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VENTURE CAPITAL & PRIVATE INVESTING
Recorded: Sept. 25, 2025 Duration: 1:02:03Space Recording
Short Summary
In a recent discussion, venture capital experts explored the evolving landscape of startup funding, emphasizing the importance of strategic partnerships and community engagement. Key insights revealed a growing trend of local events connecting founders with investors, while also highlighting the critical knowledge gaps many founders face in the fundraising process.
Full Transcription
Thank you. Music Thank you. Good afternoon, everyone.
How's it going?
It is always great to be here on Spaces with the whole Wolf crew, the VC crew, and we have
amazing conversation going on today.
And we are happy to dive into it as usual i highly
recommend those of you that are already in the room as we're trying to pull up the speakers and
so forth get this thing rolling to send out your invitations share it to your friends retweet it
really helps out the space get the conversation rolling because at the end of the day we have some
very big brains qualified people sharing their sharing what they know with the audience.
And it really does help to get people into the conversation.
It helps to get better spaces and so forth going on.
But I'll kick it over to you.
I believe Kyle is up here, if I'm not mistaken.
How are you doing today?
Hey, hey, this is Jared here.
My co-host Kyle is working on a presentation right now. He's over in
Asia, getting ready to give a presentation tomorrow on their stock exchange floor. So
he's busy making deals happen right now in real time. I believe it's like three in the morning
there and he's still working on his keynote for his speech tomorrow and wrapping that up.
So just me today, but we're here every Thursday, 5 p.m. Eastern, talking the latest in venture
capital and private equity.
We'll talk different niches, different topics, just whatever's going on in that world.
We're also bringing up hot takes every week we have on different speakers.
Some faces you might recognize.
I know Matt sent you a speaker invite if you want to hop up here. Matt's been on here the last few
weeks. And then we also bring on new guests so we can get some new opinions and new thoughts and
hear from different experts in different spaces. And so this week we also have Chris joining us. So excited to hear
from Chris. And so myself personally, my name is Jared. I go by self-taught success on the internet.
And the meaning of that is all the information you are looking for is out there. It's just up
to you to seek it out, find it, learn from it, and then go apply it on the path to your goals.
And so that's kind of the point of this show is to bring that information straight to you
to get to hear from different experts
and learn from them.
So that way you can go apply it on your journey.
And my connection to the VC space
is more on the marketing side.
I work with founders and startups
anywhere from pre-seed, pre-revenue,
all the way up to publicly traded companies.
And what I do is I help them grow their brands on X.
So we've been able to help those companies
and those founders generate
over three and a half million followers,
over a billion and a half impressions here on X.
And the idea behind that is with a larger audience,
you can market to more people and make more money.
And so that's been a huge benefit for our clients
and we've helped them do that.
So that's kind of my connection to the VC space.
I'm more of the moderator role. My other co-host, like I mentioned, he's out in Asia doing deals
right now, so he's not able to join us, but he's more in the thick of the actual VC,
you know, investing. He runs family office. He's raised money for his startups. He's invested in
a ton of different companies. So he's got his hand in about every area you can be
in the VCPE world so we have a nice little blend back and forth but he'll be joining us back when
we have our next show October 9th we'll be off next week so that's a little intro to the show
and with that I want to welcome our speakers We'll start with Matt and then we'll
go to Chris. If you guys just want to give a quick hello, who you are and your connection
to the VC space, that would be awesome. Thanks. Yeah, sure. I am in an elevator right now. So
I hope you all can hear me. I'll be out in a second. I am going to talk like you can hear me. So my name is Matt Sherman.
I'm based in Phoenix, Arizona.
I am a startup scout.
I started investing in companies about two years ago.
And my specialty is all things early estate news.
So pre-seed and seed.
I'm out here in Phoenix.
So oftentimes what I do is I find founders that I think if they were plopped in the middle of the Bay Area, they'd be successful.
But because they're not in the Bay Area, they're not able to raise or be successful.
So I find these founders.
I scout for Bay Area funds to connect those funds with these founders and help them find success.
I've helped dozens of companies raise tens of millions of dollars.
And I just started investing that for the last couple of years.
And that's been a lot of fun and great to be here.
Awesome. We're glad to have here. Awesome.
We're glad to have you, Matt.
And real quick, I think I asked you this last week, but just a refresher.
When you help those founders raise, do you have them move out into those cities?
Or can they stay, like if they're based in Ohio, can they stay in Ohio or do you have them move?
Yeah, well, so it's whatever is best for the founder.
Depending on their circumstances, it can make sense for them to stay where they're at.
They're definitely able to raise money from wherever they live as long as their entity is formed in the correct way.
With that said, if they're young, they don't have many routes to where they live, and there's no good reason not to move to SS,
I generally suggest moving if they're trying to raise money and do the
thing. Absolutely. I know I've said it before on the show, but it is always interesting to me how
the majority of the people I talk to in the founder world, in the VC world, are all based on
the coast, whether that's East Coast or West Coast. it seems like everybody's in the Bay Area, that San Francisco area, or in New York.
And then Kyle's based in Miami, but he's still there on the East Coast.
So it is just an interesting observation.
But Chris, I'll welcome you to the show and let you give your quick intro here.
Hey, what's up, people? I'm Chris. I'm actually out here in Seattle, and I'm connected in Bellevue. I do a lot of interviews with venture capitalists and angel investors, and it's just insane the stuff that I'm learning. And I'm kind of like, I do close to what Matt does, but I'm like super hands on with local events and workshops and stuff like that. And using the podcast has been just
incredible for connections with a lot of founders. So it's just, it's incredible in this area. So
because it's so close to San Francisco, it's kind of like a really good leverage point for me.
And I have a travel podcast studio. So I pretty
much do what I do everywhere on the coast, like you mentioned. That's awesome. And Chris, I'm more
on the social media side as well. So I'm definitely interested to hear more about the podcast side of
that. When you're doing that, are you only doing people you're working with? Are you just interviewing
any founder you find interesting? As far as finding those founders to come on your podcast, what does that kind of look
like? And then follow-up question to that, what is the, I guess, the most similar takeaway that
you find from the founders that are successful and the founders who aren't when you're talking to them on your show.
So I kind of work with the founders who either are raising in the process of raising or the ones who have already raised recently.
And some of this comes from the, you know, the investors. It could be some of their portfolio companies who are looking to raise again.
And then there are times where
it's a founder who I think is interesting, who's building something who I know is going to
be successful. And I connect them with a investor in my network. So it kind of is twofold there.
And something that I've been really capturing recently is that a lot of founders just,
there's so many gaps in terms of knowledge when it comes to raising and
what they should do and how it works. Like we know online, it's a lot of information about pitch decks
and all of that stuff, but anything past that, a lot of founders just kind of lost. So being able
to take the information from investors and give it to the founders has just been super, super
helpful, man. And that really closes the gap for the founders who are in pre-seed or in their seed rounds
and they're trying to raise.
Closing that gap has just been super fun recently.
So what do you think is the most common gap
that these first-time founders
that are going through the raise for the first time,
they put together a deck, it looks all good,
then they go to raise money and they're like,
oh, now I actually have to get people to give me money.
Maybe this is a little harder than just putting together a colorful deck.
What do you see as the biggest learning curve that those first-time founders have to go through?
It's definitely their story.
Most founders don't think about the story they have to tell about themselves or their company.
They just want to shoot off details about the numbers, if they have traction, how many users
they have. If they've raised, they'll talk about that, which is not bad. But a lot of times the
investors are looking to invest in the founder because this is a long game, man. They're looking
at 10 years of working with you. They're looking at 10 years of updates. And if you're going to go to unicorn status or a hundred million plus, whatever it is, they're trying to invest in you as a person.
So if you just come in talking about the numbers and stuff and you don't give any of your personality,
any domain expertise, even about your team, if it's just strictly numbers,
if it's just strictly numbers, then it's the easy way to get overlooked.
then it's the easy way to get overlooked.
Last week, we talked a lot about, maybe it was two weeks ago, but I was pretty sure Matt was
here with us, but we talked about, you know, how important it is that when you're investing in a
startup, you're investing in the founder, more so a lot of times than the company. And, you know,
the company can be great, but if the founder's not giving you than the company. And, you know, the company can be great, but if
the founder's not giving you the right vibe, then, you know, you back out. So that definitely ties
into that for sure. So Matt, I didn't know, do you want to chime in? Is there anything that
you want to add to that part of the conversation as far as, you know, first-time founders, you know, some of the hard lessons they have to learn with the learning curve?
Yeah, sure.
So, I mean, I agree with everything Chris is saying.
I mean, he's touching on things that not many people touch on.
Like he says, it's way more than the deck, way more.
It's a lot of the implicit rules of raising that are not talked about. I think what I'll add on is a lot of founders underestimate how the networking game and how they may send a bunch
of cold emails and they think that's sufficient. But in reality, if they can, they shouldn't send
a single cold email and figure out how to get intros. Now, if I was like five years ago,
if I heard myself saying that, I would like to touch myself in the face because I always hated
when people told me to not cold email, just get intros. But now I'm
on the other side. I understand why social capital works, how it works. And cold emails are not just
neutral. They actually can be negative to someone's raising prospects. Again, it's much harder to get
an intro. But if you take the time to learn the game, the game rewards you. If you try to rush
past how the game works, then the game will punish you. And that's kind of what I've learned in my
time doing this.
Matt, that's an interesting take.
We hear cold email, but I don't know if I've heard somebody as far as on the VC side talk about how the cold outreach can actually work against you.
But I guess some people would say, well, if it works against me, I'm right back where I started. The only thing is that years down the line, when you try to get that intro,
you might be starting off on a bad foot.
But I personally would think that so many of those people get so many pitches
and so many emails that maybe they forget about it, maybe not.
I don't know.
But that's kind of my take.
that's kind of my take. Chris, do you have any thoughts on that cold email side?
Chris, do you have any thoughts on that cold email side?
You know, what's hilarious is one investor I work with a lot, Ron Werner out in Bellevue,
I've literally sat there with him and he's shown me his LinkedIn profile and how many cold
outreaches he gets on there. He doesn't even answer. He completely ignores everybody. And to see him as the investor
who's put millions of dollars into founders, businesses, and companies and stuff,
just scroll through and ignore everybody. It doesn't matter how good the cold pitch is.
If he doesn't see a face up there that's like, oh, I know this person, or we met at an event
or something like that, the message is completely ignored. And one of the breakthroughs that I did that I think a personal touch is if you do go to LinkedIn,
you want to find connections who are connected to the investor that you want to work with
and connect with those people first. Start a casual conversation, talk about whatever it is.
Don't go in there hard trying to pitch your idea to them.
Just build that connection with them first so they will be willing to give you
a intro to the investor you want to work with. It's a much longer, more grueling process,
but this is what I've literally done myself to connect with all of these investors. It's the
exact process I personally use every day. I talked to another VC
yesterday about something that I'm working on. And that's the process is the warmer connections
through other connections. The funny thing is you create a flywheel when you do it the right way,
because even if they can't help you, they'll send you to somebody who can.
the investor world can be pretty welcoming in that way.
The investor world can be pretty welcoming in that way.
That's a, that's a great point, Chris.
One thing that I see a lot on Twitter or here on X and, you know,
with what I do of helping founders grow their brand is a huge part of that is
who follows them. Like when there's mutuals that are following,
same way that you mentioned on LinkedIn,
but if you click on like a tropics up here or Wolf's up here, like if you click on their profile and you see how many mutual followers you have, it's like an instant credibility.
Like I'm going to click on Wolf's profile right now.
And it says like three names plus 135 others that I follow, follow him.
You know, and I follow follow him.
You know, and I only follow like 330 or something people.
So the fact that over a third of my, the people that I follow follow him,
you know, it gives him instant credibility.
So I definitely think there's a lot of value in that 100%. So to follow up on the pitch deck side,
question that I don't think we've asked or talked about on this
show here, but you hear it on Shark Tank. You hear it. The guys like Mark Cuban talk about how
the amount of deals that actually go through on the show is probably around 40%.
Because once they get down and start looking at the numbers, start looking at the actual
bread and butter of what they're investing in, they find a lot of it's maybe not what they
thought. Or the founder was maybe telling a little bit of tall tale or how they said they
were going to generate this revenue was maybe a little bit of a stretch and they haven't actually generated it yet.
So in your guys' experience, do you see much, I guess, tall tales or essentially lies from founders, you know, when they put something on the pitch deck and it's like, you know, it's kind of true, but it's kind of not true.
it's kind of not true. It's kind of like what I always joke with my sister about for a guy who's
never actually had to put together a resume, but I always say I would put on my resume that I'm a
co-owner of the Green Bay Packers. It sounds way more impressive than it is. Technically,
it's true, but if you look at it, I paid $250 for a piece of paper to say I'm an owner
with voting rights, but no financial gain from it.
So basically what I'm saying there is, you know, that can relate to founders of
maybe stretching the truth a little bit. How much do you guys see of that? Is that common?
And then how are you able to, you know, identify that, you know, and kind of see through the weeds on that.
That's a good question. I think for me, the prerequisite to answer the question is you yourself need to know what you know and know what you don't know. So if a founder is
pitching me on, let's say, like it was just this was just earlier today, like a crypto Web3 type
product, like I know Web3 type product.
Like, I know that I'm not an expert in that space, and I know that I'm not even close.
So because of that, they might say various things that may seem like a reach.
I'll know to then make a list of those things and then ask someone who would know and get
their take, right?
Generally, if things are a reach, it's not a negative sign, but it tells me that they are either one, early and overly excited or two, they push the limits a bit.
But you essentially need to find out how much they push them and where they push them.
If it's a sector that I do understand or something I do understand, I always just ask for specifics.
Like if I'm very well versed in, let's say, you know, anything consumer or anything in ad sales.
That was my last job at product time.
I will ask specific questions.
And if they don't, if they're not crisp, if they don't answer with authority, if they keep throwing out high level words or buzzwords, I know that they're not just, you know, over exaggerating.
They also may be potentially incompetent.
If you're over exaggerating and you're competent, that's actually very interesting because that means you're going big.
You're going for a big opportunity and you have a good thing on your hands.
But I think the combo of over-exaggerating, stretching the truth and being incompetent or less competent than I'd like, that is dangerous.
And I generally stop the – I don't have another conversation until they prove to me that they're competent in what they're building.
So that's my framework.
Obviously there's many ways to look at this.
Definitely good, good thought process there.
I want to give Chris an opportunity to hop in here if he wants to or tropic, go for it.
Yeah. I'm just going to swap microphones here.
Cause I opened up the space, but I don't want to confuse the audience who are used to hearing Gob and Emp on the Wolf side.
But what I want to say really quick is a question, because since you threw up the fact that you do speak to crypto founders, do you find that a lot of them are more overly technical and not necessarily aware with the business side,
because I spend a lot of time on the crypto side and most people I speak with
do not seem to necessarily connect the tech to business.
So I was just wondering how that goes when they're raising funds.
Well, it's a double-edged sword.
So I asked the person who was pitching me, like, who are you usually talking to?
Crypto VCs or people like me?
And he says, you should talk to crypto VCs.
So it's like, great.
Well, I'm like an edge case where it's like,
it doesn't matter what I say
because they're usually talking to crypto VCs.
But in general, if someone's just trying to pitch general VCs,
yeah, they do a horrible job at bridging the tech
to the business use case.
People love talking about features and technology,
but why do I care? Why should I care? And why should millions and millions and millions of
people that are not currently in crypto care? I think they have a hard time doing that. So I
agree with your assessment. I do think that's a good point there. Sometimes what I've seen just in that sector is the people who understand it, they don't realize that they're probably like in the top three to one percent of people who actually understand this topic in the world.
you know, has been doing something successfully for a long time without that.
And it just sounds like absolute jargon.
So I've definitely seen some people on the crypto side miss
and their over-technicality of talking about the crypto
and not actually explaining, you know, where is the proper business model
as far as, you know, how this moves forward.
Chris, I don't know if you have anything you want to add on that.
Yeah, I think the way to kind of combat this, because this is something I've asked investors
about, is to have your domain authority on display.
Because if you do come in talking high technology or different things like that,
it's good to be able to show that you know what you're doing. So having some type of content,
that's why I think posting, even if it's short videos, man, it's just really good to kind of
show that you're in the space, you know what you're doing. If I were to raise right now for
something in podcasting, just for example, I've been doing my podcasting stuff for a decade.
I have videos and clips and pictures and stuff
from when I started back in 2015.
And so if you can show that kind of consistency
and that you've been focused in one area
for a very long time,
you build a lot of trust within the investor marketplace and all the people you
are connecting with. Chris, that's brilliant. The time aspect that you hit on there is a great
point because everything, there's timestamps, so it's easy to go back and see that. Even on YouTube
or on X, you can see how many posts somebody has made.
So if somebody has four videos or four posts versus they have 4,000, it's like, oh, okay.
This person's been at this for a little bit.
They have a lot of information to share, so they're probably pretty knowledgeable. One thing that I see myself with helping founders grow their brands on X is that same kind of social proof and authority of
if you have a large audience, if you're creating content to post to people, it's an immediate
credibility giver. When investors come to a profile and they see it as 40 followers versus
40,000, if you have 40,000 followers, you're probably interested at least to some point
that people want to follow you,
that they want to pay attention to what you're talking about,
that they care about what you're talking about,
that they care about your product
or that they're learning something.
So it's an instant credibility giver.
You know, that can really separate you from other people.
And it also shows traction.
But the time part that you threw in there
as well chris i think is a is a brilliant brilliant thing to add um leo if you've i
saw see your hand up if you want to chime in go for it thank you guys uh my name is leo hello
everyone i'm from startup boys community thank you for the kind work i just wanted to say i'm
creating a startup unicorn that's all for now if you're interested find them are open thanks
if you're investor i invite you thank you all right well if uh if leo if you want to join in
and share any insights um you know uh as far as, you know, the conversation, the topic, that would be
be all right, too. But I do want to bring up a topic, if you're able to, in our text chat there,
if you're able to pin that first tweet with Y Combinator that I sent earlier today,
if you're able to pin that here, that would be awesome. But I wanted to get your
guys' thoughts. We've talked a lot of AI on the channel. It's kind of a hot button buzzword.
And we've also talked about where are they coming up with these valuations? And are these companies
actually going to make money? And how are they going to make money? And are they actually going
to show profit? Because there's a lot of them right now that that's kind of a question mark that nobody really knows, but they're still getting
these mega, mega, mega massive valuations. And so we saw this week, NVIDIA invested, I think,
$100 billion into OpenAI. And it's kind of like all these companies, I know the video is publicly traded, but all these companies are kind of just investing back and forth between one of other where this company invests in this company and this company investing right back into them.
You know, it's kind of just like a circle of the people passing around money.
And, you know, so are they doing that just to show revenue?
You know, is there a use case?
You know, where do we see that?
So I wanted to get your guys' thoughts.
You know, Matt and Chris, if you guys had any thoughts on these companies kind of passing around revenue.
And I think the stat on the tweet said that.
Let me see if I can find that real quick.
Let me see if I can find that real quick.
90% of business-to-business YC companies have 50% of their revenue coming from other YC companies.
So if you guys want to chime in, I'd love to hear your thoughts on that and what your take is.
that and what your take is.
It's funny because it's kind of like, it's almost like a weird ecosystem they've created,
which obviously works and it shows why so many founders want to be a part of it.
But at the same time, I do think if you're on the outside looking in, it kind of looks
a little crazy.
Like if half their revenue and all, half the money is
coming from other companies, are they just feeding each other to say that they're feeding each other
or are they actually making money and becoming profitable? That's one area of venture capital
where I kind of understand the skepticism of it being like, I don't know, some weird pyramid or
Ponzi scheme or something like that. So when people have that criticism for it, I a hundred
percent understand because once you start to understand the numbers, it does look a little
crazy. But at the same time, a lot of these companies are impactful. They are helping the
world. They are changing things for a lot of people. It's not just founders getting rich.
So there are two sides to this one, man. This is really complex.
to this one man this is really complex yeah i've uh i think it that is yc's right to set up this
ecosystem and if a founder can get in the ecosystem and be a part of it that is that they should try
to do that and i think that the smart the best founders and the batch will understand
of the the downsides to this and will play the game,
but also play the right game as well and get real customers.
And I think at the end of the day, I'm going to say the very unpopular take, but I think
well, maybe it's not unpopular, I don't know.
But I think most founders that go through YSEE, they don't succeed.
That's not a surprise.
That's like a normal thing.
I think YSEE generally just pattern matches on who they pick. They look for certain backgrounds,
certain qualities, and it's an index. And they know that most of them are not going to work out.
So I feel that just like most of the founders that are relying on this are just not,
that are only relying on the selling to other founders and in breed, it will work out until
the market, the bubble pops just a little bit.
And I think it will pop a little bit.
I think it gets a little more real.
At the end of the day,
the best founders will know
not to rely only on YC companies
or else they will end up failing,
whether that's today or in five years.
But it's their right to do it
and power to YC for creating that system.
Well, that is a little bit of a hot take,
but I don't know if it is
because isn't that, you know,
that's kind of the whole basis of venture is, you know, that, you know, 90% of the startups you invest in is going to fail and 10% are going to do good.
And you hope of that 10%, one of them does super good to make up for the 90.
So I don't know if that's like a super hot take.
that's like a super hot take. Um, and maybe, you know, to, to add on to your point, the reason that,
um, you know, that revenue is coming from those other YC companies is because, uh, you know,
they are coming from, you know, that 10% of where that's kind of what's keeping them afloat. And,
you know, maybe it's just, uh, you know, they all kind of associate with each other. So they get to
know each other and know each other's companies, but it is interesting because there's a lot of needs of different businesses.
So the fact that 50% of those companies are able to, I guess, complement the others where there's actually a business need, that definitely is just an interesting stat that I found found here today.
In another news, we've talked obviously here on X a lot about Elon.
One of the things that, again, we've talked a lot about is AI.
Here's some some more news that that came out here this week is Elon mentioned that XAI is going to raise capital in the coming months.
We've seen a lot of Elon's companies raise capital here over the last few months.
Between merging X and merging XAI and raising the valuations, I know there is a conspiracy going around on the platform.
I know there's a conspiracy going around on the platform as far as Elon wants his 25% stake in Tesla, so he has more control with voting rights.
And so to do that, basically, he was whipping up companies and then raising valuations even higher and then just building one big conglomerate in the hopes that he would then merge that with Tesla.
And so I think part of that came out because they were going to merge XAI with Grok into the Tesla dashboard and people thought they might merge that.
Tesla dashboard and people thought they might merge that. But he did kind of debunk that theory.
And then today we saw XAI got the government contract from the White House as far as having
their XAI models available to the government. And I heard they're only selling it to them for 42
cents to pair with Elon's favorite number of 420 to each different agency.
So that's just a different news topic in the VC world that's recent with this week.
Chris, Matt, if you guys had any thoughts, you wanted to chime in on that or Elon, feel welcome.
Otherwise, we can move on to the next news topic.
Yeah, Tropic, go for it. Yeah, I think Elon's just an interesting person as far as what he's doing on all these fronts. And one of the interesting things, of course, obviously,
we're on the platform right now. So, you know, we're helping to train it and so forth. But
I find it really interesting at the scale and its speed at which he moves and
everything he does. And I find that really interesting. And that's one thing that I see
very different with, say, these big public companies and so forth. Even when I watched
the one-hour video on the Memphis facility where Grok's brain is, basically, it's the size of an
airport. And he put this thing up up like basically overnight generating powers with turbines and all of these things and it was done so quickly i don't
know anywhere on earth or any person that could have done what he did so quickly and i i just
find it absolutely amazing the ability to balance all these companies and raise funds at the same
time i don't know how he does it obviously he has mastered the game you're talking about knowing
the game he knows what he's doing 100 so nothing else, I would say those of us that are trying to learn, just watch. Even if you don't necessarily agree with how he does things, he's definitely playing the game in an interesting way.
and bullish on Elon and think he's incredible.
If you want to look at the top of the scoreboard,
I just pinned another post,
which is an interview that Mark Andreessen did here,
I think over the last week,
talking about why Elon is the greatest entrepreneur
of our lifetime and why he is.
And part of that, like you said,
is just the speed at which he is able to execute and that he moves and that how he delegates tasks and how if he needs something done because he is so smart.
It's not like Elon is taking the problem to a director and then going to solve that problem with them.
Elon breaks down every day. What is the most difficult task that needs to get done today? And then it goes directly to the person who fixes that problem, and then
they fix it together. And so Andreessen talks about how Elon is just so incredibly smart because
he knows how to fix every problem in every department and every one of his companies.
And that's really the part that separates him from literally everybody else, you know,
over the last hundred years and why he's able to,
I think right now he has like seven
multi-billion dollar companies.
You know, if most people in their lifetime,
if you're even to create, you know,
one company of that magnitude
or one company a 10th of that magnitude,
you know, you're probably set up for multi, multi-generational
wealth. And here we have Elon, who has founded, I think, seven companies that have multi-billion
dollar valuations. So incredibly impressive, incredibly impressive the speed he moves at.
And one thing I always think about too is like, I have the same amount of time every day as Elon
Musk does. It's just all about efficiencies at scale.
And that is true for every human on earth. And not saying we all have to be Elon Musk and be
worth half a trillion dollars, but when you think you're busy, there's somebody busier than you.
So anyways, that's just a thought. Another thing I wanted to bring up, a little bit of a hot take,
Another thing I wanted to bring up, a little bit of a hot take, and this one actually comes from our other co-host, Kyle, on the show.
And I just pinned that at the top of the space here if you want to check that out.
And I'll read it, what the post says.
The hard truth of fundraising, you need to be in person to close deals.
There's just nothing like hearing how quick someone's wit is when they're put on the spot.
Take your last expendable 5K and set up a roadshow.
It's worth way more than ad spend or another contractor.
So a little bit of a hot take.
There's a couple ways to go with that.
I wanted to give you guys a chance to respond.
And what are your thoughts on that?
That's a really good one because i asked ron about this um he runs an incubator where it's a two-year program for the founders that he works with and when people try to when founders try to
schedule those meetings to get funding like over zoom or something it's like an immediate denial
which is like it's crazy because i think a lot of founders think that that's easier and more
convenient but getting in person again it's that thing of telling your story, putting yourself in the
spotlight, putting your personal brand out there. Like I think Elon, one of the things he's kind of
shown me personally is that your personal brand as a founder is super important. Like the way you
just show up in the world and online virtually, you kind of have to have a presence about you that is commanding when you walk into a room, and not in the same way as everyone else, but in a way that's consistent with what it is that you want and what it is that you're doing.
So if you're trying to get funding over a Zoom call, if you're asking for millions of dollars, you're going to just, in a lot of situations, you sound crazy.
You have to get into the room.
One thing that I think has been super impressive, you know, my first few exposures, I guess
you could say to the VC world, there was a founder close to me and I'm from the Midwest.
from the Midwest. I think we were both around 23 or so at the time. And I just remember that guy
I think we were both around 23 or so at the time.
was flying to a new city. It seemed like every time I saw him or saw something, he was in a new
city flying, talking to an investor because basically he had the same approach that you
just talked about. Go there, shake the hand, talk to them, have the conversation. It's been a while since I've talked to them, but I know for a while they're doing
incredibly successful. So I do think there is something about, you know, getting in front of
people and being able to face the music. You know, you can hide on a Zoom call a little bit and,
you know, if it's scheduled for 30 minutes and you're on the other side of the world and you're
like, hey, I got to go, maybe I I gotta go, you know, maybe you don't,
but you have it out. But when you're in person, I mean, you're there, you know,
you're, you're, you're in the arena and you're kind of stuck there.
So I definitely think there's, there's value to that. Matt,
do you have any, anything you want to add?
Yeah. I mean, I think that it also allows you to kind of vibe like i think when you're when you're
on zoom it's an understood thing like you pitch they ask questions great we'll go back to you in
x amount of days but where's the emotions and i think investments are decided on with emotion
and then backed up with logic there's like some quote like that it's not mine but it's something
like that and i think that you're much more likely to get that emotional response from someone.
If you're, if you're vibing in person, then on a zoom.
And can you raise over zoom?
Absolutely.
Um, but in general, I think in person is going to be, it's going to be better, which again,
good back to why I suggest people, if they can go to a hub so that you have more chance
to spend time with people in, uh, in tech and have a high context.
Tropic go for it, man.
I have a question.
Those of you that are obviously in contact with a lot of these founders, especially first
time founders, do you think that this is a skill that's lacking, especially post COVID?
You know, just like how kids are lacking social skills.
Do you find that a lot of these first time founders are just relying too much on zoom and tech and all that stuff, then they weren't necessarily doing that as much before.
Chris, Matt, you guys got any thoughts on that?
I don't know. Yeah, go for it, Chris. Go for it.
Well, I think before it was something that was happening. Now I see more founders that are trying, like they're putting in effort.
But one thing I interviewed Dana Robinson, she helps founders with their pitches.
I interviewed Dana Robinson. She helps founders with their pitches. And it's not a fear. It's like,
when I talk to founders, I ask them about how often they get in front of the camera and record
content. And a lot of them just don't have the strategy. So they're scared to go in person
because they don't have a game plan for it. And I think that's what stops people more than
them not wanting to. So I think we have a lot of founders that are taking an action
and trying to. But if there's any like hurdles, I don't think this would be the biggest one.
I think the biggest one is like we talked about earlier with the code outreach and like the
research area. That's where the problems like actually start. Because if you get to the phase
where you have a connection and all of that, and know who you're talking to you got the warm intro getting to them should
be the easy part you know this is the easy part i think if you're mentally you're a little scared
to go and have that session in person i don't think that it's the path for you you know um but
i don't think we see as many founders just getting caught up on that. It's the earlier stuff we talked about.
Yeah, I agree.
One thing I would add, I don't necessarily know.
I want to clarify, and Chris, you might have a different opinion,
but based on what Chris said, I want to clarify.
I feel like there's a difference between being nervous and being scared.
If you're nervous going into a pitch, you're meeting with a big investor, you're meeting with somebody you've been trying to get a meeting with for a long time,
or your company getting this investment would be huge.
I think it's reasonable to be nervous.
But I think the scared part is you're scared because, you know, maybe you're not prepared or whatever it is.
But I feel like it should be as nervous as you are.
I feel like it should be exciting because, you know, it's it's you're meeting with somebody to to help you further out your dream, to help you further out your mission with your company.
And so that's just kind of my thought.
Chris, would you agree with that?
Yeah, yeah, I definitely agree. It's not, I guess I used the wrong word in terms of fear,
because I think the fear comes from the lack of preparation. I think it's like that with anything.
If you're not prepared, then that's when the nerves really pop up. Because if you're prepared,
when the nerves pop up, you just remind yourself, okay, this is a game plan. This is what I'm going to talk about.
This is a problem I'm solving. Here's a solution. Here's why you should invest now instead of in
five years. When you have that kind of game plan, you have those boxes checked.
And not from the perspective of you memorize your pitch deck, but you memorize those key points you
know the investors care about
and you know you're talking to an investor that is excited about the space you're in,
I think that that makes it easier to process things and remove that fear and that block
or even a nervousness. But I do agree that if you are nervous, that's a good thing, man.
But be confident, man. I'm telling you, that matters so much. I'm seeing it now, how important confidence is. It's like, I don't know,
maybe top five things in a founder you have to have is just that unwavering confidence and
belief in yourself. And as far as knowing your stuff, I kind of look at it as if, you know, the electricity or the Wi-Fi went out
and, you know, you couldn't show your pitch deck, you should be able to walk the investor through
the pitch deck, you know, basically equally the same. Obviously, you don't have the graphics,
but as far as the information, you know, the pitch deck is just more of the visual for them.
But as far as knowing the stuff, like what's on the pitch deck, you know, that should be, you know, stuff that you understand so well that you know,
so well, you know, all those numbers so well, because that is what you're doing every single
day. So I almost feel like it shouldn't have to be something that you sit and practice and
memorize because you should just know it because that's what you're doing anyways.
So that's kind of kind of my thoughts on
that. Just kind of moving on here. Next thing I wanted to bring up that I saw here this week is
I'm going to pin this post here in this space as well. And what it says is newly one in four
small business loan applicants walk away with nothing today.
Only 41% get the full amount that they asked for.
So that's kind of the stat behind that.
But my question that I had behind it, you know, that talks about getting a loan for your business.
Obviously, if you raise money, you know, you're giving away equity.
If you do a loan, you know, then you're going to pay it back. And so there's not equity
involved. But from you guys who are in it, who see it all the time, where do you see the benefit
is for the founder to look to raise money versus just go get a loan from a bank? Obviously,
there's some obvious pros and cons, but I would love to hear your
guys' thoughts on when should you do each of those? So one thing I've learned is
raising is for when you want to accelerate. If you've already got traction, you're already
getting results, you raise money so you can get to the outcomes faster. You can make more money
faster. The business loan is more of like if you're trying to get started, if you're trying to
get launched and stuff like that, like if you're trying to really get things going
and you don't have traction yet, you get the business loan. But the bigger investment of
raising from these different companies, you got to be accelerating because if you just go to them
with no traction, no results,
and you say, hey, I want a quarter million, half a million dollars, but you don't have any results
yet, they're going to look at you like, well, why? You haven't done anything. But if you go to a bank,
you might more easily get some money out of the bank to say, hey, look, I'm trying to get started.
Whereas if you already have traction, if you're like, hey, we're at X amount, MR, AR, whatever it is, and you say we want to accelerate to this level and this is how we're going to do it.
We need your funding to do this. That's how it really works.
And I think as a founder, you got to know which one is best for you.
If you haven't gotten any results or the results that you wanted in six months, a year, two years, raising isn't going to be the move. It's not going to
help you because you don't even know what you would do with the money. You're not getting
results yet. That business loan will be a lot more valuable for you because if you aren't getting
results and you work with an investor, they're going to be on you about getting results and
you just aren't ready for that. Matt, I'm going to ask a follow up and you can chime in on this follow up as well.
So how do you play the factor of, you know, you know, even even reaching out, you know,
to family and friends when first starting out, you know, and, you know, if you're getting a loan,
you're paying interest on that, which you're paying right away versus, you know, if you're getting a loan, you're paying interest on that, which you're paying right away, versus if you do equity, then you don't have to pay that back right away.
And so if you're not to cash flow yet, that can swing the pendulum a little bit as well.
Yeah, I mean, I think that there is a – unfortunately, there is a specific persona that is most likely to get funded at the idea stage.
And that's someone that went to Stanford or Harvard, that's someone that's technical,
that's someone that works with Stripe or Facebook, right? And the reason these people get funding
early is because they have the context. The investors assume they have the context and the
contact necessary to build a big thing. Now, I think if you if you're in this persona, go ahead and raise a free seed round.
If you're not in this persona, you have two options.
You can become, we can like try to become this persona
or you can, you know, look in the mirror and see see how investors
they evaluate you and then look at your options.
In general, I always think that like for most founders, raising money is not the best path.
They think if they just raise 500k, it gives them optionality, but that money is not free.
It comes with lots of streams attached that are not obvious when you get it.
They're more obvious the way you're standing the line when you've done nothing significant
with it.
So in general, yeah, I mean, you're not going to fog a founder down that wants to build a big
company and wants to raise money for it. They just have to learn in their own way.
So I think for me, it's like, if you're trying to build something big,
if you're trying to build something fast, trying to change something about the world,
you'd raise money. If you're trying to build a business and you're trying to build a good
situation for yourself, but not trying to impact that much more beyond yourself,
like, you know, you don't want to make a thousand employees lives. You don't want
to mint a thousand millionaires. You want to mint one millionaire, which is yourself, probably take
like a loan. That's like a simple, simple way to think about it.
One thing, you know, that, that sparks a question for me, Matt, is do you guys think investors raise money too soon or without need where maybe it builds their
company better? And I guess it kind of depends on what you're going for. Some people want the
bigger valuation. So it sounds more impressive when they go to start their next company or
whatever it is, but they dilute themselves so much by raising money.
Do you ever think that, you know, there comes a time where people are raising money
and they don't need to raise money and, you know, it actually works against them?
Almost every time.
Silicon Valley only is Silicon Valley because there are founders willing to raise money, period.
This is why, I don't know if you have this in your docket today, but why Combinator announced
that they're going to, I actually didn't look into it, but they're going to say, if you
want to finish school, but you still want to raise money from us, we'll say you can
raise money from us, but right after you finish school.
So they're going so early.
And I guess that's better than having people drop out for sure.
But in general, all of Silicon Valley is incentivized to get these founders as early as possible.
I can't hear him.
You can't hear me?
Can you guys hear Matt?
Yeah, I can hear him.
He's speaking, so I think it just might be a connection with you.
But yeah, we can hear him.
Yeah, I just
think the system
fails the founders. Can you guys hear Matt?
Can you hear me? Am I talking over Matt?
Yeah.
Can you hear me? Yeah, we can
definitely hear him. So what I'll do
just in case maybe you just can't hear me,
I'll send you.
Yeah, I'll send you a message.
I don't think he can hear us.
I'm going to drop you down.
Yeah.
I did see that thing you were talking about, Matt, though.
I saw that thing from Y Combinator.
I think it's such a double-edged sword
because on one hand, they are getting the founders
earlier, and it's good to see them get the funding,
but like you said with the dilutionution it's like so many founders end up giving up way too much of their
company because they raised too early at the wrong time they didn't know enough so many different
factors man oh this is like the the core of everything i do today and what i've done for
the last five years this is the this is like the underpinning, which is like I feel like the system takes on founders too early in their journey.
But the system doesn't take the fall.
It's always the founders.
It's always the founders.
The system will never take the fall for this.
And it's like something that I think a lot about.
That's a good point there, Matt. Sorry, everybody, for the technical difficulties. It wouldn't be a
spaces without some technical difficulties. So we almost made it eight minutes to go,
but it got us. It did get us. But Matt, you know, what you say there, it makes me think,
you know, there's no crying in the casino. You know, you walk into the casino, you know,
the odds are stacked against you. You kind of know
what you're going against. And kind of the same thing in the VC world where you know, I don't know
what the set is, 88% or something like that, of founders fail. And you know that going in and you
know when you go to raise money that there's a risk involved, but that's a risk you're willing
to take because you believe in what you're doing. I don't know. I don't, I don't, I don't know if I agree with that.
I think there's a large percentage of founders that skew on the younger end that don't,
don't know those things and are coerced by investors to take their money. Um, it's very,
if you have like a legend in the industry that tells you that you're smart and tells you that,
that you should raise money because you're really smart and you have a chance of building a big
company, you're going to, you're going to listen to that legend. You're going to take their money. I don't think that
legend also is incentivized to tell them all the downsides that come from doing that. So I agree
with you in general, but I definitely think there is a large percentage, let's say 25% of founders
that go funding specifically in the Bay Area that are not going in eyes wide open and were actually
sold something that maybe is not the same thing that they bought.
They were sold something else.
And maybe it's just my own experience, but I do think that there's a percentage that feel that way.
So then let me ask you, the follow-up on that would be those investing legends that maybe course them
into that before they're ready and invest in the company.
What do they get out of it?
Oh, well, they get an index. I mean, look at YC. I mean, YC is like the king of getting,
I mean, of course, it's not all young people. I know there are some 30, 40, 50-year-olds in YC,
but in general, I would say it's probably at least 50%, 25-year-old people are younger.
And they go to these colleges, they put on these events and they essentially
get all these kids to buy into what they're selling, which is good. Then they get a massive
index. And as long as a few of them do well, it doesn't matter what happens to the rest.
Now look, boohoo, I did YC and my company failed. And then, you know, like, what's the
worst that could happen? Like not much, we still have the YC network. But I don't think
I think, I think it's still not quite fair. I think that I think that it's this path is being chosen. Sorry, to answer
your question, what they get out of it is more options, the more opportunities to invest in
companies, and then and then more of a chance that one of them will hit. There's no downside,
except for the time and resources spent helping the founders, but they're a machine anyways.
So like, what's an extra 5, 10, 15 founders? They already are supporting 200, 300 per batch.
Maybe less actually these days, but they have four batches per year.
You get my point?
Yeah, no, I think that's an interesting perspective.
And I'm not quite in the thick of it on that side as much.
So maybe that's a knowledge gap for me, but I would still think,
and I know you maybe that's a, a knowledge gap for me, but I would still think, you know, and I know, I know you think that as well, but I, you know, that the, those investors
would be, you know, highly incentivized to, to only want winners. But I guess when you're playing
the, you know, the, the index side and just really trying to, to get a few winners, you know,
if you see a glimmer in somebody's eye or something, and, and that's all it takes for you to throw them in your index
then like you said you don't have a lot to lose
especially with those people who have borderline unlimited money
so we're wrapping up here we only have a few minutes left
we have this show every Thursday except we're off next week
but we'll be back October 9th and we just talked venture capital private equity
so if you have anybody you want us to bring on the show or any topics you want us to discuss feel free to
send me a message but before we wrap up Matt Chris I want to give you guys the opportunity
and Tropic as well if you guys want to share something you're excited about something you're
working on and and just kind of, your final thoughts for the show.
I'm launching a,
a dinner club powered by this platform that I like a lot.
It's kind of similar to time left if anyone's heard of that,
but it's only going to be for tech folk.
I'm starting in the Phoenix,
but hopefully soon we'll scale out. This is under the brand that I'm working on,
so I'm pretty excited about that. That's awesome, man. Congrats. We love to hear the wins.
Always exciting, and it's always exciting to see things play out that you've been working on for
for a while. So I appreciate you sharing that. Chris, any big highlights you want to share?
a while, so I appreciate you sharing that. Chris, any big highlights you want to share?
I'm launching season two of my show next round on October 7th. I have, oh my God, so many
incredible investors lined up from LA, San Francisco, Seattle area, pretty much to West
Coast. I'm also here in the Seattle, Bellevue area, send me a DM.
I'm doing some local dinners starting in November. We're doing local dinners where I bring founders
together with one or two investors. I already have some investors willing to show up, willing to
come out and give some insight, make some connections. And I also have an app that I
recently built that I'm not launching just yet.
Probably will be next year, but this will be a investment platform to connect the founders and the investors.
So a lot going on. Super excited. You want to follow the journey? Just follow me.
If you're a founder, definitely send me a DM. You might be able to get a spot on the show.
That's awesome, Chris. Matt, Chris, you guys both mentioned dent uh you know hosting dinners
i'd love to get your quick 30 seconds as far as you know if you're trying to plan a local event
um you know and plan a dinner like you guys are you know what are some of the
the must-have things and how to go about that
well for me i don't charge for my dinners. I think you got to find a location that's really
good, like a private area. Some places will try to charge you for the venue, just offer to pay
for food so you can keep costs really low. I like to keep my dinners intimate, 10 people max.
So where it's not super crowded, everybody can meet, keep it about two hours,
usually a weekday, like a Thursday is perfect. Fridays, people usually have something going on.
Thursday afternoon is usually solid, plan it out a month in advance at the least,
usually like three months, try to add a rhythm or cadence to it so people can kind of
predict it and then have a purpose for what people are going
to do with this dinner, what the reason is, why are people coming together, and just keep it simple,
man. I think if you keep it simple, it can be something that's really good for your brand,
and you can build real community in person. It's much more powerful than just virtual meetings online, you know?
Having that, I echo what Chris said.
I'll pretty much hit all the good points.
Awesome.
Appreciate that insight, guys.
That's got to be something maybe I should, you know, get working on and put on my whiteboard for something to work on in the future.
Tropic, anything exciting you're working on you want to share?
Yeah, you guys will probably just see me all over the timeline. I'm like the Wolf Swiss Army knife.
Usually I spend most of my time on the Web3 and Bitcoin side, but hanging out on the Wolf
financial side too as well. So I'm just basically the spaces guy in all these conversations. So
really happy to be here with this one. This is a i guess you would say field for me uh these vc conversations
but i'll be here with you guys every week but the alpha that i got so far you know learn the game
before playing it know your deck so well that even if the power goes out that you're going to be able
to do it uh spit it out there and get all your numbers out just know your thing in and out i
think that's absolutely awesome and of course that the alpha is the dinners for branding and networking. So I
listen to podcasts a lot. And Eric Su, who does like marketing with Neil Patel, he swears by
dinners. He swears by these small intimate dinners, especially for the fact that he says he's an
introvert. And having the dinner sets up the the conversation and it just makes it so much easier for him to make these connections. So I think that
was absolutely amazing. And I took some notes, believe it or not, and I'm actually an introvert
too. I'm just an outspoken introvert, but I'm an introvert and I'm going to take that down and
take that to heart. So it was fun. Those of you that will be here next, not next week, but the
next space, but follow the schedule. It is
on the Wolf page and there's spaces literally every single day, all sorts of different topics.
There's trading, there's this VC space, there is investing and Q&A is all sorts of different
things. So it's hard to keep track, but just check the schedule. There's always something
every single day. And it was great to be here. Any last words before we head out of here?
No, that was awesome. I appreciate that.
To our speakers, thank you for joining.
If you're in the audience,
make sure to give our speakers a follow.
A lot of great insights they shared.
This is recorded so you can go back and listen,
but I know they post content on their page
all the time for you to keep up with
of different things they're doing,
different things they're learning.
So there's a lot that can be learned
just from observing.
So make sure to
give all of our speakers here a follow. And we'll be back October 9th, 5 p.m. Eastern,
for another Venture Capital show with some new speakers as well. So I appreciate everybody for
joining. And Tropica, I'll let you close the space. Thanks, everyone.
