Uncapped #10 | David Tisch from BoxGroup

This week I enjoyed riffing with David Tisch, Managing Partner of BoxGroup. BoxGroup is an NYC-based seed stage venture capital firm that has invested in over 500 seed-stage startups over the last 15 years, including Plaid, Ro, Ramp, Clay, Scopely, Warp, Cursor, PillPack, Amplitude, Flatiron Health, Stripe, Warby Parker, Harry’s, Oscar, Flexport, Classpass, Vine, GroupMe, Airtable and more. David is the Chairman of GoodDog, a marketplace to find pets online. He is the co-founder of TechStars NYC and serves on the board of Friends of Hudson River Park. We covered: Scaling something deemed unscalable Art of being collaborative Taste not being teachable VC help being overrated Building a NYC brand --- Timestamps: (0:00) Intro (0:27) Scaling a collaborative fund (8:23) Stack ranking portfolios (11:29) Investing at seed (17:29) Hiring for taste (22:30) The art of being collaborative (29:03) VC help is overrated (41:38) Why VCs pass on companies (48:11) Building a brand in NYC (55:02) North Stars in early-stage investing --- Linktree: https://linktr.ee/uncappedpod Twitter: https://x.com/jaltma Email: [email protected]

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

• 0:00Speaker 00

  We don't want to be your best investor. We want to be your favorite investor. And favorite investor means you like us because we talk to you like humans and we don't mislead you. We ideally under promise and over deliver. So we would like to help. We just don't want to proclaim we're going to make your company great.

• 0:20Jack Altman?

  I'm really excited to be sitting down today with David Tisch of Box Group. David, thank you for making the time to do this.

• 0:24Speaker 00

  Jack, I'm thrilled to be here.

• 0:26Jack Altman?

  The thing I want to start with is that Box Group has sort of like defied a certain conventional wisdom, which is that VC funds, the general life cycle is you kind of start small. You're collaborative, you do seed. And then the way that you scale is you do bigger checks. You own more higher concentration. You go later stage and that's the typical model. In most cases, that's right. That's the arc that most have followed, but you haven't. And you've been really successful basically scaling up this thing that everybody thinks you can't scale up. And so I want to start with the way that you think about your model, how it works, the way you invest in companies and just like the shape of Box Group.

• 1:06Speaker 00

  Yeah, I think first off, like the word venture capital captures so many different types of businesses. So to me, there's like three stages of VC. There's seed, there's A and a little bit of series B. And then there's B and later. And B and later is a finance job for the most part that involves needing to win, but it is just plowing capital into things that are working and helping them scale. There is more of a financial orientation to the work that gets done there. And the people that do that work have a different lens into in terms of what they're looking for. So I don't believe I work in the same industry as most of those people.

• 1:48Speaker 00

  I think it's series A and B, there's still an art to it. The art is. Getting in front of companies, convincing the company to pick you and helping form the, the shape of whatever that narrative is going forward to get them to that capital point.

• 2:05Jack Altman?

  There's like this quip that like everybody in venture who invests a stage later than me is like a spreadsheet jockey and everybody who invested earlier than me is like throwing darts. It's like that.

• 2:13Speaker 00

  I'm a dart.

• 2:14Jack Altman?

  You're a dart thrower.

• 2:15Speaker 00

  I think that at seed, it's messy and I think you have to appreciate how messy your job is. And I think to your, to question, most people don't want to stay in that mess. That's not the passion. That's not the easiest place to play, right? It is easier to have a concentrated portfolio in the sense of if you're going to do two to three deals a year, you get to have a different filter for how you go about your job. I don't think it's easy in the sense of winning great deals, but I think it's an easier model to marry yourself to for a career. It's a bit more stable. I think seed is just a mess and I think it's a happy mess for me. I love doing this.

• 3:00Speaker 00

  This is a place that we like happily live at forever and we're not going to evolve. We're not going to change.

• 3:07Jack Altman?

  What do you think people are misunderstanding when they think that this model, like people got it wrong, obviously, because you did scale it. But like, what did people misunderstand when they're like, this doesn't like, in order to do a big fund successfully, you have to get out of, you know, collaborative seed, basically.

• 3:22Speaker 00

  I think, I think there's two parts to your question. One is like, why don't people stay here?

• 3:26Jack Altman?

  Yeah.

• 3:27Speaker 00

  And then two is like, why did you stay here? So I think the reason people don't stay here is it's hard to scale AUM and AUM is the thing that allows a venture firm to scale. It gives you more money in a fee stream. It gives you more scale to return more capital to make more money at its core. And then you like, on the other side of it, you don't, you're not as important in, in a true sense of that word, right? You're not sitting on a board. You don't like take credit for the company's success. You're just a seed investor. And I think the, to your point, like we like to look at the later stage investors as spreadsheet jockeys. I think people like to look at seed investors and write them off as like.

• 4:07Speaker 00

  Random. And I think that there's some tension in that dismissal of what happens at seed. To me, what we do at Box Group is we meet people at the beginning of their dream and we give them some money to help them achieve their dream. And there's like a romanticism to what I just said that is the art of why I love this, is you meet literally a person who has an idea and then five, seven, 15 years later, that idea is important and it's an important part of the world, it's an important part of an industry. And that narrative, that impact that that person goes out and creates, it's like amazing. And to watch that from

• 4:52Speaker 00

  the day one, to me, is very different than watching it from year two.

• 4:57Jack Altman?

  Why have you chosen to keep it in the sort of like collaborative, sort of smaller, medium check version instead of leading? Because obviously, if you wanted to, you could be doing that, like you have access to the founders, the capital, you've got a great team, but you've chosen structurally to not play it that way?

• 5:13Speaker 00

  I think what's most important is investing in the best companies. And if you have a business model that you are putting in front of the desire to invest in the best companies, you're going to have a conflict between those two things. So what does that mean? If I need to own a certain percentage of a company to invest, then it's pick me or the other firm that needs that percentage. And it's a like win or die model. And if at the core of what you want to do is help people achieve their dreams and invest in the best companies, the last thing that you have to, the thing you have to deprioritize

• 5:52Speaker 00

  is your like need of ownership and your need of model. So it's formulated, like the collaborative seed model is built off of the idea that we want to invest in the best companies. And if you just start there and you never remove that goal, the rest sort of forms around it. And I don't think when I started Box Group 15 years ago, We understood that this was the goal. This was how to scale. This was realistic. I think it was formed around, we want to have the ability to invest in the best companies. And that's never changed. And so why we've never changed the model is that's still the core goal is invest in the best companies.

• 6:33Jack Altman?

  I think also what it's connected to probably is when you invest smaller checks, obviously, the other part of the equation is you get to do a lot more of them. And that increases your odds that you hit these like mega outliers. And I think like, you know, everybody talks about, you know, the power law, but it's just still like shocking when you see how power law-y it is. And so I guess probably embedded in this is you do more companies, you're more likely to hit the ends of the power law.

• 6:56Speaker 00

  So I do think it's important to appreciate that going into an investment and at seed specifically, the majority of decisions you make as an investor will be wrong. On the other side of that, if you look at the stats, most startups will fail. Most venture-backed startups will fail. And there's a founder and a failure at the end of that that is not to be written off as just another number. There's somebody's dream and somebody's emotion and life that has failed and they need to restart. And what's awesome about today's ecosystem is those people typically get a second, third chance. And I think historically, they did it. And so I think we're in a better part where you can take risk as a founder,

• 7:41Speaker 00

  fail and have another opportunity. But as a VC, the idea that you can go in in a concentrated model and be like, these are the three things that I found that are going to work and be right is just unrealistic. And so our model is not built around, let's have as many shots on goal, if you will, as possible. It's built around, let's find the best set of companies in a given year, in a given month, in a given week. And if it crosses a bar, say yes. And it's this model of invest in a lot of companies is predicated on seeing a lot of great companies. So if we don't see enough exciting things in a given moment, we're not going to say yes enough.

• 8:22Jack Altman?

  One of the things I think about on this that I the maybe place to this is let's say you met a hundred companies and you had to the next day or that same day stack rank those hundred to the best your best possible guess of which one's going to be the most valuable to whatever then you're going to decide to cut off whether it's at ninety seven or at ninety three or eighty one like you know that's the bar where you're going to invest one of the things I often think about is I actually don't know with my trusting my own judgment on the ones that I said yes to versus the ones I liked a lot but just didn't I'm like I'm not convinced that I can pick between those baskets you just kind of do stuff at some point

• 9:00Speaker 00

  but I don't think most VCs at the series A and earlier stage can pick between the top twenty five the next to like each

• 9:07Jack Altman?

  yeah so that's my question basically is like where do you think that you can

• 9:10Speaker 00

  I don't I don't think that anybody can stack rank their portfolio properly early in a in a lifecycle of a company and I don't think there's like somebody who magically can see through the challenges of scaling a company to get that right I like it's a egotistical statement to claim that like you know the winner from the second that you see that I if if that was the case everybody would be incredibly concentrated and make limited bets but what happens in venture is people invest in a bunch of companies we invested more than other people but everybody invests in a basket of companies and then they go out and talk about the ones that work

• 9:53Jack Altman?

  yeah

• 9:53Speaker 00

  and they never talk about the ones that don't work and then they take credit for the ones that work and say how great they are and that just isn't the the behind the scenes process of building a venture firm and it's not the behind the scenes process of making investments in venture you're going to be wrong a lot and there's going to be things that you had immense conviction in going in there's going to be companies that you were really excited about one three five years in that just don't end up working or they don't end right from a from a return standpoint and those get swept under the rug and instead it's like here look at this new shiny object that I want you to focus on today and that attaches to the timeline

• 10:34Speaker 00

  In this industry, right? So if you fund something seven years ago, nobody remembers that. They're like able to refocus on the thing you funded yesterday because today AI matters and seven years ago it didn't. So the thing you did seven years ago gets erased and instead you can be like, look, I have a new thing, AI.

• 10:51Jack Altman?

  It's also funny. I mean, like, not to, not to like hype you up, but like, as I'm thinking about this, a couple of the companies that you're invested in that are doing great now, if you had to try to stack rank them like a year into investing in like Clay or Cursor, which are obviously really good now, but like for different reasons, it was like, there was like a pivot with Cursor and Clay took a long time and then they found it. And so it's like, not only do the good ones, you know, sometimes, like you said, it's a great company, but it doesn't end in a certain way, happens in the reverse, probably just as often. So the conclusion then, I guess, that you get to is you just have to do, you have to say yes past a bar, which then the obvious question is like, what's the bar?

• 11:29Speaker 00

  You have to find people that you are excited to invest in and that's it. And, and you hear the word people get talked about in our industry and back people, back founders, but that at the seed is actually the core of, of the job is to find people that you are excited to see what they're building, the future of, of their world. And this can apply to any space. So this isn't a market-driven decision. This is a person-driven decision. And I think when you get to series A, and when you get to series B, a lot of that framework is removed and replaced with market frameworks and traction and revenue and all these other things. But at seed, it's people.

• 12:11Speaker 00

  And when you look at a story like Clay, we were fortunate enough to meet Kareem 15, 14 years ago. I invested in his first company and Nicolai's. We were fortunate to back their second company in Clay and it's a seven-year overnight success that is just at the beginning of their journey. And I think outside of venture, a seven-year period is in, like, the end of a fund life in private equity, or it's like way past that. And so to appreciate these timelines is insane.

• 12:42Jack Altman?

  And they're not 10 years, they're, they're long.

• 12:44Speaker 00

  Right. And when you're backing somebody right out of college who's 22 and you talk about 15 years, 15 years ago for a college student is they were five.

• 12:53Jack Altman?

  Right.

• 12:53Speaker 00

  These are like insane timelines and they're very hard to articulate and have people appreciate from the outside, but that's what this job is. And so this job is being patient for a long period of time. And so back to your original question, like, why are we the same today as we are? Is because I think if we're constantly changing who we are, we misalign with founders. If they are signing up for a 15 year journey or a 10 year journey and we are constantly changing who we are as box group, suddenly by the time they have another question for us or they're doing something different, we're running a different business. And if we're writing huge checks, series B, and we previously did seed, like we've decoupled that relationship. And so to me, the promise that we make to founders is we will always

• 13:38Speaker 00

  be doing this and we will continue to support you from the position that we're in today.

• 13:43Jack Altman?

  I feel like this is probably one of the biggest differences between seed and growth investing, which is that like, to be good at seed, you have to genuinely just traffic in people and not markets. And I think this is like really hard for later stage investors to do. And it's like, I think that's easy to say, but then I think like, to actually invest in a person who you think is great, but working on something that you think is a really bad idea and to write that check anyway is just not something I think growth investors can do.

• 14:08Speaker 00

  It's hard. It's hard to invest in things that you truly think are bad ideas.

• 14:11Jack Altman?

  Will you do it? If you think someone's great and you're like, this idea is not going to work.

• 14:15Speaker 00

  But they have to be like the greatest.

• 14:17Jack Altman?

  Yeah.

• 14:17Speaker 00

  Right? So like on the scale of great to greatest, they like, if it's a idea where you're like, I don't want to invest in this idea.

• 14:23Jack Altman?

  Yeah.

• 14:24Speaker 00

  That person has to just be so obviously like that. You have like three, five, seven meetings a year where you get like butterflies and all tingly and you're like, oh my God, I can't believe I'm in front of this person.

• 14:36Jack Altman?

  Can you get that over Zoom or do you need to be in person?

• 14:38Speaker 00

  You can get that over Zoom.

• 14:39Jack Altman?

  Yeah.

• 14:39Speaker 00

  You can get that over Zoom really quickly too. Like

• 14:41Jack Altman?

  What makes it happen?

• 14:42Speaker 00

  The, the package, right? It's like, IQ and EQ and all the things that encompass those two words. To me, you're backing somebody like what we do is we meet somebody and we think, can this person lead a group of people? And a group of people is 100 people, 1,000 people. You think about the scaled tech companies today, there are tens of thousands of people that work there. And you're meeting somebody when it's just one, two people.

• 15:08Jack Altman?

  And you're trying to figure out, can this person lead 1,000 people?

• 15:10Speaker 00

  And that's a really hard, like, most people can't. And it's not just 1,000 people. Like, can you attract and lead 1,000 amazing people? Like, if you think about the talent wars that go on, you're competing for people who are outlier great at each discipline within a company. And the founder needs to be able to recruit, inspire and retain all of those people year after year and then grow the organization. And you meet somebody on Zoom and you're like, can you lead 1,000 people? And that's a really hard framework, but that's what we go in trying to imagine. And so it's, one is, can you lead people? Two is, is the thing you're going after important?

• 15:53Speaker 00

  Like, if everything you say is right, does this matter? Like, does it create something of importance? And importance in consumer, importance in enterprise, importance in developer tools, importance in healthcare, finance, bio are so different in terms of trying to understand, like, the scale of impact that you need to make. Right? In consumer, if you're important and you have 10 million people using your product, it probably isn't that important. You need to think in, like, insane numbers. So can you get hundreds of millions of people to care about what you're doing? Whereas in enterprise, it's can you, like, is your AOV in B2B sales big enough for this to matter?

• 16:36Speaker 00

  Or in bottoms up sales, can you get wide enough adoption? And then in healthcare, can you get partnerships? Or in fintech, can you break through, like, enormous walls to get into working with, like,

• 16:49Speaker 00

  Partners, or as they call them now, design partners.

• 16:52Jack Altman?

  Do you have anything to say about design partners as a term?

• 16:54Speaker 00

  I think it's a nice repurposing of like, uh, early customers and it's adore, it's like, it's softer.

• 16:59Jack Altman?

  It's nice.

• 17:00Speaker 00

  Yeah, it feels lovely.

• 17:01Jack Altman?

  It's like a forward deployed engineer or something like that. We've got all this whole basket of nice new terms.

• 17:04Speaker 00

  There, but design partner is my favorite.

• 17:06Jack Altman?

  And I like forward deploy. They're both, they're good.

• 17:08Speaker 00

  But like analyzing a founder in that context is to me, the, the, the core of seed investing, like great person working on something that if it works is interesting.

• 17:20Jack Altman?

  Okay. So that's like the core thing to be good at. You've got a team of what, eight or nine people? Everybody's out meeting a lot of companies. Do you think this craft is teachable? Do you think this is like a teachable taste or is this just, you gotta hire for it and then let people exercise? Like if this is like the thing that Box needs to be good at, is this hired for or is this taught?

• 17:41Speaker 00

  Hired for. Um, we need to just have great people at our organization and I feel fortunate. I've, uh, you know, a group of great partners, uh, that have, we've worked together for a long time. Um, you know, Greg, Nimi, Adam, uh, Claire, Adina, uh, and I've all worked together for a long time. And I think there's a consistency in a team that can build trust that, um, you work together better over time. And I think there's the other, like back to where we started this question, what happens at seed? A lot of the time it's a very small team and there's a lot of inconsistency and transitions within the team. People come, people leave, and I think that also can force people to build a different style firm.

• 18:23Speaker 00

  I think what's amazing about Box Group is we've all worked together for a long time and we really like working with each other.

• 18:29Jack Altman?

  You also need a lot of trust, I guess, in this model because you need people to be completely unafraid of losing money in this model. And so how do you do that? Cause I think that could be one of the things where, especially as you have people who are newer to venture or coming up, people don't want to lose money, you know, but like obviously.

• 18:44Speaker 00

  But we're all, we all live in, we're all wrong way more than we're right.

• 18:49Jack Altman?

  Yeah.

• 18:49Speaker 00

  And so you just have to accept being wrong. And what's interesting is if you build a team of people who are great, and even on the founder's side, if you're backing people who've almost. Never failed in their life, they are signing up for the probability of failing. And you you either embrace it or you're afraid of it. And either one of those is fine. You just have to accept risk because that's the core of the stage that you're playing at. If you are starting a company, you are taking on the biggest risk possible. You are saying, I am better at something than everybody else in the world and I'm going to go win. And you're probably not like on a probability numbers basis, you are probably not. But if you just believe that you can do it, you're taking on an enormous risk and you go for it.

• 19:33Speaker 00

  And as a as a seed investor, when you invest in a company, you have to accept that it probably won't work. And that's okay. It doesn't mean that it's always okay. And that's, I think, the the key. You have to make the right choices. And so in the course of a career or the course of an early career, you have to get better at that taste. So I don't think you can train for it. I don't think you can teach it.

• 19:58Jack Altman?

  Can you as most as learn it? Can somebody sit with you, see your taste and learn it?

• 20:02Speaker 00

  No, because I think taste, I think taste is everywhere, right? Like taste is the choices that you've made throughout your life around the people you surround yourself with, the types of things that you're interested in, the types of music or movies or like restaurants or food you like. Like taste is formed way wider than just within business models and venture. And I think that if you see enough reps in deals, if you see enough reps in life, you're going to form your taste. And and even when you build your team with somebody brand new to venture, you assume they're coming in with a bunch of formulations on what they like and don't like. And so I think our job at Box Group as we grow organizationally

• 20:47Speaker 00

  is to find people whose taste we believe can scale and is is like worth us betting on. And so one of the one of the things that we do at Box Group is everybody at Box Group can make a decision. We don't have voting. We don't have a committee. We're not trying to do consensus investing. And what that means is the brand new person. At the firm who's maybe never done venture before can say yes to a deal. And the hope is it's our job to bring on people to the team that we believe in. And I think where VC to me gets weird is when you have team based consensus decisions or voting. There's an incentive structure that just breaks at some point inside of these big firms.

• 21:30Speaker 00

  And you hear about within the big firms, somebody nagging someone else's deal. Or I, I really love this deal, but I'm not sure I can get it through the firm. That feels like you're removing the, the essence of the job, which is somebody believing in something. And that's not like all the variables that are at play when you get into the big firms and the processes to get a deal done.

• 21:53Jack Altman?

  Yeah. I mean, like, I think once you get there, you're getting to a place where people are doing things for super non economic reasons and.

• 21:59Speaker 00

  And there's like political reasons, there's like job survival and there's job promotion reasons at play. And the founders are never really exposed to the like details of what's going on behind the scenes. But to me, back to like, again, the, the foundation of this conversation is like, why are we the same? It's because I don't want any of that to creep into Box Group. I want, at the end of the day, Box Group to be pure, aligned with founders. We want to meet people, give them money and try to help them build their dream.

• 22:30Jack Altman?

  Can you talk a little bit about like the, uh, the approach, like the art of being collaborative? Because I think this is something a lot of investors want to do. I think at this point in the market, a lot are definitely not collaborative, particularly. I can't think of other investors that are your size that are this collaborative. I don't know if there are examples, but you've been great at collaborating for like 15 years, which obviously helps translate into you seeing a ton of deals, which, you know, one of the things we didn't talk about is before you got to, you got to find all these amazing people, but you still have to meet them. And so this is all kind of related, but like, how do you think about being collaborative? And what's the mindset to do it well?

• 23:11Speaker 00

  Like, if you start with the first principle of our job is to help people achieve their dream, it's not to make us the most important factor in. And so it's just looking at each individual deal and figuring out what does that founder need and trying to help them do that. And inevitably, if you're building something of scale and importance, you're going to need more capital. And so we understood from the very beginning, even if we lead a pre-seed round, they're going to need follow-on capital. And within this ecosystem, everybody is constantly playing in different spaces. And so our view was, why not be great at helping people raise money? It's the only thing that everybody in our entire portfolio is going to need to do the same is get more money.

• 23:56Speaker 00

  So it's our responsibility from a help founder standpoint to know where that money lives and to help them achieve getting that money.

• 24:05Jack Altman?

  And have great relationships with them.

• 24:06Speaker 00

  Well, that's what it takes to help them, right? We have to build great relationships with the follow-on funding. And then what you have seen over the past 15 years is all of that follow-on funding that used to live in different stages comes all the way down to seed. And so at seed, you see firms that write series A, B, C checks also lead.

• 24:25Jack Altman?

  So now you're collaborating simultaneously in the seed with somebody who's also follow-on capital.

• 24:29Speaker 00

  Yeah. And so I just, again, when you're not building something that is directly competitive with anybody, you start building this network of relationships and those relationships compound over time. And as long as you aren't bothering people constantly with like, pick us, not them, it's instead pick us and them. I think you can build authentic relationships in this industry. So I don't think it means that we accept being bullied. I don't think it accepts us getting crammed down in every round. I think what we have to do is build currency of our own that we bring to the market such that the market appreciates the things that we find, the deals that we participate in before the market. And in return, we're

• 25:12Speaker 00

  going to hand companies to the rest of the market and hopefully they're appreciative and kind to us when we need that. And so I think there's a belief that.

• 25:25Speaker 00

  Great companies get built by great founders who are going to need capital at all different stages and our job is to help them get that capital.

• 25:35Jack Altman?

  It's funny because there's like no secret here. It's just like the only way to do this is to be in the game for years and years and years. It's like you can't just do this overnight. Like a new emerging manager who wants to become a large collaborative seed investor is going to need 10 or 20 years to build the depth here.

• 25:52Speaker 00

  I just think the way we've built our model is by being authentic to it and not forcing it. And so it's evolved into being able to talk about it in an easier way than I think actually executing it. And so I think there's a, like, being consistent at anything is harder than trying new things to me. It's like you have to stay disciplined and we've done the exact same style of investing for the 15 years that Box Group has been around. There have been nuanced changes in it. We've scaled as you said, but the style of how we've built our portfolio is the same. And the, the style of relationship that we build with founders is the exact same as it was 15 years ago.

• 26:37Jack Altman?

  I mean, I don't see why you couldn't keep scaling it as long as you had enough, as long as you could scale your team. I don't see why you couldn't keep, I mean, it's like YC has obviously proven that you can go unbelievably far with this. I don't know why you couldn't be three times bigger or something.

• 26:50Speaker 00

  I think YC is totally underappreciated and I think gets criticized because people feel threatened by it. But I think how they've proven scale at the earliest stage is one of the most amazing.

• 27:03Jack Altman?

  It's like unreal.

• 27:04Speaker 00

  It's, it's a, it's a magical machine.

• 27:06Jack Altman?

  Hundreds and hundreds of companies every year.

• 27:08Speaker 00

  But it's predicated on seeing them, right? So what YC, what, what people don't talk about is why YC works is the top of their funnel, the application pool and the pool that they're recruiting to join YC is so strong. So they're able to see like a, a application pool of thousands of fascinating opportunities and then they're amazing to pick.

• 27:31Jack Altman?

  And good taste.

• 27:31Speaker 00

  Right. And so you take this huge funnel and you filter way down. It's not that they're accepting a high acceptance rate. They're picking like an amazing batch and they're doing it over and over and over.

• 27:43Jack Altman?

  And now there's obviously enough brand signal that a good economic deal for YC is also a genuinely good deal for the founder.

• 27:50Speaker 00

  And the founders go in knowing how to be great within the confines of the YC opportunity. And they come out of it, taking advantage of the opportunity that YC afforded it. So I like YC to me is a generational firm inside of it. Looks different than everybody else, right? And it succeeded better than everybody that they competed with a long time ago. And I give them a ton of credit for just like out executing and staying consistent, right? And if you look at YC today, other than scale,

• 28:24Jack Altman?

  Yep.

• 28:24Speaker 00

  it's sort of the exact same thing it started.

• 28:26Jack Altman?

  Well, I actually, I talked to Gary about this on the podcast, which was basically it was a certain way when it got started. Then, you know, Sam, which was all really good, but Sam came in and there was a lot of new stuff. And now it's gone back to basics, but at a much grander scale. And it's actually kind of a great evolution that's happened.

• 28:42Speaker 00

  But the core of like the, the essence of the accelerator product really didn't change even when Sam, he was trying new things. And I think trying new things is important.

• 28:51Jack Altman?

  Yeah, and it helped grow the whole thing.

• 28:53Speaker 00

  Absolutely, but I, I think the core of YC's product was the same thing. And I think Gary's.

• 28:58Jack Altman?

  Yeah, I was in YC while all of that other stuff was happening and it was the same, I think, as it is now. You talked about helping companies and how like one of the things that you do is like, you know, help access to capital and it's horizontal. Everybody needs it. In general, I would love to hear the way you think about like VCs helping. You've had some like funny quips over time about like, you know, it's all ridiculous. I know you have more nuanced thoughts than that. Can you talk about like, is VC help overrated? Like, is there, are there things that you want to be doing? Like, I've seen the way Box works with companies, so I don't think, I think you guys do help companies a lot. But like, I'd love to hear your commentary just on like, how important is the actual helping?

• 29:35Speaker 00

  So I think it really comes down to like, what is the company? I think VCs, in order to like build their business, need to take credit for investing in companies. Not for building companies, but like to make themselves feel good and to make themselves feel deeper. I think you attach yourself to the best companies that you've invested in and try to identify, you know, buy the transit, transitive property of investing into those companies.

• 30:06Jack Altman?

  They're so good, I'm so good.

• 30:07Speaker 00

  Yeah, I did this, my companies, our companies. I find that weird and possessive.

• 30:12Jack Altman?

  I find it extremely frustrating, yeah.

• 30:14Speaker 00

  Like the. 50th employee at a great company is probably going to be way more impactful than like your second best investor.

• 30:23Jack Altman?

  The thing I, my, my mental model of like an unbelievable board member is like, basically, maybe they're as important as like one of the, you know, like a not top exec, but like a good exec at the later stages. Like that's my mental model. Yeah.

• 30:38Speaker 00

  Right. So at later stages, when a company is working, you can make a series of introductions, which is the main job of, of a VC at scale is to like,

• 30:46Jack Altman?

  network access.

• 30:46Speaker 00

  help companies get access to things and access to things can be money, access to things can be customer introductions, design partners.

• 30:54Jack Altman?

  Employees.

• 30:55Speaker 00

  Employees, yes. And within each of those, there's nuance, right? It's either opening the door or helping to, to close the deal through a relationship. So I think scaling a network of relationships is the most important way to add value at scale. I think there's a very narrow handful of VCs that are actually able to like help operationally. And I think everybody fancies themselves as that like.

• 31:22Jack Altman?

  Company builder.

• 31:23Speaker 00

  Person.

• 31:24Jack Altman?

  Yep.

• 31:24Speaker 00

  And there's like maybe five. And so to me, as you scale your company, the less VCs you have telling you what to do, and the more operators you're able to surround yourself with that are a stage or three ahead of you that can help you get advice as to how to continue to scale, I think the better. And so I, I don't believe that VCs are magical company builders. I don't think that VCs are able to magically make companies great. I think instead, VCs make a great investment and take credit for it.

• 31:59Jack Altman?

  Is this related to why you don't do like platform teams and have?

• 32:02Speaker 00

  Our job is to help the company. Like I am, I am the person that should provide the service. Box Group is built of investors and we have a back office team to like help run the fund.

• 32:16Jack Altman?

  But you could hire recruiters or other people.

• 32:19Speaker 00

  It's our job. My job is to build the relationship with the founder and to help do anything that. The founder asks in real time. So if a founder asks for something, we should try to do it and we should be able to do it. Or very quickly say, we can't do that because the worst thing you can do is distract the founder from what they need to go do to make their company successful. And I think when you have all this posturing of all the help you can do, you're you're going to distract a founder. And if you go look at second, third time founders, they don't want distractions from the outside. They know what to do. And so I think it's the first time founders that typically get tricked by the hand waving, here's all the value we're going to provide. And I think on the way in,

• 33:02Speaker 00

  and why this this is confusing is on the way into a pitch, when you're a founder and you have options to pick from a series of investors, everybody has the exact same pitch. We're going to give you money. We're going to take equity. The best pitch is like, we're going to give you more money and take less equity. So that's a really big factor.

• 33:20Jack Altman?

  Yep.

• 33:21Speaker 00

  And then after that, the differentiation is pick me, I am great. Or pick us, here's all the things we can do for you. And at the end of the day, like the differentiation of all the things we can do for you is not very real. So to me, what I would like people to pick Box Group for is they want to work with us. They like us. They hear great things about us. They talk to founders we worked with before who like us. We don't want to be your best investor. We want to be your favorite investor and favorite investor means you like us because we talk to you like humans and we don't mislead you. We ideally under promise and over deliver.

• 34:01Speaker 00

  So we would like to help. We just don't want to like proclaim, we're going to make your company great. It's not how it works.

• 34:08Jack Altman?

  I think in some cases, I think this is actually even more favorable than the truth. Like I think involvement in the wrong ways can be so actively damaging, like strategy advice from investors is so risky and can be so damaging.

• 34:24Speaker 00

  It's not only like wrong and damaging, it rattles a founder's mind to lose confidence. You again are back to this like core thing of you're taking risk to do something impossible. And the second that you get input from the outside that isn't helpful to your like focus and your mission.

• 34:41Jack Altman?

  Yes.

• 34:42Speaker 00

  You're screwed.

• 34:43Jack Altman?

  Right.

• 34:43Speaker 00

  And so to me, sometimes external insights or external course correction, if you're looking for it or you trust the the source of it. Can maybe be helpful, but if all you're getting is like inbound ideas, like the founder wakes up and goes to sleep thinking about their thing constantly. The investor has eight seconds during the day. We're like, oh, I have an idea. I'm gonna, I came up with a great idea.

• 35:09Jack Altman?

  I saw a competitor, I'm gonna send you a TechCrunch article.

• 35:10Speaker 00

  I'm gonna share my idea with this person who's obsessed with something.

• 35:14Jack Altman?

  And the person's gonna feel like my investor's doubting me. Now maybe you have to listen to them.

• 35:18Speaker 00

  And, and how do I pretend to care? How do I pretend to like, interact with that advice? But knowing that I am living and breathing this and that person has a diversified portfolio of other things that they are thinking about and external interests, like hobbies, because that's on brand. I think that's just, it's not helpful. And so my, I, I believe our job is to align with the founder and do what they ask us to do and don't do much more than that. And it doesn't mean that we aren't great at helping companies do certain things. Box Group is great at helping companies raise money because it's the only thing that every company we invest in needs to do.

• 35:59Speaker 00

  And I think that that is something that as a founder, you do need to be great at, but it's a foreign disconnected thing to operating. And so if we can make the external fundraising process easier and we could help you learn how to be great at it, that's a real needle that we can move. But the operations, what you are working on, your idea, how to execute your idea, if we know more than you, we shouldn't invest in your company.

• 36:25Jack Altman?

  Yep.

• 36:26Speaker 00

  And if you come in, we want to feel like you have an idea. You see the world differently. You have a 10, 15, 30 year vision. And we're like, here, go, go get them.

• 36:36Jack Altman?

  It could be kind of a hard thing to sell because what's interesting about it is I've watched Box help with this and it's like, you know, it's like really impressive, honestly, where because you have all these connections, people trust the brand, they trust the team. You're able to, I've seen you guys line up just like these ridiculous processes in parallel for people. But I would guess it's the type of thing that is hard to sell a founder on in a process sometimes.

• 37:02Speaker 00

  Totally. But I think the sale is hard because I, I think everybody else is selling. They're over promising and eventually under deliver.

• 37:13Jack Altman?

  The problem actually, as I'm thinking out loud about it is, I think about, let's say, not no names, but like a multi-stage at seed. If I think about them in your series A, all they can, for the most part, unless they themselves do the next round, kind of all they can do is hurt. I mean, directionally speaking, they either did the round themselves, or they didn't do it.

• 37:32Speaker 00

  I think signaling is the fakest word in venture.

• 37:35Jack Altman?

  Say more.

• 37:36Speaker 00

  There's just no, they're like, so if a great multi-stage firm funds your seed round.

• 37:40Jack Altman?

  Yeah.

• 37:40Speaker 00

  And another great multi-stage firm is interested in your A, what they're probably not doing is calling the one that did your seed. Are you going to do the A too?

• 37:49Jack Altman?

  I agree.

• 37:50Speaker 00

  They want to get ahead of the process. So they will likely try to build a relationship with the founder, potentially give an offer before the other multi-stage firm can react. So it creates this like preemption that happens. And I think in this market specifically, the speed of C to A, A to B, B to C is so fast that there's not this signaling risk. The only time signaling plays out is in a sort of bottom half of a portfolio. So if you are struggling and your existing investors aren't stepping up to help you continue, that is an external signal that is very real. But at the top part of the market, signaling just isn't relevant.

• 38:30Jack Altman?

  Well, I directionally agree, and I don't feel very strongly about signaling one way or another, because I think there's a lot of benefits from the great firm. But just to talk it out, like, I think there's clearly in the case where it's like, amazing firm A does, you know, your A or seed or whatever, the next amazing firm B comes and does the next one, and they're trying to swipe it from under them, obviously in those cases. I'm wondering if there are some medium cases where, you know, like we were talking about earlier, like a series A, it's not always yet super obvious that a company's working or not. And there's probably medium cases where something's going to be very good. And, you know, it's not quite gotten it landed yet.

• 39:06Speaker 00

  I think signaling has a positive effect in that if you have a great brand attached to your company, the probability of you raising the next round is higher. And so the signaling of that great brand participates. Pitting or not is secondary to that great brand being involved in your company. So if a top three to five VC, not a top 25, because there aren't 25 great brands.

• 39:31Jack Altman?

  Sequoia does it, it's probably always good because the.

• 39:33Speaker 00

  If Sequoia does your A, the probability of getting a B is way higher than if not Sequoia.

• 39:38Jack Altman?

  I agree.

• 39:39Speaker 00

  And so that's signaling to me in a positive way.

• 39:42Jack Altman?

  Yeah, basically the countervailing help of the fact that they invested at all weighs more.

• 39:47Speaker 00

  Venture capital is the only financial asset class where brand matters and brand is a real thing.

• 39:54Jack Altman?

  Actually, it's like one of the most helpful things VCs do. It's like in the top three or something.

• 39:57Speaker 00

  And brand matters with recruiting, brand matters with customers, brand matters with like a external thing, customer hire, partnership, believing in your longevity. Because if a great brand is attached to the company, the probability of it staying alive, which is the key to all startups is default alive and then successful is higher. And I think that back to YC, like YC is a great brand. There are a series of great brands within venture that matter.

• 40:25Jack Altman?

  But you're right. And YC is a good brand. It leads to you get a better seed round. It leads to you having higher likelihood to run more experiments and all the rest of it. And it actually leads to success.

• 40:32Speaker 00

  And it's not like, it's not an exclusive. So if you don't have a great brand, it doesn't mean you won't succeed. It is just more friction. It's more friction, right? It means that if you are a unknown entity coming from outside of the great brands attached to your company, you have to show more. And I think that that is hard for founders to appreciate is why did this company raise a round despite my progress and their progress apples to apples or I'm ahead of them? There's, there's like unfair leverage in reputation and brand that get attached to the narrative. And I think it's underrated, especially today to like create a narrative for your company

• 41:16Speaker 00

  that builds momentum and momentum does not equate to success. It equates to permission and permission is a, like you are a challenger. And if you are a challenger, the bigger gap that you can have between progress and permission. Is incredibly valuable. It gives you the ability to fulfill the promise easier.

• 41:38Jack Altman?

  I want to ask you about why you think VCs pass in erroneous ways. Like, obviously, you've seen a ton of deals, probably as many as anyone at Seed. What do you think are some of the wrong mindsets or bad frameworks or just wrong mentalities, let's say, that make people pass in companies?

• 41:59Speaker 00

  Well, I think when you ask a VC for why they are passing and you get a series of reasons, I typically think that is very lovely soundbites to make you feel better. I think at the end of the day, somebody is passing because it didn't cross the bar. It wasn't good enough. What isn't good enough? Most of the time, the team. And the VC feels that this team is not good enough for us to invest. Alongside of that, it's the market, the idea, isn't exciting enough for us to invest. So if you are working on something that isn't exciting in a market or isn't exciting as an idea,

• 42:41Speaker 00

  and you're not the, oh, my God, best team ever, that combination is going to be a no. If you are working on something that is obviously really interesting and obviously a fascinating market, and someone says, no, it's just team, and there's not much more to it, but nobody's going to send an email being like, I met you.

• 43:01Jack Altman?

  I mean, you probably never say that.

• 43:03Speaker 00

  You can't say that. It's not like, nobody wants to hear that. And it's not the job to be mean to somebody for the sake of being mean, but it's also like...

• 43:16Jack Altman?

  But that creates a weird issue, which is then you want to help and give useful feedback, but you have to say some other thing.

• 43:22Speaker 00

  We just, we try to be honest and like, this isn't for us. And that's not, and it doesn't mean that we're right. We are mostly wrong in most decisions we make. If we say yes, most of the things we say yes to will not work. And if we say no, a lot of the things that we say no to will work. And you have to accept...

• 43:40Jack Altman?

  That's the important thing, and people misread teams all the time.

• 43:42Speaker 00

  The time too. We, we continually 15 years in misread teams and I wish we didn't. I would love to never like miss a team, but we do. And in a market that's moving fast, sometimes you have 30 minutes to meet a team. And sometimes you have like three months to meet a team. And sometimes seeing a team too early is one of the easiest ways to misread a team. Because seeing something early and then seeing something a little bit later. Like, ah, I already made up my mind early. This wasn't good enough mistake. Yeah. And so I would love to not misread people. I would like, that's the, my paranoia is like, the person that I met yesterday is great and I didn't see that. Yeah.

• 44:25Speaker 00

  But I, I like, I mean, I think the, the common reasons that people say no are like, we misunderstood the market. We didn't like, the, the idea that anything is too early for a seed investor, I think is another fake answer. Nothing is too early. The market sometimes decides it's ready or not ready. Yeah. And it's not ready for funding if everybody says no. Or it's totally ready for funding if everybody says yes, or one person says yes. And I think the word too early is, is hard to use. You just want to see more because you don't understand the team enough. You don't understand their capabilities enough.

• 45:05Speaker 00

  And so too early is typically like, I would love to see more, but the market can counter that overnight. Yeah. So if you're like, I want to see more, but then they get three term sheets, suddenly you don't get to see more. And so the choice that a VC to me typically has to make consistently is you get to say yes, or you get to say no. And that's, there's not really a gray area anymore of like, I would like to wait three months and then please come back to me. And, and ask again. Unless you're multi-stage. Yeah, then you could just wait for the next round and the next round and the next round.

• 45:35Jack Altman?

  Yeah, which actually, I mean, this is a tangent, but there's a lot of incentive to do that, especially as these firms are growing. Conflict risk is like a bigger and bigger problem. And so you you're kind of incentivized to just like wait and pay up for the for sure winner. And almost the better the market is, in some ways, the more you want to do that.

• 45:54Speaker 00

  And you're seeing firms that used to be very disciplined about not doing that, doing that more consistently now of just chasing something that they missed.

• 46:02Jack Altman?

  Yeah.

• 46:02Speaker 00

  At a series C or a D, when traditionally they would never fund anything past series A.

• 46:08Jack Altman?

  Yeah, and the hopeful logic for that, I guess, is that things will be bigger than ever.

• 46:11Speaker 00

  Ever.

• 46:12Jack Altman?

  And so

• 46:12Speaker 00

  Most big ever.

• 46:13Jack Altman?

  Still gonna have trillion dollar companies all over the place.

• 46:15Speaker 00

  Like 15 years ago, the idea of a $10 billion company, I I saw a stat, right? It's like the 99th percentile exit today is 20 billion plus.

• 46:25Jack Altman?

  Which that seems crazy to me. I saw that too, and I was like, is that real?

• 46:28Speaker 00

  It's a big number.

• 46:28Jack Altman?

  That's a huge number.

• 46:29Speaker 00

  Right, but 99 is also a big number, right?

• 46:31Jack Altman?

  Yeah.

• 46:32Speaker 00

  95 is less big than 99. I did math.

• 46:35Jack Altman?

  I don't know if I agree with you, but that's probably right.

• 46:37Speaker 00

  But it used to be a billion, right? It used to, a billion was like a big enough outcome. And if it's now 20x that size to get to big enough, but you have companies, like if you look at the the public markets, and I think this gets underappreciated in in venture too, is the compounding at the end is so much more important than the compounding at the beginning.

• 46:57Jack Altman?

  Yeah.

• 46:58Speaker 00

  It is, it is way harder to get to, you know, zero to a billion dollars or zero to 10.

• 47:04Jack Altman?

  It's so much harder than like 20 to 30.

• 47:06Speaker 00

  Right.

• 47:06Jack Altman?

  There's 10 more billion dollars of value created.

• 47:08Speaker 00

  Correct, and for a for a VC that invested early, that turn.

• 47:12Jack Altman?

  Those 10 extra billion are worth just as much as that first extremely hard billion.

• 47:15Speaker 00

  Most of the time.

• 47:16Jack Altman?

  10 times, yeah.

• 47:17Speaker 00

  Right? You didn't math.

• 47:18Jack Altman?

  Can we do this off?

• 47:19Speaker 00

  But the end and like holding on to see the compounding, right? If you invested in, you know, Shopify as a VC, it went public at a billion dollar valuation.

• 47:31Jack Altman?

  Right.

• 47:31Speaker 00

  Today, Shopify is 120 billion dollar company.

• 47:34Jack Altman?

  It's crazy.

• 47:34Speaker 00

  In the public markets, it compounded 119.

• 47:37Jack Altman?

  Correct. It's crazy.

• 47:38Speaker 00

  That's a big act.

• 47:39Jack Altman?

  Yeah.

• 47:40Speaker 00

  And that's like the X you dream of as a early stage VC. That can happen in the public markets. If you look at Facebook today, when Facebook went public, it's up

• 47:48Jack Altman?

  A lot.

• 47:49Speaker 00

  over 10x as a public company. The compounding at the end in this market has shown that the winners can be way bigger than we had ever assumed as an early stage VC. So your hope in your career is that you are able to invest at the earliest stage in one of these incredible outlier companies. And then after that, you have a series of other really great companies.

• 48:11Jack Altman?

  You started Box like 15 years ago and you were in New York. And I guess you kind of must have started around the same time as Thrive. And so you, you two, I would say are like the New York firms, at least sort of, I guess I graduated a little bit right after that. And those are kind of the two firms, I think, that really made it in this latest generation that are New York based. And I'm curious to hear about the way you think about being there versus here. Obviously, one of your partners, my very close friend Greg, is here. And so you have a huge footprint here. But you're, you know, started in New York. You've got a certain New York DNA about you in a good way. And I think that probably propagates through the mindset of the, of the firm. But what has being in New York meant for you? And how do you think that impacts you?

• 48:57Speaker 00

  I think there's like our firm being in New York. And I think there's like the geography of where companies get started. And I don't think they're very related. Like we are in New York because that's where we live and that's where we want to live. And that's where we're from. And that's where we want to make our lives. I think it's important to not underestimate the value of the Bay Area for our industry. And historically, as a New York based fund, and I think Thrive is probably similar, the majority of our investments and the majority of our dollars have continually been in the Bay Area.

• 49:28Jack Altman?

  Yeah.

• 49:28Speaker 00

  So I think you like, the mistake would be to be like a New York firm that only invests in New York. It's not to underappreciate the value of building companies in New York, but it's would be cutting off like the head.

• 49:42Jack Altman?

  I would guess you don't even invest in New York at a much higher rate than anybody else.

• 49:45Speaker 00

  I think if you don't invest in the Bay Area, you are cutting off the majority of value. Historically in this industry and it is not like a neg to New York. New York to me is a place that people go to win. And I think the DNA of people that want to live in New York, that want to build in New York, are people that have like incredible ambition and tenacity and are not taking to me the easiest way. I think everything in New York is hard and harsh. And so you are fighting like friction every step of the way. And there are certain types of companies that make sense to build in New York. We're building in fintech, if we're building in in fashion or in ad tech, there's like a center to the the world you're building and that is in New York.

• 50:28Speaker 00

  But if you're building developer tools or you're building consumer tech and you're doing it in New York, you're doing that because you want to live in New York.

• 50:35Jack Altman?

  And you take slightly hard mode.

• 50:36Speaker 00

  Which is awesome, right? But now we're in a era of AI. And I think the the center of our universe has fully shifted back to San Francisco, where there is more depth of talent. It's not more talent. There are still great people in many different geographies. There are just more, more of it here. And to underappreciate that, I just think is a mistake. I think we have, as you said, Greg is out here. We are committed to being a firm that is in both coasts. And I think we equally will invest in other ecosystems. I think you can build a great company everywhere, but I think you can only build a certain amount of great companies in every location.

• 51:18Speaker 00

  I don't think your hometown of St. Louis is capable of having like a hundred great tech companies.

• 51:25Jack Altman?

  You don't know that.

• 51:25Speaker 00

  I do, but is probably capable of one, right? Or two or five.

• 51:29Jack Altman?

  Yeah.

• 51:30Speaker 00

  And I think depth is the thing that you're looking at in ecosystems and in cities to appreciate. And it's not just depth of starting, it's depth of scale. So, you know, can you get to a thousand people in almost every city? Probably. Can you get to a hundred? Definitely. Can you get to 10,000? In very few. And I think that's the the lens that I would look at sort of scaling with. And I think you see great companies today open up secondary offices quicker than you did historically.

• 51:59Jack Altman?

  I feel like you adopted a certain like West Coast tech bias where I've seen some other New York's, you know, HQ'd investors think more like New York investors. And I think it's great, actually. And I think both you and Thrive have like a smidge in a very healthy, valuable way of the New York mindset. But did you intentionally cultivate that? Or do you think that this difference isn't so real? Or do you just, yeah?

• 52:23Speaker 00

  I just, I, look, I, I think in, in New York, to me, the, the pedestal firm is Union Square Ventures. I think they were probably the most underappreciated best VC.

• 52:35Jack Altman?

  Like ever.

• 52:35Speaker 00

  Like, yeah, nobody.

• 52:36Jack Altman?

  Returns are like absurd.

• 52:37Speaker 00

  They don't get enough credit because they don't look for the same style of credit that the big multi-stage firms that are, are name brands have built. I think they are just excellent at what they do. And they do it and they do it over and over and over.

• 52:52Jack Altman?

  Can you say a little more about?

• 52:53Speaker 00

  They're, they're like, they're, they're the opposite of the multi-stage firm. They don't have FOMO. They operate.

• 52:59Jack Altman?

  They couldn't care less what other people are looking at.

• 53:00Speaker 00

  Correct. They like find the things they like and they lean in so hard to them and they got their first thesis like perfectly right. And then their next set of theses were good enough.

• 53:11Jack Altman?

  What was first, networks?

• 53:12Speaker 00

  It was just networks, right? The world, the world is tough. They had crypto, they had a, there was nuance after, but within the core of all the theses is this concept of network, which is this like catchall, but it's correct.

• 53:25Jack Altman?

  Yep.

• 53:26Speaker 00

  And they just, at the end of the day, like, why is a VC great? They fund great companies. And I think USV has funded great companies.

• 53:33Jack Altman?

  Early with lots of ownership and small funds. It's crazy.

• 53:36Speaker 00

  Constantly. And so I, I, with like, talking about VC in New York without pedestal-ing them,

• 53:41Jack Altman?

  Yeah, they're.

• 53:41Speaker 00

  I, I think is, is, you know, just not fair. I think we've always just discounted the idea that geography matters. I think geography matters for like, where do you want to live? And like, where do you want to build your life? And I think that allows you to get into a framework of being comfortable with the things outside of work. So you can be great at work. And so I don't want to live in San Francisco.

• 54:08Jack Altman?

  You don't like it?

• 54:09Speaker 00

  You can live here.

• 54:09Jack Altman?

  Dang.

• 54:10Speaker 00

  But I don't want to live here. I want to live in New York. I love New York. And I also don't care about funding people in San Francisco. I think we have an appreciation that like we fund software. The majority of software businesses historically were started in the Bay Area. And you can't just eliminate that. And so back to like not chopping off the head.

• 54:32Jack Altman?

  Yeah.

• 54:33Speaker 00

  From Box Group One, which was 2010 through 13, the majority of companies in that fund were in the Bay Area. And we saw companies that we funded in New York move to the Bay Area. So we funded Plaid. They started in New York, moved to the Bay Area, started to scale here. And I think that is just a natural tendency to find the depth, the talent that you need to scale a company.

• 54:54Jack Altman?

  Final question I have.

• 54:55Speaker 00

  This is it?

• 54:56Jack Altman?

  Well, we can keep going, but I know you got to go to your next thing. You're a very important person.

• 54:59Speaker 00

  I have nothing to do.

• 55:00Jack Altman?

  We can cancel it, but keep going. In a lot of ways, you're, I would say, slightly like laissez faire in your opinions about a lot of parts of venture and tech. Meaning like, I've seen you talk about how like the market price is the market price and like, don't whine. It just is what it is and like, stop talking about it. Or what we talked about earlier that like, it's like pretty unknowable what's going to be good early. So just like, you need a big basket. Or like, don't try to big brain a market, like you are not very likely to understand it. So there's a lot of that. And I think in general, that's been like a superpower for you. But I guess my, my last question is like, what are the one or two things that you do hold as like strong North Stars?

• 55:40Jack Altman?

  Because, you know, even though like the, the front is sometimes like, oh, it's all unknowable. Like you do, I know, believe certain things to have built what you've built. And so like, what are those? What are the couple or the one North Star for you that you do hold on to pretty closely?

• 55:55Speaker 00

  I think the most important thing is to build a team that you have implicit trust and belief and probably assume is way better than you. So when I look at my partners, I feel privileged to get to work with them, but.

• 56:10Jack Altman?

  They are much better than you, actually.

• 56:11Speaker 00

  I agree. But, but equally excited that like, they are going to make great decisions that I never could. Have made because they are amazing at this job. And my job is to like get convince them to work with me and make everybody happy. I think Box Group is a place where we all like want to work with each other. And I think that that in venture is incredibly rare. Like there are not very many firms where at the core, people do actually enjoy each other.

• 56:47Jack Altman?

  Yeah, you guys do, yeah.

• 56:48Speaker 00

  That's like, step one is like happiness, but more importantly, it's like be great at the job. And I think that that's why we're happy is we all look at each other and believe that that person is individually great at what they do. And so if that's Greg, your best friend.

• 57:06Jack Altman?

  Best friend.

• 57:06Speaker 00

  If it's Nimi, Adam, Claire, Adina on our team. And then we have a group of people that are earlier in their career that are growing. Our hope is that we all like each other, we all enjoy each other, we all want to do this together. And I think the other thing is you have to shoot for huge ambitious investments. And so it's not that we're outthinking the market. It's the or have some magical theses on certain markets. It's that you have to understand, can this get big? And big is so big, it's irrational. Again, back to like, you're meeting a person and can that person hire, inspire and manage? A thousand great people, 10,000 great people.

• 57:49Speaker 00

  Because when you get to 10,000 from, from two or four or one, you've funded something important and big. And big is the only way that the math in venture works. And what's cool, you see a founder start, you see a founder build and you see a founder sell for a hundred million dollars, for 200 million dollars. These are life changing outcomes for humans. Like the, the people that started those companies are changing their lives. And in venture, those things get written off sometimes as like not important. And I don't think that's fair. It is incredibly important to the people behind those companies for what it Did for their life, for their family's life, for their like ambition, it achieved it.

• 58:34Speaker 00

  At the same time, the venture math doesn't get driven by those outcomes. And that's a real decoupling of like VCs talking in these crazy numbers. And the founders behind them having life-changing outcomes at different scale. You have to like, on one hand, deeply appreciate the outcome of success at any scale, because that changes somebody's life. And I do find our job, when you align with somebody's dream, if they've achieved it, is incredibly like emotionally meaningful. The amount of friends that I've made through investing in their company, and they had an outcome that wasn't a hundred billion dollar outcome,

• 59:15Speaker 00

  but they saved, they like won, and they made enough money, and they had enough success to fully change their lives. Like, that's the like heart of this business, is to see people's lives changed. I think at the exact same time to build a great venture firm, you have to get lucky and find that that huge outcome. So I think going in, the thing we hold to is like, can you squint and see this being one of the most important companies in the world? Or in a more realistic way, in the industry that they're going after?

• 59:48Jack Altman?

  It's an incredible answer. David, thanks for doing this. This is me.

• 59:50Speaker 00

  Thanks for having me.

• 59:51Jack Altman?

  Real treat.