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VENTURE CAPITAL & PRIVATE INVESTING
Recorded: May 8, 2025 Duration: 0:59:21Space Recording
Short Summary
In a dynamic discussion on venture capital and crypto, panelists explored the recovery of markets, the importance of strategic partnerships, and the evolving role of VCs as value-added partners. Key trends highlighted include the necessity for clear communication in fundraising, the impact of AI on valuations, and the critical nature of market timing for startup success.
Full Transcription
Thank you. What is up everyone?
Happy Thursday.
It's 5 p.m. Eastern.
It is May the 8th and it's time for the Venture Capital Show.
Jared, one of my co-hosts, I see you there in the crowd. Looks like you
got dropped. We'll get you right back up on stage here. And we'll get going. We have
a lot to talk about, of course, always in the Venture Capital and Private Investing
show right here on Wolf Financial. There's my friend Jared. I'm going to toss you that
co-host. You need to wait a second or so to get that going
Jared are you up here on stage?
Hey hey can you hear me?
Hello
Hey I got you now
Alright nice
How's the day going man?
Pretty good
I mean markets continuing to
recover we finally have a trade deal made.
You know, I can't complain, I guess, at this point, you know, looking at the market,
looking at the news flow, certainly trying to improve overall. I guess you could make an
argument either way, but I see more green than red right now. And so I cannot complain about
that one bit. How's your day been? Yeah, pretty good.
I mean, we definitely like those green candles.
I'm not actively trading quite the same way that you are.
But it's definitely always good to see those green candles.
That's always a lot of fun.
No doubt about it.
For sure. Working on getting some of our speakers up here on stage. I don't know. We've had a little bit of glitches today on X across some of the spaces in general.
For sure.
Working on getting some of our speakers up here on stage.
I don't know.
I know like last space, I had no audio for a little bit, which was always a fun trick to try to figure out.
And earlier today, we had a few connection issues, but they worked out pretty quickly.
So we'll see if we can get these panelists up on stage looking for, and if you are one of our panelists and I'm not seeing you, just go ahead and request.
Hit that microphone button down on the bottom left.
We'll get you right up on stage and jump into things.
I'm looking for Kyle as well.
I wonder if he's having connection issues.
Yeah, no worries.
We can just kind of hop into it if you're cool with it and when Ravi and
Matthew and Kyle come up you can just send them an invite or you can send them a message to
their app but I see we do have Colin on here so I'm excited to have a conversation with him
Colin's big on the digital asset side and so I'm excited to have some conversations around that
a quick introduction on me. My name
is Jared. I go by the name Self-Taught Success on the Internet. And basically, the meaning of that
name is all the information you're looking for is out there. It's just up to you to seek it out and
go find it. And we host this venture capital show every Thursday, same time after market close here
at 5 p.m. Eastern. And my connection to the VC world is I do a lot of
marketing for different companies. So a lot of finance startups, whether that's traditional
finance or decentralized finance and anywhere from pre-revenue all the way up to mid-cap stocks.
And so we help them grow their brands on Twitter. We've done 3 million followers and a billion and
a half impressions for different clients and helping them grow their brands on Twitter. We've done 3 million followers and a billion and a half impressions for different clients and helping them grow their brands. That's kind of my background. Colin, I'll pass it to you and let you give a quick intro about yourself.
different sort of take from some of the usual folks that are guest speakers here. Been in the
startup world for about 10 years now and previously have built products for onboarding investors and
for managing cap tables. So have been fortunate to see a lot of deal flow, even though I wasn't
acting in a traditional venture sense myself, but got to work with a lot of startups across every
phase of formation and capital fundraising and all that.
And so excited to be here and dig into it.
Thank you for having me.
Awesome.
Absolutely.
We're glad to have you.
I think this is your first time on the show.
It's always good to have some new faces around.
Ravi is not a new face.
He's a weekly guest that we have, always has good
takes, have a couple of questions. I'd love to ask you, Ravi, about the market in India
regarding VC here later today. But if you want to give a quick background on yourself,
Ravi, that'd be awesome.
Yeah, great to be here again. It's a fantastic uh to be in yeah it's been a very interesting week and
i can come back to later but really look at the emerging market space and emerging opportunity
uh you know especially in the ai-powered uh industrial revolution and look at area of
ai manufacturing and uh you know mentor cexos ceos and, and I've seen some important investments,
including IPOs, so it's very exciting to be here.
Thank you, everybody.
Awesome.
Yeah, we're definitely excited.
We have some good topics today.
A little less news-based, maybe just a little bit more hot-take-based,
and just from an educational standpoint,
I do want to highlight just one thing here.
This first tweet that I have, Emp, if you can pin that Mark Andreessen tweet, that would be
awesome if you're able to do that. And basically, it just gives you in the audience a background so
you don't have to watch the video of what it says. But basically, Mark Andreessen, he was on stage, gave a speech, and what he said was
cold email and emailing different firms for cold email outreach is basically a broken
method.
And if you reach out that way, people aren't going to respond.
And some people are saying, well, obviously, he's on his high horse because he's the leader of the
VC world and it's easy for him to say, but that's not always the case. So there's two different
sides of it. So that was the one side, but Andreessen's thought process and one of our
other guests, Mark Tobias, who's done very well in the VC space, he's been on our show a few times,
he agreed with Andreessen. And the basis of that is
to have a warm introduction is your first competency test. And if you can't get a warm
introduction, then there's probably better deals for us. And so that warm introduction goes a long
ways in that. So maybe we'll start with you, Colin, kind of what's your take to, you know, is cold outreach
something that works? And how far does that, when you're talking to different people, does that
warm introduction of, hey, I know you know so-and-so, I also know that person, you know,
this is how we've worked together in the past. How far does that go in your experience?
How far does that go in your experience?
Yeah, this is such a great question, right?
The art of cold outreach is, I find, very, very interesting.
And, you know, if we can for just a minute, right?
When somebody like, so number one, I think the art of cold calling is dead, which is
unfortunate because I think it's actually way more effective than emailing.
And I have an amazing cold calling script.
If anyone wants to hear it, it works actually really pretty well.
And the reason why is, you know, and this happens today.
I'll get you, I'll get a phone call and it's somebody trying to pitch me on something.
Immediately, I'm in fight or flight because you're threatening my time.
How long, how long are you, like, what are you trying to get across?
And how does that relate to me?
Immediately, if I don't feel any sort of value, I'm doing you a favor, right?
So I'm not interested in doing your job for you or doing you a favor.
If you have some value, like, okay, I'm interested, right?
And so maybe I'll just, if it's all right, I'll just give you kind of the script that
I love if it's an actual cold call, which is, you know, it's something along the lines
of, you know, hey, Jared, I know I'm calling
you out of the blue. I'm wondering if you have 20 seconds. I want to pitch you something. If you
think it's of interest in any way, let's talk. Otherwise, you can tell me to fuck off and leave
it right there. Because what you're doing is you're assuring them that I'm not trying to
threaten your time and I'm not trying to, whatever. We could talk at a time when it's available to you.
But what you want to do is break down the barrier to just at least get their attention
and get them open.
You know, we get, what is it, like 8,000 advertisements a week in America, something
like that, across, you know, every medium we can imagine.
You're vying for attention that's already exceptionally limited.
And so, you know, you have to cut to the heart of what their problem is.
And you also shouldn't assume that you know what their problem is, right?
You think you, you think you might, uh, you know, I get ads all the time for people that
from, you know, services or whatever, that they're going to help Prof.
Labs product, right.
What I do in my, in my role, if I can't see the value immediately, then I'm not interested.
Right.
And so it's just, uh, I think it's, it's important to remember, right.
That like, if you are going to cold outreach, yeah, you'd better you'd better be clever and effective in demonstrating why it's valuable for them.
Because otherwise, yeah, it's like I'm doing you a favor.
Right.
No, I think that that's definitely a valuable point.
You get the whole aspect all the time with different cold outreach of, hey, man, I'd love to pick your brand.
You know, I know I get that a lot on Twitter and I know people get that a lot of times everywhere.
And it's like, why should I give you...
If everybody wants to pick my brain, I give everybody my time.
I wouldn't have any time left in the day.
So I think that that's definitely a good approach and just straight to the point.
One of the things that always kind of gets me is when people are reaching out and they say,
hey, can I ask you a question? It's like, well, you just did. You know, if you only had one
question to ask, you wasted that question on, can I ask you a question? Like, let's just cut
straight to the point. So I'm with you, Colin, you know, cut the BS straight to the point.
This is what I'm after. And this is what I'm trying to do.
You'll appreciate this. I completely agree. My very first startup out of school,
my CEO showed me something and it was CEO to CEO. We were going to partner with this other firm. trying to do my you'll appreciate this i completely agree my very first startup out of school uh my
ceo showed me something and it was ceo to ceo as we were going to partner with this other firm
the entire message was in the subject line the email was blank it was hey can you talk at 3 p.m
eastern that was the whole thing no no reason no more fluff no reasons that we don't it doesn't
be more complex than that right i've actually done that before i've totally done that before there you go yeah exactly right so you know your time is valuable and when you show up and respect
that if there is value that you're trying to add i've found that you have a lot you know a lot
higher success no that that's brilliant um and ravi uh and kyle do you guys want to hop in i
say we also just added tim up here tim's been on our show a few times. He always had some really good input as well.
So I'll pass it to Ravi, Kyle, if you guys want to hop in.
That'd be awesome.
I fully agree.
You just get one shot, be direct, be focused,
do your homework before you do that.
And that really works.
So be very direct, clear.
And like you said, time is precious and time is money.
So just do it.
And I'll give an example today, right? There was a town hall with Bill Ackman this morning. I don't know how many of you attended that. Did anybody attend?
So, you know, so a very quick question to him was, you know, you know, of course, I said X, Y, Z. And I said, you know, Bill, I want to chew your, you know, brain on Indian, Israel, US, you know, tech startup. You know, it just worked well,
you know, and I'll give you an update soon on that.
Kyle, you want to chime in on that?
Yeah, it's a great point. I think awesome points all around and great to see some familiar faces on here. Sorry to, to everybody in, uh, in on the
panel or in the audience that missed my, uh, my voice. I'm happy to be here. Jared, nice job
holding it down. Sorry for my delays, but I want to keep the conversation going. So if you have
another topic, feel free to kick it off. But I certainly just wanted to agree with, uh, with
Colin's point. I absolutely have sent, uh, I've absolutely sent emails about rescheduling or
booking meetings where it's just like,
I think it's just faster for everybody if you pass it through like a direct message instead of as a full on email.
Everybody has such busy inboxes these days.
The goal is to make it as easy as possible.
Yeah, absolutely.
Time is currency.
So, you know, respecting people's currency and respecting people's time,
I think goes a long ways. Emp, if you want to pin up that next tweet, here was a question that
I saw or a topic I saw in the timeline this week that I thought was a good thing to get the
panelist opinion on. And the tweet says, what VCs think when looking at your startup? So he had
three questions as far as what VCs think when they're looking at your startup? So he had three questions as far as what VCs think when
they're looking at your startup. Can this company raise again in 18 months? Can they 100x my check
in seven to 10 years? And who are the other people involved that are investing? So I wanted to pass
it to the panelists. What do you think about those three questions? And then also, is there anything else that you would add?
Great question. Thanks. Oh, yeah, it's a great question. Thanks for the mic. I think those are great three starting points. I would add to that one question that I have at least back of mind is, you know, the go to go to market strategy. So I often do ask people that pitch like assuming that you that we do invest in you, right? 10 months out 12 months out.
the founders have thought this through clearly, hopefully end to end.
Right.
And I was just actually off a call today for a company, a portfolio,
a potential portfolio company. And it's in the,
it's in the travel industry. So essentially it's like, they,
they want to compete against, you know, the likes of booking.com,
something like that. Right. And they said, oh, yeah, we have all these like memorandums of understanding and strategic partnership with these big hotel chains.
Right.
And that's well and all.
Right.
But those are just exactly that.
Those are MOUs.
Those are top of funnel.
Right.
And so a question that I had is like, okay, well, that's top of funnel.
How do we convert that?
How do you, by we, I mean you, the co-founders, plan on converting that to paid customers?
Absolutely.
Obviously, you know, the name of business is to make money.
So having a plan to make, you know, to acquire customers and keep customers should definitely be top of mind.
So that's definitely a good point to bring up there, Tim.
Ravi, Colin, do you guys have any thoughts of what you would add to this list?
I mean, you know, it really depends, again, on where they are, but I really agree with the GTM.
But for me, you know, this will be, again, music to a year.
I always look at people's, especially the persona,
and I try to go back and see how many of these guys are on X,
which is strange, right?
It's a new phenomena because I want to really look at their, you know,
history and understand where they're coming from.
Similarly, I still go to LinkedIn.
I do check that.
One thing I really look,
especially if it's around,
if they're managed and they're either in the seed
or, you know, series A,
is really, you know, the credibility of traction.
And I really agree on the GTM.
You know, at this time,
you need to know very clearly
what's your inbound, outbound.
And, you know, what is the pipeline?
I really liked what you said. You know, this is what it is. You know, how are you going to convert outbound and you know what is the pipeline i really liked what you said
you know this is what it is you know how are you going to convert and you know where do you see
the money come in there's one particular piece i always do is also i know many people don't like
to see the roadmap i like to see from a co-founder's perspective that what is their vision
of course one year two year but i do want to see where are they taking this? So that's something which definitely I always encourage if it's not there
or even in the conversation, I try to get into that.
Yeah, I think those are really good.
And then the one I would add too, VCs are betting on your execution.
This is why VCs don't sign N sign NDAs they don't want they don't want your idea they want
to invest in you and they want you to build your idea right and so I have a
buddy this is a funny story I have a buddy that he he actually created more
or less the idea for uber like two years before uber was founded but he is not
the creator of uber Travis Kalanick is, right?
They executed, right?
He had this idea of like,
oh, could you use,
could we link up people
and have this whole network?
And it was effectively like,
yeah, an Uber or an Uber lookalike.
And, you know,
and he didn't do anything with it.
He didn't create Uber.
And so the ideas I've found
are oftentimes, you know,
not nearly as hard as
the execution, right? And it comes down to your, your, your grit, right? I mean, Airbnb is a great
example. Founders of Airbnb sold cereal in order to keep their company afloat. Like that's grit.
That's the sort of thing I would want to look for. That's the, you know, are you going to go
roll up your sleeves and just get the job done? Yeah. The, the cereal they sold i think it was the obama owes back in like 2008 right around the
campaign times that's right that was genius those guys they made like forty thousand dollars in a
couple weeks on yeah on on repackaged cheerios yeah exactly it was genius like they had cash
flow issues so they solved it yeah it's kind of like you hear the story of the FedEx guy who flew to Vegas and put his last investor money on a hand of a roulette and won. But
some people's risk tolerance is a little higher than others. If that FedEx story is true or not,
it's a little bit of an urban legend. But Kyle, I'll pass it to you.
Yeah, no, it's a really good, really great conversation.
And I totally agree with Colin on the execution side.
You know, the way that I look at it from a different, slightly different angle is like,
I know so many founders that are afraid to put, you know, in their use of fund slide,
what they actually want to use the funds for, right?
And so you end up seeing these like, you know, pie charts where it's like 20% marketing, 50% operations.
It's like, no, what are you actually spending on?
If you're raising $2 million, what do you need that money for?
How much is it?
Did you scope out your tech build out?
How much did you get a quote for?
Do you need server space?
How much is that costing you per month? Do you have a few
key hires? What do they need in salary and what is that going to cost you? I really like having the
budgeting plan and it doesn't obviously have to stick to it. I know how the startup goes and
certainly I've run businesses where you don't necessarily have audited financials at any given
time. You're moving so fast that that's not always practical.
But even just having a really good idea of why you're raising, what you're building,
and then you can go back and look at it.
Or in a future round, I can then come in and say, okay, you raised a million to do X, Y,
and Z things.
How do those things turn out?
And what are your next spends going to look like?
And you can kind of better track how the company is actually being built, which is, in my opinion, what a real company would do,
right? If you need cash flow issues, you're going to raise debt in order to acquire a new company
or acquire a competitor, you know, or whatever. But I just think that so many startups like are
intentionally really vague about that. Maybe it's because from a competitive advantage perspective,
but my gut says actually a lot of them haven't actually done the hard work of actually budgeting how much
the stuff's going to cost. And it's kind of a lazy thing. And that's kind of naturally one of those
ones that I don't love to see because money is really easy to spend once you have it. I'd rather
you know what you want to spend it on before you get it. I see Tim's got his hand up. I don't know
if you have any thoughts there, Tim. really appreciate your contribution there kyle because like so i come from an
engineering background and you know i i really want to see like uh again like co-founders of
thinking this through uh things to okay i get it maybe there's certain things where um there's a
bit of a nuance to that where
they don't want to necessarily show ways and means but there are still ways to demonstrate
uh that um you know co-founders are going to be responsible for the money that they're getting
from investors right and everything from okay it's it's not just 20 for marketing it's like okay what is it for though can we go
one or two layers deeper it's like marketing for like online marketing campaigns or hiring someone
and what is that uh ideal candidate can you pick paint paint a picture for me uh or else it's just
a kind of a black box called marketing as far as I'm concerned.
Also, a previous speaker mentioned something like marketing.
Like, are you doing like paid ads or like do you actually have a budget plan or are you just quote unquote market?
Like, what does that mean?
Yeah.
Like what does that mean?
Right.
A similar sort of twist to that is like for me is let's say the company already has a product.
I often say, so pretend I'm your customer.
You know, can you walk me through the user story?
Right.
Like how long does it take?
Let's say it's a SaaS product.
Right.
For like property restoration.
It's a mobile phone app.
Literally, that's a company I'm looking into,
right? It's like, okay, say I'm like a contractor, and I just downloaded your app, right? I'm the boss, I signed the check, here's your 10 G's, right? And I need to train all my pipe fitters
or plumbers up to use this mobile app. Can you walk me through the training process? Like, how long does it take?
And what does that involve?
And how quickly can my guys learn the tool?
Because, you know, construction workers,
they might not be exactly tech savvy.
So, you know, I'm concerned as a business owner, right,
of downtime, right?
So also, I liked uh someone mentioned the aspect of
grit which i define as passion plus perseverance right um so important so important i want to see
grit right uh uh like not just in the abstract of like okay okay, well, maybe I'm a first time founder, but I had grit in this and I managed like X number of million dollars of projects.
This is how I overcame it. Right. And one more thing I really wanted to add is skin in the game, skin in the game.
uh if if founders and and i mean this in the truest way like if founders are not like radically
like in like they're not like a hell yes right then like what makes them think in their right
minds that investors will be investing in their vision if they themselves aren't willing to and
they sound a little extreme here but this is like? It's like, if they're not at least willing to mortgage the house or at least sell their car, if they,
or, you know, put real money on the table, right? If let's say it's the right way to go,
I'm not saying it's the only way to go, but if they're like bootstrapping for the first year or
two, I want to see that not just one, all founders as much as possible. I get it. There's
no hard and fast rule, but there shouldn't be a founder that's like, hey, I'm the ideas guy,
and that's it, right? It's like, okay, but what do you bring to the table, right? In terms of skill
sets, and more importantly, in terms of capital, why? Because it makes it a lot less likely that
any one of these, let's say, three founders are going to just walk away from the situation.
We'll make them think twice, right?
Because, you know, maybe like 100 grand or like, you know, 500 grand of their own hard earned money is locked into this company, right?
It's going to make it a lot less likely that one of these founders.
And I sometimes notice that like the so-called ideas guy or person like it's just so
easy for them to bail right if they're like if they have no cash tied into the business
so i would add that as well as like you know skin in the game
that's a that's definitely good to hear so the question that makes me think uh come up with after
that that great great part you had there, Tim,
is what do you think about founders as far as payroll? One thing that's such a huge turnoff
to me is when I look at, you know, a founder raising, you know, maybe they're early on,
they're only raising a few million dollars, but then they're taking a quarter million or half a
million dollar salary. And so my thing is, why should I invest and put some money in when what you're raising
is going to all your salary?
And I think it's different if you're making 40 grand
or 30 grand or something like that, enough to get by.
But when you're taking like,
it's like you're investing to having investors invest
so you can have a nice six figure salary.
I wanna get your guys'
thoughts on how should founders go about compensating themselves when they're going
through that aspect. Because I think the skin in the game aspect is important. One of the
young founders that I'm really impressed with, he takes no salary other than a living stipend.
They cover his living expenses, but the rest is just equity. And he told me that his investors love that because he's leveraged all the way into the company.
The company is either going to work and he's going to be crazy rich or the company is not going to work and then he's out of luck.
And so he has no other choice other than to make it work.
And when he told me that, that was really impressive.
He's like 23, 24 and his company is worth a couple hundred mils so
hopefully it continues to work for him and he ends up getting pretty rich but
wanted to get your guys's thoughts on that as far as how should
founders go about compensating themselves while still having skin in the game
i really like this one and i think marcus limonis has a good take here and what he said more or
less is it should be enough that it's not a distract like founders should if they need to take a salary
that's i think that's fine obviously you got to pay the bills you get you know keep the lights on
i get that so it should be enough that it's not a distraction to the founder and not so much that
it's a distraction to all the investors right so there's your band now that that that's going to
vary you know if if if the founder is you founder is partnered and their partner doesn't work and they have kids, okay, that might necessitate a little bit more capital. If not, yeah, 40, 50, 60, 70K, whatever it is, so that they can just get by and then the rest in equity to align incentive.
And Jared, like you said, when the company succeeds, they succeed and you're all good., yeah, I think as a rule of thumb, I like that.
Not so much that it's a distraction, but enough that it's not a distraction.
No, that totally makes sense.
Ravi, Tim, Kyle, do you guys want to talk about that?
Yeah, totally.
I fully agree.
I think definitely agree that it's an alarm bell when you see some hefty,
especially this founder and co-founder, and they're putting all the money in.
I mean, that's definitely a very clear warning sign.
And I definitely would go for somebody who will say, OK, I'm going to take one year.
Again, based on the personal situation, I really cut on that because I still have my equity and want to put the money in.
Because, you know, you will be in that crunch zone, right?
Especially if you're pre-seed, seed, or seed, or series A.
And that's when you really test the, you know,
are they looking at that long-term financial planning
along with their own personal professional planning?
I think that's critical.
But definitely alarm bell when you see these co-founders
or founders saying that, you know,
this is the X amount of money that I want to pocket that in.
It's crazy. I've seen it happen.
Awesome.
Well, if we're kind of good on that topic,
I do want to take a moment to remind everybody we're here every Thursday,
same time. We're kind of at the halfway point of our show.
If you want to go ahead and give our followers
or give our speakers a follow here,
they provide a lot of good information on the timeline.
That way you can keep up with what they're working on.
And also in the bottom of your space,
that purple pill button,
if you want to click that and retweet our space
so more people can get involved here,
more people can see our space, that would be awesome.
And if you have any questions for the panelists,
feel free to drop it down there
relating to the VCPE world
and we might talk about it.
So that would be good.
I do also want to give a quick shout out.
I see Samuel Gibson in the audience.
He's got a pretty cool nuclear energy company.
Tim, I know that's an industry
that you know pretty well as well. So sometime
I'd like to get you guys on and just have a space and just talk about the energy sector and how that
relates to the VCPE world. So with that said, we can move on to our next topic that I wanted to
talk about. And this is kind of a hot take. This tweet comes from Harry Stebbings and if you're able to or Kyle pin that tweets here in
the the top of the scoreboard and the tweet says venture capital has
transitioned from a high margin boutique business to a low margin commoditized
industry there's no going back. Kind of a hot take.
Panelists, what do you think on that?
It's a fascinating conversation.
I think that we've talked quite a lot about management fees and how certain
fund sizes are really required, but then how certain large funds
it becomes really,
really difficult to deploy. So maybe there's a conflicting opportunity there between where the
actual margin, where the juice is, and where kind of the incentives might lie as a fund manager.
I actually think I disagree with this, though. A couple family offices that I work with
have said similar things. I just think it has more to do with the economics. I think that, you know, probably precede or seed stage businesses are
just going to continue to look a lot different with tools like cursor with tools like the AI
tools that can code for you. You know, you actually shouldn't need really any money at all
to build your first prototypes. Right. And so that that totally changes the game.
I think that raising with just a singular pitch deck these days is probably not going
to happen.
And I don't think that's necessarily because venture is dying.
It's just because the barrier for those types of early stage startups are just way lower.
Right.
And so now we're just seeing a lot of these things change.
change. But because of that, the economics also change as well. I think a pretty tough IPO market
But because of that, the economics also change as well.
has also made cynics around venture capital feel a bit more empowered to talk just because there
haven't been quite as many millionaires and billionaires minted as of recently on newer
and newer deals. But I think just like anything, that will change. And we are starting to see
that cycle change with some new and upcoming IPOs.
You know, so I think that this is really just kind of a economic indicator that in tougher
venture capital cycles, it's easier to dunk on the industry.
But I still think the return profile in VC still has a strong place, provided that you
get in at the right economics.
I think that just investing in any hot deal as a FOMO thing is not going to be successful versus the approach of really being
mindful of the price of the deal for your upside, as well as the right founders and making sure that
the acquisition or IPO opportunity lies there at the end of the tunnel. I still think VC is, there is still a world where
the top venture capital operators that are running the VCs themselves can help add 10 or 100x
valuation multiples on their companies because of how plugged in connected they are into additional
funding sources, as well as into top tier clientele in terms of hiring. You know, the days of just having a VC that commits capital and does nothing else, that
is gone.
But value add VCs, I still think there is a huge market for it because quite frankly,
I just haven't found that many in my personal experience.
Can I just say, Kyle, it's excellent and I fully, fully agree agree because you know the the whole uh premise really is the the
vc wants you to win uh or the pe firm because if you will win everybody else will win and just by
just giving money and saying that that's it you know i'm going to check with you in like a few
months or whatever a few uh a quarter i think the more you're able to come together to really uh
make those connections.
And I've seen that, you know, and I've seen when you do that, everybody wins.
And, you know, there's a great, there's one company that, you know, invested on drones in India.
And there was one very interesting guy who is a good friend of mine from Alberta.
And, you know, he would, and we don't know Canadian VCs, right?
It's new to us.
And he was like, somehow, I told you a story of the Elon Musk retweeting this particular startup, right?
And we got a 5 million funding just because of X.
That's why I love this space, because you guys have nailed it so well, right?
For the techies, right?
And techie investors.
So this guy, and he said, you know, I'm not just going to put your money, I'm going to actually make those connections.
He had fantastic connections. He opened up a market in Malaysia.
He also opened a market for export in Panama.
So I think that is where you come in, right?
Because you want to have this person win because you will win too.
I think that's really important too.
And rather than saying, okay, you are on your own.
And I think that's a huge difference.
And I think we've seen more and more of that.
Ravi, hold up.
Did you just say you just raised $5 million off of a post on X?
Yeah, I can send that to you.
It was when Elon Musk retweeted.
I'll send you.
It was all over the Indian media.
I'll send that to you.
That's pretty cool.
It was covered by the Indian.
We got to get a round of applause for that.
Yeah, it was interesting.
So that's why when you guys started this, I was like, these guys have nailed it because the AI industrial revolution and the VC world, it's so great to have this conversation here.
Because you have a certain kind of a conversation on LinkedIn, but this is where you both nailed it.
And I really respect that, the Wolf and the entire team.
Amazing.
Colin, I saw you come off the mic.
Did you want to chime in?
I was just going to say, I couldn't agree more. I actually think finding capital is not that hard, but that's not the question, right? Is this, are you going to find smart capital that's going to
accelerate and springboard your efforts, right? And a good VC is going to be worth many, many,
many times the size of the check that they write you because of the connections, because of their experience.
We meet with our VCs so regularly, and we are always interested in gathering their feedback on the market, on our product, on where we want to take it.
And that's why it's just absolutely critical to stack your investors, your list of investors, those of your backers,
with those that can really provide
that valuable insight and feedback.
Amazing.
Tim, go ahead.
Yeah, really good contributions here.
So a few things.
One thing that Kyle talked about,
I think is just so important,
is absolutely AI is leveling the playing field
for people that may not have necessarily come from an engineering background per se, right?
It's increasingly becoming, I guess, clear for sophisticated VCs and just angel investors for that matter,
that, you know, founders can do more with less, right?
And so, you know, the expectation is that they can, you know,
bring their A game, right?
Even more so.
Also, a comment was made about, you know,
that sort of long-term strategic investor, right?
And I'm noticing, and I'm glad that it's happening that there's more companies that sort of just see vcs not just as
like a check but as a strategic partner meaning it's like okay well uh maybe there are important
people that you know well let me go back to the comment I made earlier about a go-to-market strategy, right?
So it might be like, okay, a check was made, the go-to-market strategy seemed fine, right?
But then, you know, maybe in the first quarter, the second quarter, call it maybe like the second milestone,
I can quarter call it maybe like the second milestone.
The portfolio companies, oh, you know what?
We're struggling in our quarterly meeting update.
It's like we're struggling with meeting those numbers in terms of monthly active users or whatever.
Right. That speaking personally for Vine Ventures, like, you know, we actually appreciate that candor because then it helps
puts us in a position to help our portfolio company, right?
Okay.
You know, why is that?
Oh, maybe one of our marketing persons is not working out or maybe it's nothing as major
as that.
It could be just like, we got to tweak the marketing campaign thing.
Okay.
Then again, we can keep asking why.
It's like, okay, well, is there something we can help?
Yeah, you know, we just want some maybe marketing strategies or whatever.
Well, maybe we don't have a marketing expert in-house per se,
but we might have someone in our network that does, right?
network that does, right? And that's just so important. And I think when startups have like
And that's just so important.
VCs in their corner like that, I think it really does improve the chances of success. And listen,
guys, I mean, at the end of the day, we're all here to make money, right? Money for the investors,
the LPs, the VC, as well as, you know, for the uh yeah that's uh those are some of the points that
just came to mind uh great conversation yeah Tim can I just add you know one point which I really
like especially when you're looking at a startup you know instead of just waiting for that weekly
call or once in two weeks uh you know when you have a startup in your building don't feel shy
to reach out I mean there's a like you need to maintain a balance with your focal point or whoever.
Reach out.
You know, I had this fantastic guy
who was doing extremely well in an AI startup
and said, you know, I'm getting stuck with my legal
because the guy's not responding.
It's been three weeks.
And, you know, do you have your network?
So it could be something simple as that, right?
So I think having that conversation,
that relationship will be very very good for you
rather than saying oh you know he's i'll be a little scared and say they've given us money we
don't want to tell them about our weakness talk about your weakness talk about if you're having
some challenge have a conversation you know this is a partnership it's just not a partnership about
money everybody wants to see you win and you know because you will win everybody else will win with
you so that is is very important. And
that's what I also see in the when I said persona, the proactive, solving the problem,
finding a solution and asking for help. I think those are some important indicators.
Awesome. A lot of good conversation there. Tim, I know we've talked a little bit on AI,
just me and you, but also on the show, we've talked about AI a lot.
And one of the questions is, is it overhyped or overvalued?
And one of the tweets here, I'll pin this tweet here,
from Greg Eisenberg.
Emp, actually, if you can pin that, that'd be awesome.
It was the last tweet I sent.
But it says, we're at the stage of the cycle
where all you need is a beautiful demo video of your AI startup that gets 500k plus views on X.
And you'll get offered 5 million to 10 million of venture capital at a 25 to 35 million dollar valuation.
So basically, Greg's take is there that AI is overhyped and it's overvalued because people are so keen to rush to as soon as somebody says AI that they're all in on it.
But the value maybe isn't quite there.
But the hype is.
So I want to get your take, Tim.
Maybe we'll start with you.
Colin, we'll go to you, Mr. Bitcoin, as we hit $103,000 on Bitcoin.
But we would love to get your guys' take on that tweet there from Greg Eisenberg that we
have pinned here. Thanks, Em. Yeah, for sure. That's a great question. I mean, I do come from
an engineering background, so I think that sort of, for better or for worse, sort of colors my
perception in terms of valuation. And in my view, I knew AI was already overhyped
when about a year and a half or two ago, I was getting groceries at a Walmart and I saw a $300
toothbrush that was advertised, electronic toothbrush advertised as being powered by AI. Okay. So, you know, it, it clearly is overhyped.
That being said, I think it depends on, I mean, I go by case by case basis. I'm not going to reject
outright whether, you know, a company is AI happy, let's say, and just sort of sprinkles AI,
you know, those buzz phrases and, you know know on their pitch deck but at the end
of the day you know I look underneath the hood as much as possible and and yeah
you know I think it is overhyped that's just my view but fundamentally if the
company has a good technology under the hood then you know
I'd be more than happy to look look into that. I agree and I think I think I
think it is overhyped I think in the macro right the AI sector has been
really really unique and fun to observe because I can't think of any other
sector that so quickly got to just fully commoditized service as fast as AI did.
Once, OpenAI, what was it, five and a half days?
They had 100 million users in five and a half days.
I mean, that was insane.
Everyone was like, oh my God, ChatGPT is going to change everything.
And now it's like Tim said.
I had a conversation with my head of finance a few years ago and we were joking about valuation.
And he was like, yeah, add the word blockchain, tack a zero.
Add the word AI, machine learning, tack another zero, right, on your valuation.
And, you know, we want to avoid that, right?
It's important to Tim's point.
I completely agree.
It's so important that there's actual value being built here, right?
Like, what are your unit economics, right?
Like, the actual cost to run
these calculations and for an AI to, you know, to operate, it's quite high, as compared to, you
know, standard, whatever API calls and everything. And so it's, if you have a path to profitability,
and AI is a part of it, fantastic, right? I want to hear about it. But, you know, if this is a play
to simply juice your, you know, your valuation, right? What was the Long Island iced tea company that added the word blockchain to their name and then their stock price tripled overnight?
I'm not interested in that. That doesn't help anyone.
Dang, I didn't hear about the Long Island iced tea thing.
But that kind of ties into what we talked about earlier, Colin, as the aspect of what are the different things that VCs think when they look at your startup.
Basically, what you're saying is, can you still produce revenue?
Can you still produce a product that works?
Those are things that still matter because VC is still business.
Business is still driven by, can you drive revenue and can you make a profit?
Those are definitely some good takes there, Colin.
Kyle, I want to give you a chance if you want to chime in. Otherwise, we can hop to the next topic. Cool. So we'll hop.
Sorry, can I come? Because this is my, AI is my real work. I really, you know, the term AI
washing, I fully agree with that. And I think the piece really is, you know, especially in the AI piece,
you are still looking at new products.
To really understand the product value and really go deep into it,
it's so critical because everybody's throwing the AI right, left, and center.
But I also feel that you really need to understand, right?
You need to understand what is the value proposition,
the product fit is critical, and also the plan to, you know,
kind of evolve as you're moving into this AI landscape, right? And I also feel very strongly
that, you know, if you want to look at, one is AI in the service, but you're also looking at AI
integration across industries. So especially now, I focused on AI in food for two years. Now I'm
looking at AI in smart manufacturing, which has been there for a long time.
But we're only looking at AI a little more strategically right now.
So there is that sunrise opportunity.
But on the issue of 500 likes, you can get them paid.
That doesn't really, I mean, I'm not really impressed with that statement, I have to be honest.
Because you have to do your due diligence, right?
You need to see
the storytelling, how genuine it is. Is the storytelling backed by the media, the authenticity,
and so on and so forth? So just 500 likes, I can pay for it and get 1,000 likes. That will not
bring me the money. So that's a little strange, that statement, I must say.
Cool. Appreciate your take there, Robbie.
Always good to get a broader perspective there, too.
One more thing. I've got a couple ways we could go on this.
But kind of keeping the theme of what we've been doing here on the show and bring up another tweet.
And this one comes from Martin Tobias.
Martin Tobias is a pretty impressive guy. If you're not familiar with him, he's been on our show maybe three or four times, but he thinks he's been invested in about six different unicorns
and he goes through a lot of different pitches. So very, very educated guy,
pretty impressive to hear him talk. And his tweet says, Emp, if you're able to pin that,
that would be awesome. His thing is your why now story should be super obvious as a founder and easy to explain.
And he goes on to say in the tweet that your why now equals your market timing plus your technology inflection plus societal readiness to accept your product.
And if you miss one of those, one of those three,
then you're early. But if you miss two, you're too late and you're dead. I wanted to get your
guys as a panelist, get your thoughts on that. A little bit of a hot take. I, maybe not as
educated, but I know Martin is pretty smart. So I would tend to agree with what Martin has to say,
but wanted to get your guys' thoughts on that. Yeah, this is an interesting one. So I would tend to agree with what Martin has to say, but wanted to get your guys' thoughts on that.
Yeah, this is an interesting one.
And I think that everybody might have different perspectives.
I think there's one thing that is, it feels a little taboo, but you know me,
I don't really care. There,
there's a kind of like a hidden fourth variable that at least I've seen when
I've fundraised and I've sat on,
on, you know, all three sides of the table, you know, as a, as a founder fundraising,
as an investor directly deploying and as a syndicator, that's, that's bringing in capital
into particular deals. And I think that there is a fourth variable in terms of,
it's a little bit more complicated, so it's not as easy to fit into
a tweet or an X post, but it's how much future fundraising you already have secured and what
your fundraising journey looks like. And I think that in a lot of businesses where you're going to
need a lot of capital, having a clear roadmap on how you're going to raise not only the full round
itself outside of just my
capital, especially for me. I don't often lead rounds. I'm more of a follow on investor. So I'm
looking for, do you have a lead slash how are you going to raise the extra 10 million that you're
going to need? And what does that look like? And for me, I think that the answer of, well,
we're just going to make it happen with grit sounds really good on the surface, but is really difficult in practice. And it's why a lot of investors invest in second time or
serial entrepreneurs that have raised a bunch of money before in previous businesses, because it
shows you have capital connections. You know how this game goes. It is why I think in a lazy way,
in a lot of cases, but it is why having big VCs on the cap table is a solid signal
because it shows that A, you're able to raise from those types of people, but B, those are
companies that are going to help you raise additional capital in theory, certainly. But
if you get Tiger on your cap table, it's probably likely that if you wanted to go IPO, that's a good
partner to have, right? And so having them on the cap table early makes it more likely, in my opinion,
that you're going to be able to make that possible. And it's not required,
but it's certainly a positive signal. And I do think that that's one other factor that, again,
it's a little taboo to talk about. And you rarely hear an investor actually say those things word for word. But in my opinion, it is, I think, an important factor that needs to be considered.
And if your business doesn't need that much capital, that's wonderful.
But I would then make the focus more about how you're going to return a profitable revenue
rate in a short period of time.
But if your goal isn't to make money within the first two years, then you need to have
a pretty good plan for how you're going to have a multi-year run rate on top of deploying the capital that you need to scale the product. So I think that that's
the one extra component that I think is important to tackle on there. But I would be interested to
hear everybody else's thoughts on at least the first three, if not my additional bonus there.
Yeah, so I think it's a good starting point.
Market timing.
I mean, in practice, it's difficult for a variety of reasons, including externalities like geopolitics and tariffs, for instance.
Right.
It's like the whole argument of like just timing things perfectly. You know, obviously, if we can buy low, sell high, right,
for stocks or whatever other asset class, that's the ideal.
That's perfect, right?
But in practice, especially when we're talking about startups
that may have, you know, call it, you know, price sensitivities
due to externalities, and that's just in practice difficult.
Tech inflection, absolutely.
You know, case in point would be something like Palm Pilot, right?
They were there, but they were essentially a early generation tablet, right?
But the tech wasn't quite there in terms of, you know, the form factor was clunky. It was a black and white screen, right? But the tech wasn't quite there in terms of, you know, the form factor was clunky,
it was a black and white screen, right? Societal readiness, huge, very huge. Why? We can talk
about the diffusion of innovation, right? If you go, like, at the end of the day, it has to be
something that society is ready to embrace, whether we talk about AI to, you know, humanoid robots, right?
It's so important.
And that goes back to my earlier comment about, you know,
user story and usability, right?
It's like, I remember sitting in, and I'll end my point here,
on a particular biotech startup.
And essentially I said, okay, well, yeah, so it was an implant.
It was an ultrasound technology implant for blood pressure monitoring. or let's say my, you know, my grandfather got this, is a patient that would be,
this would be a good use case, right?
Can you walk me through, like, start to finish?
Like, what does that look like in terms of consultation?
Like, grandpa's now in the, you know, speaking to his doctor, right?
Like, how do we get from that point A to point Z
when the implant is now there and it's doing its thing,
it's monitoring for potential stroke conditions?
That's a good take there,in do you want to chime in yeah i mean i absolutely i was i think it's i think i i i like this tweet because i think it
it points to just the importance of like what tim said of just how many variables may be out
of your control right and i kind of i kind of of come back to something that he said as well,
which really I think comes down to storytelling and the emotional pull of your product.
Because the best technology doesn't always win.
In fact, the best technology sometimes loses by a landslide.
Oftentimes it's the emotional pull, it's the story behind it.
And I really think that more taps into sort of the societal readiness piece of the tweet there.
Yeah, there are too many variables for us to be able to plan.
I joke with people, anyone that tells you they understand macroeconomics is either a fool or lying to you.
Because there's too many variables.
There are too many things to accurately predict everything that could you know could go wrong ask anyone that was in a
brick and mortar business how things were going christmas 2019 okay four months later you know
who could have planned for that right uh there are there are so many variables and so you know
being uh being clued into you know yeah like the reader on your customers the societal readiness
right how how those in the market are using technology
and therefore might use your technology,
your product, your service.
That's something you can control, right?
You can go look at that and actually plan for that.
And so that is kind of where my mind tends to.
Awesome.
I love getting the takes from this
just because we have so many smart people to come on this panel. Also excited to have some more Samuel come on that. And also shout out Gnostics,
if I'm saying that right, in the audience, just connected with him and DM. Would be great to have
him up here sometime as well. Kyle, I want to pass it to you if you have any thoughts or questions
you want to share before we, as we kind of wrap up the end of the hour here. Yeah, well, look,
I really appreciate everybody being here, Ravi with with some fantastic perspectives and dude i'm still reeling at the fact that you raised
five million dollars from an x tweet bro that's so sick and it made news it made news in india
i believe it i believe it you got to send us the info i want to i want to look into that that's
that's tremendous i mean you're you're always crushing it with your posts on the platform. So I can't say I'm surprised,
but I'm certainly impressed. But Tim, thanks a lot for being here too. I thought you had some
awesome perspectives today. And I think you've been on before, but you're certainly always
welcome in the future. And Colin, great to see you again as well. I mean, first time maybe on
the show here, but I know you've been on many Wolf Spaces before and you're a friend of mine.
We go way back. So awesome to have everybody here. And of course, Jared, you are the host
with the most. Absolutely crushing it today. Thanks a lot for everything. Emp as well,
behind the scenes. If you guys don't know, Wolf Financial does, we've got multiple media
properties now. We have a
trading channel, we have a sports channel, we've got a web through channel, and of course the main
channel covering everything in the stock market, but certainly many topics outside of stocks as
well. But you can check out any of the accounts, follow, retweet, reshare, repost, and hit me up
if you want to be a guest on this show.
We do our private markets and venture capital discussions every week, Thursdays at 5 p.m. Eastern, 5 to 6 p.m.
So it's been a wonderful time today, an awesome conversation.
Really, really appreciate the Wolf community for coming out and sharing and reposting and joining and viewing the panelists as well as the Wolf team for putting it all together
behind the scenes. So with that,
I'm going to kick it over to Emp to close out the show.
Appreciate that Kyle. And thanks to Jared as well.
Big shout out to these panelists. If you are in the audience,
make sure you give these guys a follow,
check out all the other content they have,
the other conversations they're a part of on and off this app.
We do appreciate their time. Big shout out to my two co-hosts always running the Venture Capital Show
each and every Thursday at 5 p.m. Eastern. Make sure you tune in next week as we continue this
series. It's been one of my favorite shows that we've got launched this year. And like I was
saying, we have all kinds of stuff. Check that pinned tweet on the Wolf Financial page. You'll
see all the great conversations we have across all of our different accounts right here on X. And if you have any
ideas, send them over to us. We'll check it out. We'll look into it. Appreciate everyone that tuned
in. Happy Thursday. Hope you have a great evening. And to all the mothers out there,
happy Mother's Day this weekend. And with that, I'm signing off. We will catch you guys tomorrow morning. Thank you.
