Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Oren Zeev on Why Diversification Is Overrated, The Downside of Thematic Investing, Making Quality Decisions In Uncertain Conditions & Why He Has No Reserves Allocation About this episode Oren Zeev is the Founding Partner @ Zeev Ventures, one of the best and most under the radar firms in the early stage Silicon Valley landscape. Over the past decade, Oren has backed the likes of TripActions, Tipalti, Audible, Houzz, Chegg and Hippo Insurance to name a few. Prior to crushing it with Zeev Ventures, Oren spent 12 years as a General Partner @ Apax Ventures, starting in Israel and then moving to the US where he headed the Technology Practice of Apax and the Silicon Valley office. In Today’s Episode You Will Learn: 1.) How Oren made his way into the world of venture with Apax and how that led to his founding his own firm, Zeev Ventures? 2.) Having been in a venture partnership, why did Oren want to be a solo GP? What are the benefits? How does it change decision-making? What are the downsides? How does Oren discuss deals and ideas without partners? How does Oren explain the decision to LPs on being a solo GP? 3.) Why does Oren not believe in thesis-driven investing? What are the dangers and downsides to it? Why do most managers still do it then? Why does Oren specifically look for under-appreciated markets? How is pricing and competition different there? How does Oren assess his own price sensitivity? 4.) Why does Oren think that diversification is overrated? How does Oren think about cross-fund investing? Why is it such a strength that managers should use? Why do many not do it? How does Oren think about reserve allocation? Why is he the only VC to not have a reserves strategy? 5.) How does Oren think about fund deployment timelines? Why do LPs not like the annual fundraising approach? How does Oren size up his position in companies over time and round? How does Oren feel about founders taking secondaries? Items Mentioned In Today’s Show: Oren’s Fave Book: The Last Lion: Winston Spencer Churchill: Defender of the Realm Oren’s Most Recent Investment: Treeverse As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Harry Stebbings? Welcome to the 20 Minute VC with me, Harry Stebbings, and diving straight into the show today. This guest's advice, ideas and guidance, they've really been so formative to me in my thinking. A wonderful and very humble player in the world of venture. And so with that, I'm delighted to welcome back into the hot seat, Oren Ziv. Oren is the founding partner at Ziv Ventures, one of the best and most under the radar firms in the early-stage Silicon Valley landscape. Over the past decade, Oren has backed the likes of Tripactions, Tipalti, Audible, Howells, Chegg and Hippo Insurance, to name a few. Prior to crushing it with Ziv Ventures, Orin spent 12 years as a general partner at APAX Ventures, starting in Israel and then moving to the US where he headed the technology practice of APAX and the Silicon Valley office. I'd also want to say a huge thank you to Ariel Cohen at Tripactions for some fantastic questions and suggestions today.
0:44 Harry Stebbings? Ariel, I so appreciate that. But before we move into the show today, I wanted to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on user experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. They raised a total of 16 million in funding and recently got acquired by Dropbox for an impressive $230 million. Check out hellosign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures. And speaking of incredible solutions to complex problems, the team over at Pendo, the product cloud company, is expanding rapidly throughout Europe
1:26 Harry Stebbings? and recently released a version of their product which is designed and priced specifically for startups. So no matter whether you're an operator or an investor in Europe or the US, Pendo has you and your portfolio's product covered, showing you how your product stacks up against your peers, analysing over a thousand software products and creating benchmarks for startups, scale-ups and enterprises across five different categories. And you can find out more today at pendo.io/products-benchmarks. That's pendo.io/products-benchmarks. And finally, I want to talk to you about Point. Point is a premium card, the first debit card with rewards from brands that you actually care about, like earn 5x on subscriptions like Spotify, 2x on all dining experiences, including food delivery apps.
2:10 Harry Stebbings? Like Postmates and OneX on everything else. You're rewarded every time you spend and points are redeemed for cash. Instead of drawing up a credit line for rewards that aren't relevant, you can use Point Card and start getting a break on purchases with your favourite brands. And it's backed by the likes of Y Combinator and our dear friend from the show Jeff Morris Jr. They're revolutionising the way we spend. And listeners of 20VC have the exclusive opportunity to join Point's invite-only launch out of beta in July. Head over to getpoint.app/20vc for early access and a sneak peek at Point. However, that's enough from me, so now I'm very, very excited to hand over to a dear friend in Oren Ziv, founding partner at Ziv Ventures.
2:55 Speaker 01 You have now arrived at your destination.
2:58 Harry Stebbings? Oren, it is such a pleasure to have you on the show for a second time. I so enjoyed the first time, but thank you so much for joining me once again today, Oren.
3:05 Speaker 02 Thank you. Great to be here.
3:06 Harry Stebbings? I would love to kick off those day. And for those that made the terrible sin of not listening to our first episode, tell me, how did you make your way into the world of venture and come to be founder at Ziv Ventures today?
3:16 Speaker 02 Oh, wow. Okay. Started as an engineer at IBM, IBM Research, back in Israel. Done it for a few years. I got an MBA in France, actually, and came back to Israel. It was 1994, the whole venture industry just started. There were 10 people. I got hired by APAC. So I was one of the first 10 people maybe in venture in Israel. At some point, I moved to the Bay Area, still with APAC. So I spent my first 12, 13 years in venture with a traditional venture firm. Today it's private equity, but back then it was also venture. And then I retired and I didn't think I would do it again. But I started investing on my own. And for a bunch of years, like seven or eight years, I invested my own money but behaved as a VC. So I had a very unique model of investing my own money,
3:59 Speaker 02 but in significant amounts and leading rounds and behaving like a VC, taking board seats, etc. And then five years ago, I started also raising funds. Basically continued to do the same thing I was doing with my own money, just a little bit on a bigger scale.
4:13 Harry Stebbings? I mean, what a journey it's been also with Zie Ventures. And we just had Arrow trip actions on the show and obviously said the best things about you. I do want to ask it, Oren, and this is off schedule, but you know, I always look to learn from the show and I've never seen a downturn before. As you said there, you were one of the first 10 in Israel in venture. You've seen multiple.
4:29 Speaker 02 Yeah.
4:30 Harry Stebbings? You think the downturns impacted your investing mindset today when we sit in this quite precarious macro position that we're in?
4:36 Speaker 02 Look, I think in general, the more you experience things, it doesn't make you clairvoyant. You don't know what's gonna happen, but at least you're more, you've seen more things. You probably have better intuition. And I think most people intuition was when they started was it's better to overreact than underreact. So I think companies in my portfolio and in general reacted very fast. And as it turns out, at least right now, it looks like things look way, way, way better than I or probably anyone else could have expected three months ago. If you told me three months ago that we'll have the unemployment that we have, there's no vaccine or cure in sight yet. We're in lockdown for so long and yet the public market is all time high, technology companies are all time high. By and large, companies are doing great.
5:18 Speaker 02 That, you know, work from home, what turns us so well, I honestly, I, I, I would not have seen it because every crisis is different. It's not a repeat of the previous one. But I just having seen more just gives you a bigger, I would say, set of experiences. But every crisis is different and nobody knows the future, including the people who claim it.
5:35 Harry Stebbings? No, absolutely. That is very true indeed. I do want to start today because you mentioned the forming of Zie Ventures there when you said about taking in external money. At that point, you had a choice of, you know, building a firm or starting as a solo GP and starting a solo GP firm. So my first question is, why did you decide to be a solo GP and choose that route?
5:53 Speaker 02 Yeah, you know, it wasn't even an option. I've been there, done that. I did not enjoy the elements of the partnership dynamics. And there was no reason for me to do anything other than do what I do today. So the question was, is there a way for me to continue to behave exactly as if it's my own money, but have some leverage? And if there wasn't an opportunity to do that, I would rather just continue to just invest my own money. I know there was no scenario that I would build a firm because, I mean, we'll probably talk about it later, but I think I have all the advantages in the world without any of the disadvantages.
6:23 Harry Stebbings? Can I ask, you said there about kind of elements that you didn't enjoy. Everyone's different and so it's kind of no right or wrongs. But what elements did you not enjoy and didn't really kind of align with your personality?
6:32 Speaker 02 Well, I think that over time, you do build up frustrations with not being able to pursue your convictions always. Because there are other people that may have different opinions. And at the end of the day, I want to be responsible for my own decisions, period. And not to pay the price for other people's mistakes. I'd rather pay the price for my own mistakes.
6:52 Harry Stebbings? No, I absolutely get that in terms of the accountability. I guess the one question that I have for you, kind of not pushing back, but questioning the model is, is more a lot of people credit the increased level of thinking and kind of scrutiny that one can apply to a deal with multiple partners. How do you think about having multiple people to discuss deals with and ruminate on those ideas with? And do you look to solve for it?
7:12 Speaker 02 Yeah, so it's interesting. I see a huge difference between consulting with people because you care about their input and consulting with people because you need their approval. And when I consult with people, and I do consult with people, it's not that I think I have a monopoly over wisdom and I learn from people. But I choose the people that I think I would value their input. And it may be even deal specific, you know, for this deal, I want to hear what this person has to say. For another deal, I care less about this person, but I care more about what another person has to say. And when you're in a partnership, you didn't choose all the partners. And even if you did, then you might have changed your mind. But the bigger point, by the way, is that you're in a different mode. When I consult with people before I make a decision,
7:54 Speaker 02 the only reason I consult with them is because I want to know what they think and take it in. When I quote unquote consult with people in a partnership model, I'm also in a persuasion mode or sell mode because I need to get it approved. So I think just naturally, and I think everyone is like that, you're just less receptive. First of all, you're just a little bit less transparent because you need to persuade the other person. Yes, you want to listen to what they have to say, but you also need to persuade them. So maybe you're not as transparent in terms of like concerns that you have and just naturally. And also because you are in persuasion mode, you're less in a receptive mode. You're more in a, okay, how do I get this person over the hump as opposed to focusing exactly what?
8:33 Speaker 02 They're saying and understanding that they have no. So anyway, I find it a much more pure way to get input that I don't need to convince anyone. I think it's a huge advantage.
8:42 Harry Stebbings? Can I ask again, and I'm sorry for this, is that convincing mode, is that not the sign of an unhealthy partnership, though? Like Fred, my partner always says, hey, we seek the truth together. Now, that might be an idealistic perspective, but he says like, every challenge is a gift. It's me and you, Harry. We seek the truth together. There's no salesmanship here.
8:59 Speaker 02 You're talking about a very small partnership, two people. It's almost like a one person. Okay, so there is a spectrum here. The larger the partnership is, the more you also feel that you need to. Yes, of course, everyone, you know, we're seeking truth together, but it more becomes also a persuasion.
9:15 Harry Stebbings? Yeah, no, absolutely, it doesn't. I totally do see.
9:18 Speaker 02 I can totally see that a very, very small coherent partnership behaves almost like a one-person partnership. So I'm not religious about it, but still, even if it's just one person, I have one person that, actually, his name is also Warren. He's probably the most constant go-to person for these things. And we absolutely, we're not trying to persuade the other person, and we absolutely seek the truth together. But in the end, if after I heard everything and took everything in, I still think I should do the deal, then I want to be able to do the deal. And that I would not have got if it was like a formal partnership where both of us need to, need to.
9:49 Harry Stebbings? No, I do agree with you there. Another kind of really interesting perspective that you took when, when setting up the firm with that blank canvas, was you decided not to be a thesis-based investment firm. So why do you not believe in the thesis-based investing approach, Warren?
10:01 Speaker 02 I don't believe that I need or would serve me well to have hard and fast thesis. I do recognize that there are a couple of benefits, and in other circumstances, I could see people adopting thesis. I think one of the reasons VCs have thesis is it actually helps with LPs and with funders.
10:18 Harry Stebbings? Yeah, it helps them pack.
10:20 Speaker 02 But I don't feel I need it. So I feel I have an exemption from this. The second reason is you wanna have an edge. And if you have a thesis, then at least within the space that you really are focused on, you will have advantages in terms of knowledge, you'll be able to impress the founders, et cetera. So again, I see why if I was maybe fifteen years ago, twenty years ago, maybe I would be more thesis driven. These are the advantages, but there are very, very big disadvantages in my opinion. It tends to lead you really to group think. Because at the end of the day, most of the VCs are basically very similar. So obviously, these areas become overfunded, they become overly competitive.
11:02 Speaker 02 And yes, there will be some big winners out of this category, this thesis. Most of the time, sometimes the thesis turns out to be wrong. But let's assume that the thesis was actually right. You're much less likely to really win big, because the biggest wins have some contrarian elements to them. And typically, the biggest wins are market leaders. When you invest early in a company that becomes the market leader, in a market that matters. And the chances that this happens, when everyone already knows that or thinks that this is a hot market and everyone is chasing it, lower likelihood that of all the companies in this space, including, by the way, bigger companies, you will become, or the company that you backed will become the market leader. It's much more likely to happen when it's kind of like a space that nobody thinks much about.
11:45 Speaker 02 And the company has an opportunity to develop quietly for a year or two or three and build real modes and real advantages. And once everyone understands that it's an interesting space or it's an interesting opportunity, it's game over.
11:59 Harry Stebbings? Do you let serendipity take its course and deals get sent and it's in the natural flow of venture? Or do you specifically look at markets that are underserved, unsexy, not getting any attention?
12:09 Speaker 02 If I'm honest, it's more serendipity. I wish I was more proactive, but it's more serendipity. Again, I'm leveraging the fact that I've been doing venture for twenty five years. So I leverage the fact that I don't maybe need to create my own opportunities because I see enough really interesting opportunities with more serendipity that probably would be wise to do, maybe if I was more early in my career.
12:29 Harry Stebbings? Listen, I totally understand on the serendipitous element now. You mentioned the kind of a heater. Markets in particular and with heat often comes price inflation, something that I'm pretty surprised by is the lack of price deflation we've seen since Covid with prices remaining great. How do you feel about price sensitivity? How disciplined are you on it? And how core to that, your kind of thinking is it for you when making the investment?
12:50 Speaker 02 It's not the most important thing in my mind, because at the end of the day, the biggest wins are not because you paid cheap. You don't win because you paid cheap and you don't lose because you pay expensive. You win because you chose the right team and the right opportunity, the right company. And these companies can go so big, even if you pay twice of what you should have, it doesn't matter because it can still be a hundred X. To me, that's not the issue with hot market. It's not so much that the valuations are higher. It's the other thing. It's just that it's just overheated, overfunded, too many competitors. And it's just the chances that your company is going to be the market leader is just much smaller. That to me is much more of a factor than the valuation, you know, if, just like we tell founders that they shouldn't be overly valuation sensitive.
13:32 Speaker 02 And if it's the right, they should go with the right investor who would help them be successful. And it's true in the other direction as well. I think that if I'm going to walk away from a deal because it cost me 20% more, then you know what? I shouldn't have done the deal in the first place. That's how I feel.
13:49 Harry Stebbings? Yeah, no, that's I definitely agree with you there. I guess my question is also, you know, I speak to many, many experienced managers and they say, actually, the biggest challenge for me is I've seen everything be done before in a previous situation and I've pretty much seen everything fail. And so it's having this mental plasticity to see new opportunities in a new light and not try and attribute kind of past failures to current opportunities. How do you think about having that mental plasticity when you have seen so much, both work and not work?
14:19 Speaker 02 I think that many times I see investors derive the wrong conclusion from past events. So I'll give you an example. An investor invests in a husband and wife team and the company fails. And maybe even it failed because they went through an ugly divorce and the whole thing imploded. And the conclusion is, for many people, I'm never gonna do it again. I'm never gonna back a husband and wife team. Now, I think it's the wrong conclusion because this husband and wife team failed. Another husband and wife team could succeed. Or another example is, someone comes with some idea that was tried 10 years ago and failed. And so the investor says, okay, seen it before, it failed. But this is very shallow thinking because maybe the idea failed because 10 years ago, the conditions were not there yet and today they are, for example.
15:04 Speaker 02 So I think it's really going down double clicking, going down the next level, thinking a little bit deeper and not draw the wrong conclusions from the past.
15:12 Harry Stebbings? You said there about kind of going deeper and I'm totally with you. I think one thing that really concerns me, Oren, right now is there's not the time to go deeper with so much capital in the market. Fundraising timelines have been compressed so much, as we both know, that deals just go so fast. Where traditional diligence and also just get to know you, Oren and Harry spending time together, doesn't happen. How do you get past the compression of fundraising timelines and how do you feel about it?
15:36 Speaker 02 So I don't equate going deeper with necessarily taking weeks to make decisions. You know, I think that you can think deep fast. And I think part of the keys to success is making quality decisions under uncertain conditions quickly. Now, from my standpoint, I've always made my decisions extremely fast. Almost all my investments were done within 24 to 48 hours. And not because of any competitive pressure, not because I thought that someone else would, just because to me, if it takes me longer, it means that I don't have enough conviction. It's not obvious enough. And so typically, there would be one or two things that I may have a question about. And if it's really too hard to get an answer, then it's probably not a deal that I would pursue. So I'm not concerned about compression because I'm faster than anyone. Again, because, why?
16:21 Speaker 02 Because I don't have any process. I don't need to write a memo. I don't need to get my partners to read the memo, to convince them, then to convince me to, you know, I just, as soon as I decided I wanna do it and it could be within an hour, then I pursue it.
16:33 Harry Stebbings? I do agree, Ian, in terms of the time to build conviction and I'm envious on the Not writing memos that my dearest friends were.
16:39 Speaker 02 Well, you know, I had like many, you know, at Apex and it was thirty page at least with another fifty percent of exhibits. And so even if it was obvious to me within now, it still was a process of a few weeks.
16:49 Harry Stebbings? Yeah, absolutely. And that thirty pages makes me want to jump out the window of my high rise building. But I'm glad that doesn't happen. Can I ask, because another really interesting element of your structure is also kind of the funds themselves, often raised on maybe faster cadences. Than three year fund life cycles, often on annual cycles. Why do you think about this kind of annual cycle? And what are the benefits?
17:08 Speaker 02 Yeah, the honest truth is that there's no real strategy around it. It's not that I plan it. Honestly, every time I raise, I think I'm raising for a couple of years and then I just invest it faster than I expected. But I refuse to be held hostage to an artificial timetable to invest the fund. I don't want to manage the pace. I want to be totally driven by the opportunities. And if it takes me three months to invest the fund so big, if it takes me five years so big. Now, it's very difficult again to get away with from the LP perspective because the LPs hate it. Probably this is the number one reason why I talk to an LP, they don't end up investing. Or even an existing LP decides not to proceed in the next fund. This is by far the number one reason.
17:50 Speaker 02 Many LPs, that's not how they run their business. So that totally throws them off and it's very difficult for them. But again, I'm in this very privileged position that I don't care. I'm not working for the LPs. I'm working for the founders and for myself. So if it doesn't work for an LP, they're not a good fit and that's it. So I just raised a fund that looks like a good size and then I invested based on the opportunities. And as it happens in the last, since two thousand and fifteen, I've already done six funds. So you're right, it's even faster than annual. But it's not, you know, it wasn't necessarily my intention.
18:21 Harry Stebbings? Yeah, absolutely. And what companies you have in them? And I have to add, so yeah, I mean, huge congrats for that. I do have to also, because when you think about that faster deployment, and you said you don't think about the pace so much. Do you think about the diversification? And how do you think about building enough lines of diversification, given the speed of deployment?
18:37 Speaker 02 Well, yeah, so that's the other thing. I think diversification is way overrated. I think that VC funds are generally way over diversified. And I'll explain. So first of all, all my funds have between five and ten. And not by design, it just happened this way. So I do think some diversity you need. I'm not gonna put the entire fund in one or two investments. Uh, because there is an element of risk and luck, but I do have several funds that only had five investments and my biggest fund in terms of number of companies that ten. Which is the typical VC fund has, early-stage fund has twenty, twenty-five or more. I think that the big advantage in being concentrated, first of all, you need to make fewer investments. So you just go all in in the ones that you have high convictions. So it also raises the bar, because if I don't feel comfortable putting a large amount, I shouldn't do it at all.
19:21 Speaker 02 And if I don't feel comfortable risking a significant amount of the fund and making the failure painful, again, it's better that I don't invest at all. So I'm raising the bar this way. It also helps me in concentrating on fewer companies. And when I hit it out of the park, then it's really meaningful. When you have thirty investments, even if you have, let's say you have a home run, twenty X. Still has a return on the fund, assuming that it was like evenly distributed between the companies. If I have a twenty X or thirty X, and thank goodness I have a bunch of them, a lot more also. But you know, this is enough already to return several times the fund. But here's the bottom line. If I invest in six, seven, eight companies and I don't do well, in my book, it's not because I didn't have enough diversification, it's because I'm doing something wrong.
20:05 Harry Stebbings? Listen, I do totally understand, but it is a very different perspective. And so I I always welcome different perspectives on the show, because you're right, most of thirty to forty, really. Question, given the cadence, how do you think about reserves, reserve planning? And what does that mean for like cross-fund investing?
20:19 Speaker 02 So thanks for reminding me about cross-fund. So first of all, let me start with that. I do cross-fund as a rule, not as an exception. Generally speaking, ninety-nine percent of the cases, for a VC fund to do a cross-fund, they have to get approval from board of advisors or something like that. Which raises the bar, because it's a process and there's very little incentive to go through it, because if you make a mistake, you look like an idiot and you have agony face. And it's also difficult from an internal dynamic standpoint, because you'll get resistance from your own pop. So these cross-funds are really, really rare. To me, this is crazy. If I have something that's great, I have the insight, I have the access. It's not additional work, then why? I wanna cross funds. So again, this is something that was just ground rules from day one with my LPs.
21:00 Speaker 02 There was no misunderstanding. I told them, if you're uncomfortable, I'm gonna do cross funds as the rule. Not automatically, by the way, only if I'm excited about it. And if an LP is uncomfortable with that, they're not a good fit. So I do cross fund, which back to your diversification question. It's not just that I have five, seven, eight companies per fund. There's huge overlap between the fund, which adds to the concentration and the lack of relatively low diversification. With reserves, I also have a very unorthodox approach. I pretty much do not keep reserves or keep very, very little. And the reason is because I do cross fund, I don't feel that I need to keep reserves. Because I can invest from the next fund if I want to. And here's the problem with the reserves. And by the way, reserves is like hundred percent, other than myself, everyone does it.
21:44 Speaker 02 I don't want to say hundred percent because I didn't talk to anyone, but close to hundred percent of the fund have this concept. And we had it at Apex as well. Why do I have a problem with it? Because I think that generally speaking, the returns on the reserves are gonna be lower than the first time you make an investment. And the reason is, the first time you make an investment, you really scrutinize the investment. Maybe you see a hundred, two hundred, five hundred deals before you decide to make an investment. With the reserves, you allocate them, you put them in the next round. And it's almost automatic, you're like in autopilot. And someone else priced the deal and you put your parata, no other partners would push back because it's kind of what do you want? This is what we planned for and someone priced it and we're just putting the parata. So you're putting yourself in a situation where you really are not investing new analysis and new thinking into the decision.
22:29 Speaker 02 It's like a continuation play which is automatic. So by definition, you just gave up the opportunity to be smarter. Why put your parata? Why not put more if you like it? Why not put less if you don't like it as much? So anyway, this is how I think about it. So you're right, it's very, very different. And LPs are not used to it, so sometimes I need to explain it to them. But again, if someone is uncomfortable with it, they're just not a good fit. I would say that the pacing issue is typically a bigger issue for the LPs than this. And despite the fact that it's unusual, they actually accept, but the pacing is hard for them.
22:58 Harry Stebbings? Listen, we both know this game well. Do you not feel that the majority of GPs today on the parata side, they almost feel forced? To it because the next round is, hey, come on, the existing investors are ponying up and doing theirs, right?
23:09 Speaker 02 Yeah.
23:09 Harry Stebbings? Would you agree that actually it's not a belief in the company, but it's actually just a feeling of being forced? And I guess, how do you avoid being forced, Oren?
23:17 Speaker 02 Yeah, so by definition, you're absolutely right. By definition, if it's kind of expected from you, then it stops serving as a positive signal. Because I know that the existing investors would do it regardless of what they think. And so anyway, how do I avoid it? First of all, I have a very close relationship with the founders. I'm always very truthful. I'm always coming from a place of authenticity. I always share my thought process. And oftentimes it actually plays, I can give you examples where sometimes I will put more, sometimes I would put less. It depends. Honestly, I've been able to not getting forced, what can I say? And without, I cannot think of a single case where it hurt the company.
23:53 Harry Stebbings? Can I ask another one, which is troubling, which is you invest in, say, trip actions seed or their series A. And then you've been able to continuously allocate capital and concentrate capital into incredible companies, trip actions, the house. How, how have you done that when people are so aggressive now in bidding up the next round so fast? How do you get the allocations ahead of the big funds elbowing out existing investors?
24:15 Speaker 02 First of all, it comes down to the relationship with the founders. But in the case of trip actions, I led the seed, then I decided to lead the A. There was competition, but the founder preferred me, so I led the A as well. By the way, Arv joined me in both of these rounds and then we switched places in the next two rounds, which were called A1 and B. He led and I would say co-led with him, but he's the one who priced it. And I felt that it was very compelling. In all these rounds, I felt it was compelling deals. And then the last two rounds, which Andreessen led, in that case, I did not co-led, but I still participated. But I participated not because anyone forced me or expected me or asked me. Nobody expected me to participate at these levels of valuation. And I just felt, and still do, by the way, that forget the absolute multiple, the absolute number, which sounds very high.
25:00 Speaker 02 I believe in time will tell if I'm right or not, that those deals, even with what happened with COVID, obviously I didn't know about COVID. But I think we're going to end up as very compelling deals as well. So it's an example of I led two rounds, co-led, but I would say it was 80% light speed, 20% myself. The next two and then follow the last two. But generally speaking to your question, it's a relationship thing, but honestly, the opposite also is true. The last two rounds, I couldn't put my pro rata, even if I wanted to for my funds, they're just too small. And I asked Ariel if I can do an SPV and he said, you know what, whatever substrates it is, I really prefer that you didn't. So although you have the legal rights and if you decide to pursue it, you have the legal rights, but I prefer that you didn't. So I didn't because it found the regardless of my rights. If the founder asked me not to do something, I'm not gonna do it.
25:43 Harry Stebbings? No, listen, I I I totally agree and absolutely the right perspective in my mind. I mean, you mentioned Ariel there and you have a very special relationship with him. And you said before, and this is kind of moving more to the people element. You said before, I like to invest in nice people and avoid sociopaths and assholes. Totally agree with you there, Ron. But can you expand on this and how do you kind of think about assessing founder psychology and character?
26:04 Speaker 02 Yeah, so first of all, there's no question that there are examples of psychopaths and assholes who are very, very successful. So I'm not saying that you cannot succeed being an asshole. But I actually do not think that it's necessarily a good thing. Or something that helps with his success. I think that the people who succeeded being assholes or sociopaths probably succeeded despite that, not necessarily because of that. But even if they succeeded because of that, there are enough great people, nice people who became very, very successful. So and life's too short, so what am I doing it for in the first place? I don't do it because I need more money. I do it because I enjoy the process, I enjoy the experience, I enjoy the relationship with the founder. So why would I, life's too short, why would I wanna put myself in a situation which I do not enjoy?
26:47 Speaker 02 So this is just to answer why I'm attracted to people I feel are super nice and great people. And by the way, I think it's a mutual attraction. I think that the sociopaths and the assholes, for whatever reason, they're not attracted to me either. So we're not attracted to each other. So it kind of like plays out well. Or is that, oh, how do I assess? So many times I've known them for a long time, many, many. In other cases, most cases, even if I didn't know them very well, we have one degree of separation that I really trust and they trust. I also tend to invest in people a little bit on the older and more experienced side. So it's not a mystery, their character, it's like there's no way that. That they can be source of battle assholes without the world knowing about it. At that point, maybe when they're when they're young, you don't know yet. But at that point, you do. I tell what I do not do.
27:32 Speaker 02 I do not send them to a psychological assessment or anything like that. I rely on my intuition and so far it served me very well.
27:40 Harry Stebbings? It has indeed. You're found as a fantastic people. I I think the final element on the people themselves before we move into the quick fire is you said another thing which I just loved. And you said about turning laziness into an advantage. Now, Oren, I don't know who doesn't quite want to do this. How do you think about that? And what's the secret to the conversion?
27:57 Speaker 02 I'll give you a few examples of before that. Sometimes LPs ask me, how do you do diligence? And I tell them I don't. And I exaggerate a little bit because sometimes I make a few phone calls. But I'm not exaggerating by much. And usually there is like silence. They've never heard it before. And then I explained what I explained before, that if I need to do a lot of diligence, it's probably not obvious enough. And then they asked me about how do I manage all these companies? And how do I find time? And will I have time for new investments? And then I tell them another thing that shocks them. I tell them, I'm pretty sure that I'm the least hardworking VC on the planet. And usually, even if it's true, people do not advertise themselves and such. And it's true. And I show them my calendar and show them how empty it is, how much free time I have. So let me give you a couple of examples why sometimes being lazy is.
28:39 Speaker 02 First of all, I don't subscribe to the work ethics of working hard. I subscribe to the idea of working smart. And so I don't think it's about the input. I think it's about the output. And here are some advantages. First of all, what I just shared with you, if I think it's gonna take a lot of work to convince myself that I want to do it, I just don't bother. If I filter meetings that I'm gonna take, it takes me 20 seconds to look at a deck and decide whether there is a chance more than 5% that I would want to pursue it or not. If it's less than 5% or 3%, I just don't think. I think the advantage of having so much free time is huge because for one thing, I'm super accessible to the founders. The founders, whenever they want to speak to me, immediately. And it's not just to speak immediately. In the worst case, it takes you two hours to get back home, but usually it's immediate. And it's not just to speak with me.
29:24 Speaker 02 It could be like if founder can ask to call me and ask me to come to the company right now to interview someone who's kind of like on the fence and help close them. And I would show up. In fifteen minutes and are also much more available to open doors for them and to help them with diligence of key hires and everything else. And part of the reason why I don't have partners is because I wanted to save all this time. It's such a time saver. To make all the decisions yourselves and not having to coordinate with anyone and not having any processes, et cetera. So overall, I think that because before I do anything, I ask myself, is this really necessary? Is this better use of my time than walk my dog right now or play a game with my daughter? Or have a hike with my wife or whatever it is. Usually the answer is no. So I just don't do it.
30:09 Speaker 02 So I think it actually helps me to be super efficient and super effective too.
30:13 Harry Stebbings? Yeah, no, absolutely. I totally agree and I see that perspective. I do want to move into my favorite though, Oren, which is the quickfire round. As you know, so I say a short statement, you give me your immediate thoughts. Are you ready to dive in?
30:23 Speaker 02 Sure, sure.
30:24 Harry Stebbings? So favorite book and why? What are you reading in the free time? What do you recommend we do?
30:28 Speaker 02 I don't know. I love biography. So one that comes to mind is a very long but very compelling biography of Churchill. And I think it's called The Last La- it's not particularly new, but it's called The Last Lion. And it's just fascinating because the guy was definitely very far from being flawless. He had a lot of personality flaws. And yet he was the right person for the right time. He was the wrong person in other times. He was a disaster before and after the war, but during the war he was the right person. And I think this brings home the notion that it's so context dependent. The same person in some contexts can be great in other. So I don't think we should think in terms of this guy is great and this guy is a loser because things are very context dependent.
31:10 Harry Stebbings? How do you feel about founder secondaries, Oren?
31:12 Speaker 02 Love it on multiple aspects. And I loved it before. Now it's more popular, but even when businesses hated it, I always loved it. First of all, I do not believe that founders are more hungry because they should be kept hungry. I just don't believe, you know, and really this is the motivation that you want from the founder, that you want them to be mission based. Not because they're angry and they are just driven by money. Number two, the fact that you let them take money off the table actually brings better alignment. Even a significant amount, even if it's five or 10 million, they're much more likely to try to hit for the fences and not take the first couple of hundred million. Dollar acquisition offer because they just cannot say no to a few tens of millions of dollars. When you have nothing, it's very difficult to say no and take the risk. If you already have something, you don't feel like you're in survival mode financially, then you're more aligned.
31:56 Speaker 02 Number three, I think generally speaking, secondary as an investor now. Many times the secondary opportunities are better as a buyer now I'm talking. Are better opportunities because the company doesn't even necessarily need the money. So, uh, anyway, all in all, love them and I try to proactively help the founders make it happen if they want to.
32:15 Harry Stebbings? What do you know now that you wish you'd known when you started your career in venture twenty five years ago, Oren?
32:20 Speaker 02 Oh, wow. Wow. So many things, so many things. Let me choose one. I think that the notion that it's all about the founder and my role is to be the best support system. But my role is not to know better than the founder. And I think early in my career, it was much more important to me to be the smart guy in the room and to have a say. Oftentimes, VCs talk about themselves as partners to the entrepreneurs and actually don't like the terminology. Because a partner implies that I have a say, he has a say, or she has a say. No, I think I'm more than a partner. I work for them, you know, I adore them, I work for them, you know, I cater to them. And at the end of the day, it's a decision and in my mind, they know better. I'm gonna give them my advice, but in the end, I'm totally not attached to whether or not they took it.
33:02 Speaker 02 And I think that maybe early in my career, I was more attached to whether or not the founder listened to me or not. Today, I'm not attached to it at all. So I think this is one lesson. And then it's really all about the founder and it's really all about how attractive you are to the founders. Because that will bring you the next deals, much more than who's the smartest person in the room.
33:19 Harry Stebbings? What would you most like to change about the world of venture? You're in the midst of it today. What would you most like to change about today's world of venture?
33:25 Speaker 02 Obviously, there is a lot of room to improve in terms of diversity and inclusion. There's no question about it. And I don't think it's necessarily a concerted effort to keep other groups out. But it's just, if there is no concerted effort to be inclusive, I think it's a natural thing that happens. Because people tend to continue to invest and hire people that are similar to them. So that's one thing. Which I think, by the way, is gonna happen over time. The other thing which I don't think is gonna happen over time, but I wish, you know, but this is more like a fantasy. I wish that it was always the nice people who would win and the assholes who would lose. Very often, it is the nice people who win, but not always. So I wish. But that's more of a wishful thing. That's not gonna happen.
34:04 Harry Stebbings? Tell me one that I'm really interested by. Why do you never announce your funds?
34:08 Speaker 02 I just don't think it's news, you know, I feel that, you know, whenever I can, I wanna raise, I'll raise. So to me, it's not news. To me, it's like, you know, I always will have money in my mind. So the fact that I have another fund to me is like no news. But I guess I could, you know, I just never bothered and don't care about. Look, I don't have any PR person. I don't enjoy doing it. So I just don't do any outreach. Yeah.
34:27 Harry Stebbings? Absolutely. It is an amazing total sense. And then final one, Oren. What's the most recently publicly announced investment? And why did you say yes and get so excited?
34:35 Speaker 02 I think the last new investment that I made a few months ago is a company called Traverse out of Israel. It's a woman founder, two founders, the CEO is a woman and super strong technically, both of them. And it's in the data infrastructure space. Now, the reason, and it's a seed, by the way, it's total seed deal. So I don't know how it's gonna play out. But what convinced me, and it was again, a very quick decision. There was very little to check, because there was nothing. It's an idea, is that she was the CTO and he was the VP R and D of a big analytics company. And basically, they are solving for a problem that they experienced themselves and that every company with a lot of data is experiencing. So I love it when founders solve for a problem they really understand
35:17 Speaker 02 extremely well, because they experienced the problem themselves. And I love it when you start with a very strong product and engineering foundation, because you can add the sales and marketing later. The opposite doesn't work. And I think that if you start with very strong technical people, then you have the best DNA from a technology standpoint, an engineering standpoint. And again, it's something that you cannot fix after the fact. And sales and marketing, you can build it three years down the road. By the way, Trip Ashen was the same thing. House was the same thing. Most of these companies were the same thing, that starting with a very, very strong technical foundation.
35:50 Harry Stebbings? Oren, as you know, listen, I always so love our discussions. So thank you so much for joining me today. And my word, there's so much to unpack here. So thank you.
35:57 Speaker 02 Thank you so much. It's been a pleasure.
36:01 Harry Stebbings? I mean such a fantastic guest and I just love the way that Orin really thinks and deconstructs the world of venture and how he operates within it. And if you'd like to see more from Orin, you can find him on Twitter at Orin Zev. Likewise, it'd be great to welcome you behind the scenes here. You can do so on Instagram at H Stabbings 1996 with two Bs. However, before we leave you today, I want to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on user experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. They raised a total of 16 million in funding and recently got acquired by Dropbox for an impressive $230 million. Check out HelloSign.com/20vc
36:44 Harry Stebbings? to join the thousands of companies and founders who value fast, secure and simple e-signatures. And speaking of incredible solutions to complex problems, the team over at Pendo, the product cloud company, is expanding rapidly throughout Europe and recently released a version of their product which is designed and priced specifically for startups. So no matter whether you're an operator or an investor in Europe or the US, Pendo has you and your portfolio's product covered, showing you how your product stacks up against your peers, analysing over a thousand software products and creating benchmarks for startups, scale-ups and enterprises across five different categories. And you can find out more today at pendo.io/products-benchmarks. That's pendo.io/products-benchmarks. And finally, I want to talk to you about Point.
37:29 Harry Stebbings? Point is a premium card, the first debit card with rewards from brands that you actually care about, like earn 5x on subscriptions like Spotify, 2x on all dining experiences, including food delivery apps like Postmates, and 1x on everything else. You're rewarded every time you spend and points are redeemed for cash. Instead of drawing up a credit line for rewards that aren't relevant, you can use Point Card and start getting a break on purchases with your favourite brands. And it's backed by the likes of Y Combinator and our dear friend from the show Jeff Morris Jr. They're revolutionising the way we spend. And listeners of 20VC have the exclusive opportunity to join Point's invite-only launch out of beta in July. Head
38:07 Harry Stebbings? over to getpoint.app/20vc for early access and a sneak peek at Point. As always, I so appreciate all your support and I can't wait to bring you a fantastic episode this coming Friday.
Previous 20VC: How Fundraising For Funds Has Changed in The World of COVID, The Benefits of Managers Selling Part of Their GP & How To Think Through Your “Minimum Viable Fund Size” with Lo Toney, Founding Managing Partner @ Plexo Capital Next 20VC: Biggest Lessons From Opendoor's Scaling Journey, How To Implement Systems for Growth & The Right Way To Structure Customer Discovery Processes with Julia DeWahl, Angel Investor Page updated October 26, 2026 · transcript and summary are machine-generated
