you want the world to look like in 10 years that makes a difference. That's actually meaningful. Because I want to buy into the vision. I want to buy into something big, not some small product, not some chat GPT overlay. I want you to tell me how this is going to change things. And if you can get me excited about the vision, nothing else matters.

• 32:55Patrick O'Shaughnessy?

  What as examples, did Jeff from Trade Desk or founders of Datadog say anything to you that correlated with what they ended up doing?

• 33:02Speaker 03

  Oh, totally. Jeff was like, look, this is how every piece of advertising is going to be bought in the future. This way, the what we're doing. And he overperformed, actually, because I don't think in my wildest dreams I would have thought they would be as successful as they are. But I believe that, or at least I believe that was possible. I invested in a lot of ad tech companies and each of them were different and each of them had a different vision of how things would be done in the future. And in each of those different visions, there was some billion dollar company at the end. And I couldn't believe in all of them simultaneously because they were doing different things. But that's part of the job of the investor, right? It's its portfolio. He was the one who was like, well, this is how it's going to be done in the future. And I was like, yeah, probably not. But you know what? I believe in you and I think that if anybody could do it, you could do it. So, yeah, I'm totally in.

• 33:45Patrick O'Shaughnessy?

  What else would either of you change about the fundraising process?

• 33:48Speaker 02

  I just want to respond to Jared for a second. So you want every founder to just come in and make shit up?

• 33:52Speaker 03

  Is it making shit up?

• 33:54Speaker 02

  I think so.

• 33:55Speaker 03

  Telling your vision, what you want to happen?

• 33:57Speaker 02

  Most founders are not building you a flying car and getting all the cars off the road and reclaiming roads for trees and saving the planet. Most founders are building some chat GPT overlay.

• 34:07Speaker 03

  Oh, absolutely.

• 34:08Speaker 02

  On a website now.

• 34:08Speaker 03

  The founders who come in and tell me, well, we've got this chat GPT overlay that can write advertising copy. I'm like, that's so boring. I don't care. And I've had like 10 of those already. That's not changing the world. I think if you said, we're going to completely change the way creative work is done. And then when I ask like, well, how are you gonna do that? They're like, well, we're using chat GPT overlay. It's different, right? I'm not saying that's a good idea, but what is the focus? Is your focus the technology or is it what you're trying to build?

• 34:33Speaker 02

  Most founders are not good at storytelling. The reason why I am so successful at fundraising, as you know, is because I can tell a wild story. And I am outrageously good at reading somebody and being able to adjust the conversation and answer the question I want to answer. It's why I'm good at sales, right? But most founders are not. And so I actually wonder how many founders fail, so many, in the fundraising process because they can't articulate. You just very deftly took one narrative and turned it into something highly compelling. Most founders can't do that.

• 35:00Speaker 03

  You're right. I'm going to change the advice I give founders, which is become good at storytelling.

• 35:06Speaker 03

  No, seriously, I think you're right. You're totally right. And I think if you can tell a good story, not story in the terms of meaning something that's not true, but a story about what could happen.

• 35:14Speaker 02

  Something evocative, absolutely.

• 35:16Patrick O'Shaughnessy?

  Maybe it's as simple as the people that are going to be able to build these big businesses are going to have to marshal resources. And the best way to marshal resources is hiring people. With everything, hiring people, money, customers, is storytelling. All right, now I want to move to the next stage. So you've secured funds. Now you enter this relationship stage where there's an ongoing relationship, there's communication, there's board meetings, et cetera. I like this approach. Okay, now, great. Give advice to the investor that you've now taken money from, or give advice to the founders that you've now given money to about how to do that relationship well now that you are partnered in a long-term way.

• 35:54Speaker 02

  Tell me exactly what is on your mind all the time in plain English. I will learn how to take it if I can't take it.

• 36:01Patrick O'Shaughnessy?

  Just to be nuanced about it, why might you not do that with good motivations as an investor?

• 36:07Speaker 03

  I think that would be fine if it were me. If a founder was doing that with me, telling me all the raw detail about all the problems they had, it makes you nervous as somebody listening, obviously, because here's all these problems, wow, big problems. I think I could deal with it, have dealt with it. But again, you know, I can't fire the founder. I think later-stage VCs might become nervous. And board meetings are three or four VCs from different firms, all trying to prove to each other how smart they are because they need the other people to think they're smart so they can get future co-investments with them. If you start bringing up problems, they're all going to start trying to solve your problems. And the last thing you want as a founder is for them, the investors, to solve your problems or attempt to solve your problems for a few reasons. One, they're not able to solve your problems, right? They're there one day a month for a couple of hours at most, and they don't have enough detail.

• 36:52Speaker 03

  Two, any solution they come up with, your problems, you've already thought of, if you're any good, because you were living this 24/7. And three, If they think you can't solve your own problems, they're gonna find somebody who can. So my advice to founders has always been, you walk in with solutions. The board has hired you, in a sense, or invested in you to be the people who solve problems, not the people who come up with problems. If you have a problem, you walk in with a solution and tell them, look, we have this problem. Here's our suggested solution. Here's three other solutions we thought of but rejected. We can talk about it. And if you walk in with a solution, founders are like, great, this person can solve problems. If you want to be in charge of your company, you need to be in charge.

• 37:28Speaker 02

  So if I were walking into a board meeting, and I were running it in the shitty way where I'm coming with all of my problems, which I wouldn't do, but I were doing that. I would not want those three investors to leave. I would want one of them to say, Liz, I gotta tell you, you're running these board meetings like shit. I have lost all confidence in you because of blah, blah, blah, blah, blah. Here's what's going to reinstate confidence in us. I would love that. If I'm a founder and I can't take that message, I'm not gonna last long anyways. I'm just not, I'm not good enough to run the company. If I can't hear a hard truth like that.

• 38:00Speaker 03

  I don't think that anybody's not good enough to run a company. I think that they can learn to be good enough, right? So the blog post I wrote about your board of directors is gonna fire you was not a blog post I just wrote, right? This was taken from an email that I had sent to many founders over the years, saying, hey, you're having trouble on your board, here's some advice. And to a person, none of them took that advice, because they're like, no, no, no, no, no. These investors just gave me a bunch of money. They love me, they love me, and they're not gonna do anything bad to me. They love me. And this, of course, is not true, right? They didn't give you money, right? They gave your company money, and they'd be more than happy to replace you with one of their buddies, and have them run the company with all that money, if you give them an excuse. I can be as frank as I want, it doesn't mean people are gonna listen to me.

• 38:42Speaker 03

  Another story in the book, right, which is Liz and I were at this event, and we were talking to a VC who was complaining about a founder that he had invested in, who was doing things wrong at his company. And it was obvious to everybody that he was doing the wrong things. And the VC would say, look, look, no, you need to stop doing that and do this. You need to hire these people to do this and blah, blah, blah. And the founder would be like, yeah, yeah, yeah, whatever. And the VC said, I called him every week. Every Friday, we had a call, and I would tell him the same thing. And then after like, four or five times, he just stopped answering the phone. Yeah, whose fault is that? Yes, the founder is doing the wrong thing, but the VC's now lost his opportunity to change the founder's mind about what he's doing. And that means that he's completely powerless. He wasn't on the board, he couldn't do anything else. You need to be able to tell people things in a way that they can digest and believe and act on.

• 39:28Speaker 03

  In a way, VCs have to be storytellers as well. Here's a story about how your company becomes successful.

• 39:33Patrick O'Shaughnessy?

  Like a biased sample of highly disagreeable, highly independent people, which is a feature. That's what everyone wants. That's the kind of person that can build a big company. And so it just makes this relationship of passing ideas and advice back and forth very strange.

• 39:47Speaker 03

  I'm saying what's worked for me, but it hasn't always worked. One of the weird things about venture in general is I've invested in 100 companies in my life, and some of them have been really successful and some have completely failed. But it's not a big enough data set for me to definitively say this is what works and this is what doesn't. And that's true of every VC. There's no VC who can say this is what definitively works because nobody has a big enough data set. So I can tell you what works for me, but are there places where it wouldn't work? Yeah, of course.

• 40:14Patrick O'Shaughnessy?

  Maybe each say more about what would be an ideal board meeting. I mean tactically, structurally. We got to do this. This is governance function. We're going to meet quarterly or monthly or whatever it is. And there's going to be minutes and there's going to be a lawyer there maybe sometimes. We need to run a professional board meeting. What have you learned about this?

• 40:34Speaker 02

  It would be option approvals and comp adjustments and that's it. It'd be 10 minutes once a year if I could get away with it in the bylaws.

• 40:41Speaker 03

  But you can't, right? Because the investors need to know how their investment's doing. They need to know whether they should continue having you as CEO. Like this is their job. So they need for the board meeting to be more than that. You have to run a board meeting that's more than that. It won't be allowed to not do that.

• 40:55Speaker 02

  I don't know that there is a way to structure a board meeting such that it's about an update on the company and it doesn't descend into ego or advice or things that are not necessarily requested.

• 41:07Speaker 03

  I've been on boards like that, but I think it does depend on who is on your board. I mean, to a large extent. And unfortunately, some of the name investors, the people who are like, oh, that investor, they've been so successful, aren't always the best people or board members.

• 41:20Patrick O'Shaughnessy?

  What about a board that's really great? I've been in boardrooms that are, I mean, they're hard. There's tough truths. There's all this kind of stuff, but you would walk out and be like, wow, that felt like a really good. I think if you polled everyone independently, like swearing in your child's life, was that good or not? Everyone would be like, yeah, that was great.

• 41:37Speaker 02

  What made it great? What's the quality of conversation that's happening?

• 41:40Patrick O'Shaughnessy?

  Just extremely detailed revelation of what's going on and very honest discussion about really hard, ambiguous, uncertain decisions that are important for the company, which direction to take the business. We were talking about one at lunch as an example, where the founder brings, in this case, founders bring tons of incredible perspective, they're incredible operators, and investors bring this reference class of experience of, yes, I understand, but I have seen 100 of these, and there's a base rate perspective on this, very just Spock-like perspective. And you bring the Captain Kirk perspective, and everyone emerges a little bit smarter about what's going on. We end up seeing reality, each of us, more clearly than when we started the meeting, and seeing reality

• 42:25Patrick O'Shaughnessy?

  clearly is productive when you're building a business.

• 42:28Speaker 02

  And it requires respect, and it requires research, and it requires listening, and it requires being nonjudgmental of somebody's opinion, right? A very even sort of playing field.

• 42:37Patrick O'Shaughnessy?

  A very clear agreement that people are prepared and knowledgeable to the extent they can be, and that this is in service of making this business great.

• 42:45Speaker 03

  I'd agree with that. I mean, I've been on boards like that. Not all boards I've been on are like that. I'll know that everybody understands what their job is on the board, board members-wise.

• 42:54Speaker 02

  I don't think founders do either, if I'm being honest. I always feel like going into a board meeting, my job is to keep my job, which it literally is, and to fight against the investors. And I know my co-founders across two companies have also felt the same exact way, which is, am I still going to be here at the end of this meeting? And I wish, similar to explaining to a founder at the beginning of their career that they're going to have to turn into a manager, into an operator, into a businessman, similarly, it's you're walking into a meeting, and the idea, the kernel of the idea of this meeting, is in support of the company and turning it into something great, and you are a piece of that. You are not the thing.

• 43:32Speaker 03

  I think a lot of venture investors, especially early stage ones, could do a better job preparing founders for the next stage in their company ' s life. One of the best compliments I ever had was a follow- on investor who had been on a few boards of companies that I had been on the board of, because I had been an earlier investor, said to me, you know what, I love coming onto the boards where you ' ve already been a board member because things just go much more smoothly. And I think, yeah, you know, that ' s because the board was me and the founder, and the founder would come in and do this. And I ' d be like, no, no, don ' t do it that way. Do it this way. And they ' d be like, come on, it ' s just you and me.

• 44:00Patrick O'Shaughnessy?

  What would be an example of that, of that kind of hygiene?

• 44:03Speaker 03

  What do we want to look at, right? What kind of metrics do we want to look at? Founders will, anybody, will look at the metrics that are going well, right? Vanity metric kind of thing, vanity metric problem. And you say, look, let ' s not do that. Let me look at what you ' re looking at to run the business, right? How are you running this business? How are you making decisions in your business? Tell me those metrics, right? Because I would run the business the same way you would. So why wouldn ' t I want to see the same things that you are looking at? I mean, this is a very simple thing to think about, but they wanted to tell me how great the business was going and would find whatever metric there was to show that. I didn ' t want to see those. I wanted to see the metrics that they were looking at that actually made a difference. And I mean, it ' s not rocket science.

• 44:40Speaker 02

  But those metrics are the ones that actually make me fearful about my job.

• 44:44Speaker 03

  And I think that ' s part of the problem is if you ' re making the founder fearful about their job, then of course they ' re going to come in either defensive or scared or worst board I ' ve ever been on, the founder would come in and we ' d have all day meetings once a quarter and he would have every member of his management team come in and present for like an hour and everybody was falling asleep. I just don ' t need to hear all this. It ' s not critical for me to know this today. The information he sent out before the board was a full binder full of information. It was so much that nobody really digested it. And yeah, I know, it ' s our job and you ' d flip through it and be like, okay, well, balance sheet looks good. He never focused on what the actual issues were that day.

• 45:22Speaker 02

  Let's take an example in which I can close customers, no problem. I can expand customers, no problem. I can retain them, but my issue is pipeline, right? And so I'm going to come into a meeting, I'm going to say, hey, I'm struggling with pipeline. And here are all of the ways in which I'm thinking about generating more pipeline. I've got humans, I've got content, I've got marketing, and I map out this whole strategy. But I'm still not getting pipeline. There's only so much time you and I can eat up in a board meeting talking about how to create pipeline. Because to your point, every way to create pipeline has already occurred to me, and it's already being done by the company, by the team. And so if you spend more than, I don't know, five, seven minutes on that as the existential problem for the company, where do we go next in the board meeting? You're going to beat me up because I haven't made headway on pipeline?

• 46:03Speaker 03

  Not if you've talked to me about it before the board meeting, right? You've talked about this, right? You call up one of the investors before and say, look, you know something about building pipeline. What should I do? And if you ask me outside the board meeting, what should I do? You don't have the group dynamic. I know it's you're just thinking about it. Whereas when you walk into the board meeting, you're supposed to walk in, here's the things we considered, and I'm reporting to you on what I think we should do. And if you don't know what to do, you really have no idea? All right, well, that's a problem.

• 46:28Patrick O'Shaughnessy?

  Bringing this back to something very tangible, I'd love to talk about terms, investing terms. This is an interesting scenario where surely investors have some upper hand, some degree of upper hand, because they've just done it a lot, and they're familiar with terms, and it's not typically a founder's N of times negotiating a contract with a bunch of investing terms is very small, and investors is very large. So let's just talk about, I'm curious how you think about educating the world at large from both perspectives in a productive way, about what terms matter, shenanigans to look out for, things of this nature.

• 47:03Speaker 03

  I think I might take the standard venture capital line here and say, my term sheet's very fair. The terms are extremely ordinary terms. There's nothing fancy. I'm not trying to make money on terms. I'm trying to make money on the company succeeding. So you should just take my terms and go for it.

• 47:18Speaker 02

  I pick terms apart, one by one. I rank them based upon what's important. Typically, option pools are overinflated. I spend an extraordinary amount of time on the language that governs the board of directors and who owns what seed, right? I care less about valuation. At the end of the day, if you do it right, somebody wants that to be valuation as everything's a rounding error. I think that person is right. And then I think about actually the long view, which is if you set the stage properly in your pre-seed or seed docs, you can just copy paste those docs all the way through to the end of the company. So I try to think about what are the ways in which I can make them as founder-friendly, as humanly possible, right up front, so that we've set the standard now.

• 48:00Speaker 03

  When I advise founders on terms, especially somebody who, when I'm not investing in the round, so there's no conflict of interest, board composition, obviously, is always negotiable and super important. Option pools, are they pre or post-money, also important. I mean, I think the more that you can share whatever is happening with the investor. So if the option pool is post-money, you're both getting diluted. All right, that means that the investor's not going to push for an oversized option pool like they might if it were pre-money, stuff like that.

• 48:27Patrick O'Shaughnessy?

  What is the biggest shenanigan that you've seen, having seen a lot of term sheets?

• 48:31Speaker 03

  For me, it's actually when the contract doesn't say what the term sheet said. The term sheet is obviously much shorter than the contract. The contract can say lots of things. Actually, that example was from when I was a founder. We had a term sheet, we got a contract, which was not what the term sheet said. And then we had to argue for two months as we were running out of money about, like, this doesn't agree with what you said you were gonna do. That's just super annoying.

• 48:52Speaker 02

  Oh, I mean, I've had so much shit pulled with term sheets. I've had, I think to Jerry's point, there's valuations changed in the middle of the deal, term sheets pulled three days before the close, lead investor deciding to give away a portion of their equity to some other charitable fund that they work with, telling me maybe a day before the close. So much just bad juju.

• 49:14Patrick O'Shaughnessy?

  Maybe we'll talk about something very different, which is when things are going right, which is what I'll call the growth stage of a business. So you've entered into some zone of success where you've built something people want, to use Paul Graham's term, and now you're faced with a new set of challenges, which is everyone wants growth. But I think one of the things that's hard to understand unless you've experienced it is that growth is really, really hard, especially if it's so fast that the new people at the company outnumber the old people three to one or something because you're just hiring so fast. All these things are breaking as you're growing really, really fast. What have you learned about the investor-founder dynamic during this phase of a company? Which of course, everyone wants, in this case, it's like very positive. Everyone wants to get to this phase together. It's the whole point.

• 49:57Patrick O'Shaughnessy?

  But I think still, there are hard parts of managing growth together. So what have you learned each about being in this stage of a company? And the relationship between founder and investor?

• 50:08Speaker 03

  With founders, there's a certain amount of fear. Once you get to that point that they might lose what they've built. They've found a product that people will buy and they want to make sure that at this point, they're not taking the risk with the company, right? An existential risk with the company. Whereas the investor will be like, look, you need to keep taking risks. You need to hire people not being sure if they're the perfect person. You need to spend money not being sure if it's going to work. Because as soon as you have a product that is successful, that people want, your competitors can see that product. So you're going to have competition pretty quickly. And if you don't take the growth, then they're going to take it. You need to keep going. You can't slow down and be like, okay, let's solidify our base and not take that kind of risk going forward. You need to keep taking the risks.

• 50:46Speaker 02

  What happens in growth? It gets messy, messy as fuck. And so Jerry says, go spend all this money, go hire all these people, go scale like crazy. Well, most of those hires are going to fail. And guess what? The company is tripling in size and nobody is talking anymore. And so maybe I actually need to hit the pause button internally so that we can actually figure out how to talk so that we can then go scale even further. And so if I'm doing what Jerry says, which I should be doing, I also now need to clean up the mess internally. And there's all this stuff going on that I actually don't want to share with him because then he's going to say, well, you're doing a really shitty job. How is it that you guys don't know how to communicate? You've been communicating all this time. I feel as if there's so much more pressure now. There's more pressure in times of good than in times of bad because there's so much,

• 51:30Speaker 02

  there's just money sitting on the table and everybody can smell it and they can see it and they want it.

• 51:35Speaker 03

  That's totally true. I think the one thing I would disagree with is I think a lot of investors will look at what you think of as a bug, that it's messy, that people are coming in, they can't do the job, I had to fire them, and think of that as a feature. If you go in there and say, "I hired 100 salespeople, 80 of them didn't work, I fired them," investors will be like, "Great."

• 51:51Speaker 02

  Yeah, but if that's, for example, my executive team, right, and we know that at least 50% of exec searches fail, and 50% of them fail, I'm going to get blamed for those failures, for sure.

• 52:01Speaker 03

  I think it depends on how you pitch it, right? I mean, I think investors have a bias towards action, at least the ones I know, right? So if you're like, "That person wasn't doing it, I fired them," they'll be like, "Okay, well, you should have told us first, but good job."

• 52:12Speaker 02

  So we're back to storytelling.

• 52:14Speaker 03

  Well, isn't that the truth?

• 52:16Speaker 02

  It is. There was once at one company where I paused all product development because we had stopped talking to each other, and it was features, bugs, the product wasn't working anymore. And I purposely did not tell the investors, because what was I going to say? "Hey, we're just not going to sell anything for the next month because we're falling apart." I would have gotten blamed for not being able to see that, but how was I going to see that?

• 52:36Speaker 03

  Sports teams are losing, they say it's a rebuilding year. People buy that somehow.

• 52:40Speaker 02

  See how long I keep my job there.

• 52:43Patrick O'Shaughnessy?

  Jerry's written maybe the most popular post ever about moats, sources of sustainable competitive advantage in business. And at some stage of a company, this becomes very relevant. And in order for a company to be a $40 billion company, like a Trade Desk, or something that is the outcome everyone is after, usually a moat has to start to emerge. And early on, I've heard a lot of founders say, "Jeez, just shut up about these moats. Like, I'm just trying to make a product that people want and sell it and not have everything break." At what point, this is the next step as a part of growth, but even past some successful growth, do you think it's appropriate for the founder and investor to start thinking about this concept together of, "Okay, are we architecting this thing in such a way

• 53:27Patrick O'Shaughnessy?

  that our behavior will naturally start to dig this moat?"

• 53:30Speaker 03

  So I actually think it's something you can think about from the very beginning. The funny thing about that post was it's not actually about moats. It's about moats as a side effect of proving that as a startup, you probably won't have a moat when you start. Right, so I categorized all these moats and said, look, each of these moats is you build over time. When you first start, if you have a real moat that's value adding, as opposed to if you show up with a patent, that value is something you brought to the table, not something you're creating in the company. If you show up without one of those things, then you won't have a moat to start. You have to build a moat before you become successful, because once you're successful, like I said, people can see that you're successful and they'll just copy you. Different kinds of companies have different ways of building moats. Right, so if you're a company with a new technology, that's what you hope will be your new moat? That's a hard thing to build a moat on, right? People, it's easy to copy new technologies.

• 54:13Speaker 03

  If you're a company that's building a new market from scratch, well, that's a much easier place to build a moat, because in building the market from scratch, you end up knowing something about the market that other people don't. And they can see your product, but they can't see what you know. It's something you can talk about from the beginning. How are you building this company? What is your company going to look like when you're successful? And at that point, what do you know that other people don't know? Or have that other people don't have?

• 54:34Speaker 02

  I talked to so many early-stage founders now, and they haven't done any research on their predecessors, especially in the open-source community. They're like, well, I'm open-source, so that's how I'm going to get widespread. And they forget the fact that they're going to need to monetize one of these days. And they don't know who Hashucorp is, or they haven't gone and studied how anybody has done any sort of prior art. And so they aren't able to model all of the different ways in which they might build a company to be successful. Just thinking back to my last two companies, I don't think that anybody ever posed that question to me, which is what are all of the ways that we might go to market here? And let's go and attack them. I think we were simply in search of anybody that would pay us a dollar.

• 55:13Speaker 03

  People focus too much on the early product and not on what the company could become.

• 55:17Patrick O'Shaughnessy?

  How can you have this conversation? We are going to build this company in such a way. That we could build it a bunch of ways, but we're going to pick the way that creates a sustainable differentiated position for us. You've done this so many times. How do you do that well with a company early on, even pre-product or something?

• 55:34Speaker 03

  I do accept Liz's criticism that I am not as direct as I could be. It is one of my failings in life. But generally, what I do is I'll ask the question. I just keep asking the question and make the founder think of it. This is usually before I invest. Because once you've invested, you're like, okay. They're like, great, I can't talk to you for three months because I've got to build my product. So this is before you invest. All right, what is this going to look like in five years? How are you going to keep people from copying you? If you're successful, aren't you in the end going to undermine your own success? Because other people will pile into the market. Like, how do you prevent this? So these are just questions you ask in the pitch process. It's probably iterative and you force the founder to think about these things so that they have thought about them. I mean, then when they start building a product, that's part of their thought process. Hopefully, you can impress the importance of it enough

• 56:17Speaker 03

  that they will keep it in mind once they've got your money. Because once they've got your money, they don't have to listen to you for a long time. You see so many people build companies that have a great product, but no way of keeping people from copying them.

• 56:28Speaker 02

  There's an investor that I think you're familiar with. They asked us when we were pitching them for my first company to write out a series of hypotheses that must be true in order for us to be a big company. And there were pricing hypotheses and market hypotheses. It was a mental exercise that nobody had forced us to go through. This firm said no ultimately, but it actually changed the way that we were thinking about going to market. It was hugely, hugely valuable. And I never use the word value when it comes to investors. And this was in this case. And I wish that more people asked me for that.

• 56:56Speaker 03

  Yeah, that's a good idea. I'm going to steal that.

• 56:58Patrick O'Shaughnessy?

  Can you write a blog post about that, Jerry?

• 57:00Speaker 03

  Well, Liz has to write it. She did it.

• 57:02Speaker 02

  I can send it to you.

• 57:03Speaker 03

  Yeah, do.

• 57:04Patrick O'Shaughnessy?

  I want to see it, too. I just feel like some open sourcing to be done of these docs. In the same way that NBCA has a standard for terms. Sure, it would be cool for them to be like, here's the things you should probably think about before you're starting down this path, especially venture-backed, where the big outcomes are the only acceptable ones.

• 57:18Speaker 02

  There's so much theory when it comes to venture-backed startups that founders don't have exposure to, all this theory about company building. And that's actually the value that I do think investors bring, which is the pattern matching that you're describing, right? Right, here's the data set of 100 companies that look just like you, and here's what they tried and where they succeeded and failed. And let's integrate that into your thinking. That's what I always craved, that I never got from my board.

• 57:39Patrick O'Shaughnessy?

  What feels the most different to you both about these two archetypical roles? Like, you've been a founder. I think you think you're a better investor. Maybe objectively, that's just the facts. And you said, I think, at lunch, you would not ever want to be an investor. Just like the feeling of it to you, what defines the difference between these two roles most distinctly?

• 57:58Speaker 03

  Somebody once asked me what I do for a living. I told them I was a professional gambler.

• 58:04Speaker 03

  And then my partner told me I didn't have to come back to school night anymore. I think you need to sort of embrace the fact that you can't control what happens. The nature of the bet is that you don't know what's going to happen, and there's nothing you can really do about it. You put your money down, and you can kind of steer things a bit, but it's sort of like steering a roller coaster. So when I was a founder, it didn't feel like that.

• 58:24Speaker 02

  An investor feels like somebody who is coming in, doing some actuarial analysis with a little bit of emotion sprinkled on top, and just trying to read somebody and then saying, okay, I'll place this bet, and then moving on and creating a portfolio of bets. And a founder feels like a single-minded mission. I don't know, the quality of it feels totally different. One feels almost plug and play, and one feels hyper-dedicated.

• 58:47Patrick O'Shaughnessy?

  We've come to the end of the canonical journey, which is selling a business, or going public, or selling through strategic, or something, something good, hopefully. We could talk about something bad, too, which is winding down an unsuccessful business. We'll talk about both. What are the things for people out there that haven't been through this experience? What is the prior art here? What have we learned from all the exits, done well or poorly?

• 59:09Speaker 03

  For me, when I think about exits, and I don't think about exits much when I invest, partly because it's so far away, but I always ask myself if this company can go public someday. Because to me, that's the only good exit. It's not really true, right? I mean, there's plenty of great exits that are acquisitions, but if you're building to go public and be independent, be your own standalone company, then somebody might acquire you. Whereas if you're not building for that, then, at least in the tech side of the business, like, the chance that somebody acquires you is much lower, I think. So you should always be looking towards a, how do we build this company to be a standalone, successful company that can last 100 years?

• 59:43Speaker 02

  I think about exits all the time as a founder. Every time. A term sheet, a fundraise is actually an opportunity to exit. Is this valuation right? Do I want to double down again? Is the right time to exit? Is this offer real? Can I be pragmatic about how tired I am? Or whether or not this company can be a standalone company? Or should it be talked away? I think about it constantly.

• 1:00:03Speaker 03

  Interesting, because the only time that when a founder tells me that they have potential acquisition offer where I feel excited about it is when I feel like that founder's done. They just can't keep going. They need to stop. And then I'm like, great, better than acquisition than having you just give up. What do you think about secondary sales? I'm old school. I think it's a red flag. I get it. I understand that if you've been working for five years at a below-market salary and you need a little bit of money to take out and buy yourself a house or whatever, I get that. I understand that. I'm good with that. But I think the general, we're raising a Series B. One of my mentors at a previous job, we would buy companies and there'd be an upfront payment and then earn out. And I asked him once, well, how big should the upfront payment be? And he said, well, big enough that they don't worry, but not so big that they don't worry.

• 1:00:48Speaker 03

  Okay, that makes sense. And I think for secondaries, I feel the same way. Okay, a little, taking some money off the table is great. Taking so much off the table that you no longer have to worry is probably not great for me. As an investor, I don't usually get the chance to sell in a secondary like that. I think for me, it's been particularly difficult because I'm often in the same position, or I was in the same position as the founders were. I didn't have a lot of money. I mean, I put 80% of my net worth into my business, my investing business, and I was living in a rented apartment. And they're taking money out to buy a house in some fancy suburb. I'm like, great, I'm still living in my apartment. Why are we different? So, I don't know. I'm not really for it. I'm happy to make exceptions, but I think they should be exceptions.

• 1:01:25Speaker 02

  I think founders get tired. And I think fatigue is shitty for making decisions. And I think you want the founder. I don't know if it's worry so much. To me, it's skin in the game. I want to take enough money off the table where I can put my kids through college and I can buy a house and I can feel comfortable, but also that I still have a vested interest in the outcome of the company. I believe that founders should put co-sale rights all the way into the very first set of documents they possibly can and fight for the highest number possible. Most VCs don't tell founders that. I didn't even know that this possibility existed until one of my co-founders spoke to a buddy of his on our Series A, so this is 2019. And he was just like, oh yeah, dude, look at what I pulled off. It's not a well-known thing.

• 1:02:06Speaker 03

  There's always an information asymmetry, right? So if the founder is like, oh, I really want to sell a bunch of stock in this raise. My question is always, well, gosh, what do they know that I don't know? I had one founder, company was going public and we all had an opportunity to sell some of our stock in the offering. And I said to the founder, I'm like, you selling any stock? He's like, nope. So I held my stock. And he was right.

• 1:02:29Patrick O'Shaughnessy?

  What should we know about the ways that VCs work together behind the scenes? We talked entirely about this access relationship between founder and investor. We really haven't talked about VC to VC relationship. Anything of note that you would highlight there?

• 1:02:42Speaker 03

  It depends on the time, right? So when I first started investing again about 15 years ago, everything was done in a syndicate, right? So I'd find a company, I'd bring other people in, and I have to do that because I'm a small investor. But bigger funds would find an investment and they would bring me in. They'd bring in a whole bunch of people to help bring in different expertise. And also it was a way of risk sharing, right? So if you're doing half the round and you can then invest in twice as many companies, right? So you're sharing, you're pooling risk. I think there's also a certain amount of, I believe in this company, sort of, but let me pull in somebody who actually knows this market and see if they believe in it. And let me pull in the people who are most likely to bid against me and have them bid with me so that we can not have to compete to get this company done. That was true then, I think, for when money became a bit easier in the venture market.

• 1:03:26Speaker 03

  Funds decided they needed to own the whole round. And I saw a lot fewer syndication opportunities because people were like, well, why would I bring in anybody else to take part of this round when I could put as much money as I want into it? I'll take the whole thing. So it definitely depends on the time. It's actually more fun when I got to invest with other people and I'm a solo investor. So it was nice to have other people around the table.

• 1:03:46Speaker 02

  I think about it a little bit differently. I think VCs talk all the time to each other constantly. I think a founder is always at a disadvantage in a board meeting or with investors on their cap table because they're always talking behind your back. And they will never, ever, ever, ever vote against each other. It's always against the common.

• 1:04:03Speaker 03

  That's true. I mean, I think probably at least a third of my conversations are with other VCs and not about anything specific, but just generally because there's a lot of deal sharing. If I invest in a company, I need other VCs to invest after I do. I need people to come into the companies I invest in. There's a lot of, do you know me? Do you trust my opinion on companies so that you can put money into them? And I think that carries over into the board, right? I'll work with you again, Liz, and I'll work with any of my founders that has done well again if they want to, but I'm certainly going to work with these other VCs again. That certainly affects my decision making. I don't want to piss them all off. Well, now I have with this book maybe, but.

• 1:04:37Speaker 02

  Super problematic, over the top.

• 1:04:40Speaker 03

  I think it's true. The reason that they all vote as a block is because they've talked about it beforehand. There's a great scene in the book about Twitter. Can't remember what it's called, Hatching Twitter, or where the VCs go and have breakfast and discuss what they're going to do. And then the CEO shows up and they fire him, right? Because they've decided beforehand amongst themselves. Shouldn't be surprising that that happens. What have we not talked about that you wish more people knew? One of the things that I like to tell my students, I teach a class on entrepreneurship, is that failing at a company, if your company fails, you haven't failed. Starting a company is, seems risky, but it's not that risky, right? I mean, I started a company, I was a co-founder of a company, we raised venture capital, my board fired me, and I was escorted out of the building because I was intransigent and... What did your intransigence look like? They were kind of like, well, maybe you should work from home. I'm like, no, thanks.

• 1:05:25Speaker 03

  I'll keep working from here. They're like, well, maybe you should work from home. I'm like, nah, that's all right. I'll just work from here. But the thing that I thought at that time, when I left that company, was that's it, I'm done. Nobody's going to hire me again. Nobody's going to give me money again. Nobody's going to do anything with me again. I'm just disgraced. And that turned out not to be true at all. I mean, literally two weeks later, one of the investors in the company, not somebody who was on the board, but one of the other investors called me and said, hey, I need you to come in and consult with me on this company. They need some help. And when I went and did that, and then they had lunch, when they're like, okay, so what are you going to do next? Like, they wanted to invest in my next company. I'm like, I just got fired from this company. And they're, it's just not like that in this world, right? Having the experience of going through it is so valuable.

• 1:06:05Speaker 02

  I mean, so many people in work get wrapped up in work and it is their entire identity. And founders especially, I think, speaking personally, forget that they have a personality outside of this and a life outside of it. And it's easy to forget that. And I think people calling Jerry up after he got fired and saying, hey, you still have value, come help me, is an example of that. Yeah, I wish more founders went to therapy. So that they understood that they were somebody independent of the thing that they were building, that they didn't have to work seven days a week in order to prove their value to the universe, that it's okay to shut down.

• 1:06:37Speaker 03

  We don't want that.

• 1:06:38Speaker 02

  Of course not.

• 1:06:40Patrick O'Shaughnessy?

  What else is most interesting to you both now as you think forward? Books behind you. You've written the book, said a lot of interesting stuff, some of which we've talked about today. What now?

• 1:06:50Speaker 03

  It's interesting to me how people have misunderstood some of the things we've said, or people have taken from the book what they wanted to hear. So Liz forwarded me an email of how a founder sent her and said, oh, thank you so much. I never knew that I could negotiate away preference. Do think there's a lot of education to be done. I am a believer in this project of people going out and starting companies and working for themselves and building things. And I think it's really a driver for, as VC says, is a driver for innovation. But more than that, I think it's the best way for any individual to self-actualize, right? So I really want more people to be able to do this. And so I'm interested in trying to figure out how to make it a better career path for people, being founders, for everybody.

• 1:07:29Speaker 02

  If I had to do my life over again, I wouldn't have gone to college. My co-founder of my last company dropped out, my CTO at, I think, 19, and drove out to Silicon Valley and grew a beard so that people didn't know how young he was and got a job, and is amazing. My father certainly didn't tell me when college started that this was a place for me to explore and try on ideas and go gangbusters. And I didn't discover that until I became a founder. And I was like, wow, I am sitting here with the smartest people on the planet, just batting around ideas for a job, and people pay me for this. And so I think, Jerry, to what you just said, there's so much possibility for it as a career path, and I wish more people knew that it existed. You don't even need to be a coder, right? You can be a marketer, be a storyteller, you can be a designer. It's just super cool.

• 1:08:13Speaker 02

  I was in the Dublin airport yesterday, and my boyfriend and I started talking to this guy who turned out to be a network administrator for a giant pharmaceutical company. And they had acquired a company in the south of Ireland, and he was there to go integrate their systems. And he was talking about how bored he was. And he was talking about all these different jobs that he had tried on in Tampa and at a university. And I was like, man, you should come and get a job as like a... Senior support engineer or a solutions architect at a startup, and you would never be bored again. And I wish that he had known that that opportunity existed for him and in a way where he wasn't necessarily risking a 401k or stability for his wife and his dog.

• 1:08:49Patrick O'Shaughnessy?

  Interesting that the overlap is that there was more awareness that there is a more creative, less boring path for almost everyone.

• 1:08:57Speaker 03

  Oh, yeah. I mean, I spent my first half of my career, well, maybe a third of my career now that I'm old, but it was working for big companies. They never let you forget that you're just a cog in the machine. And the last thing in my life I wanted to be was a cog. Right? So when I went off and worked for myself, it hasn't always been easy, hasn't always been a ton of money coming in, but I never once considered going back to work for a big company again.

• 1:09:17Patrick O'Shaughnessy?

  Liz, I've had the chance to ask Jerry this traditional closing question before. Now I get to ask you, what is the kindest thing that anyone's ever done for you?

• 1:09:24Speaker 02

  I was stepping down as CEO, and it was the most difficult call I ever had to do with the company. And there were 100 people working for me at the time. And the day before, I had told my head of recruiting, who was also one of my best friends. And he came over that morning at 7:30 a.m. with his rescue dog, who is the love of my life. And I was on the Zoom call, giving my going away speech, hysterically crying. And he was sitting on the floor next to me with the dog holding my hand so that I didn't have to be alone. Oh, my God, I'm going to cry. So I didn't have to be alone when I was doing that.

• 1:09:59Patrick O'Shaughnessy?

  Amazing. Guys, this has been really fun. Love this format.

• 1:10:03Speaker 03

  Yeah, thanks, Patrick.

• 1:10:04Patrick O'Shaughnessy?

  I appreciate the spirited discussion. Thanks for your time.

• 1:10:06Speaker 03

  Yeah, this was awesome.

• 1:10:07Speaker 02

  Thank you.

• 1:10:09Patrick O'Shaughnessy?

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