David Tisch: The 3 Most Important Variables When Raising Your Seed Round | 20VC #983

1. 0:00 – 3:03

   David’s Entry Into the World of Venture

   1. DTDavid Tisch0:00

      Everybody can ask for whatever they want, and everybody can say yes or no. That's the way this business works. If somebody says yes, that's the price. (instrumental music)

   2. HSHarry Stebbings0:07

      David, I am so excited for this. This is one of the, uh, favorite discussions. I mean, I write a schedule, and I'm like, "I don't know really why I'm writing it," 'cause I know we're not gonna stick to it at all. But thank you so much for joining me, David.

   3. DTDavid Tisch0:18

      Thanks for, uh, having me back, Harry. Excited to do this. Are we-

   4. HSHarry Stebbings0:21

      Now-

   5. DTDavid Tisch0:21

      ... are we sparring today? Or we're just gonna have a light, uh, fun conversation?

   6. HSHarry Stebbings0:26

      Oh, no. I'm, I'm ready for a duel.

   7. DTDavid Tisch0:27

      Okay.

   8. HSHarry Stebbings0:27

      This is like a fight for the death-

   9. DTDavid Tisch0:29

      Okay.

   10. HSHarry Stebbings0:29

       ... uh, in VanShake.

   11. DTDavid Tisch0:30

       I brought, brought my... yeah, ready to go too.

   12. HSHarry Stebbings0:32

       Uh, tell me, for those that missed our first show, how did you make your way into VanShake? 60 seconds.

   13. DTDavid Tisch0:38

       Yeah. I, uh, I grew up loving the internet, and that's what I, I fell in love with as a kid. And, uh, I never understood what the career path, uh, into this world is. And I actually don't think, uh, there is a traditional one. I think everybody finds their own way, and my way was, um, you know, I, I joined an organization called Techstars early on. And when I did that, I signed up to be an investor. And BoxGroup, uh, at that time was my side hustle. Uh, and then in 2012, left Techstars to do BoxGroup full-time. Uh, so now I'm 11 years into that, uh, full-time BoxGroup journey, so I'm, I'm old in this world.

   14. HSHarry Stebbings1:16

       Now before, you know, I absolutely maul you on your portfolio construction, I wanted to kind of do a little bit of, um, armchair psychology. And so I believe that we're all functions of our history, David. And so, what are you running from do you think?

   15. DTDavid Tisch1:29

       I mean, uh, you're getting deep, Harry, really quickly. I feel like I've seen the internet evolve, and in general, you know, had a vision for what was gonna happen, and a lot of that ended up happening. And I feel like I watched it and wished that I participated in some of it. And so, uh, I, I think the history of being the age I am and watching the evolution of, uh, this world sort of pushes me forward.

   16. HSHarry Stebbings1:59

       Can I ask a personal one?

   17. DTDavid Tisch2:01

       Yeah.

   18. HSHarry Stebbings2:02

       Someone asked this, and they said, you know, "Your family is very successful." And they said, "D- were you running from the perception of, like, being one of the family members and wanting to strike out on your own?"

   19. DTDavid Tisch2:13

       I mean, I, I think it's a... there's, there's a lot of nuance in that answer. I'm an individual, and I have my own ambition and desires and goals that are not necessarily attached to the history of my family. At the same time, I have an immense appreciation for, uh, the blessings of, of coming from a, a group of people that worked really hard and found success. And so it's not this rebellion or desire to, to strike out on my own as much as it's, like, I love what I get to do, and it happens to be in a different world than what other people, uh, have done. And so it's, um, it's not a, a negative lens of it versus a sort of positive one.

   20. HSHarry Stebbings3:01

       Final one before we dig deep on, on portfolio.

2. 3:03 – 4:09

   What does success mean to you?

   1. HSHarry Stebbings3:03

      Success has many different kind of connotations and meanings. What does success mean to you?

   2. DTDavid Tisch3:09

      Yeah. I, I think I take the personal perspective of, like, success is building a life that you're content with. And whether that's, uh, family or, or friends or, uh, the people that surround you, I think there's, you know, the core of, of that answer is there. And then on the work side, our goal is to be part of other people's journeys. This is a job that actually isn't about us, but really about the founders we're fortunate enough to have the opportunity to work with. And watching them succeed brings us both emotional and, and psychological success, but also financial success. So I think there is real alignment in, uh, the success of the people we're, we're able to work with.

   3. HSHarry Stebbings3:53

      I, I, I totally agree with you there. I always say for me, it's like I wanna be 75 and in an armchair and have grandchildren running around, and I want them to point at companies and me to be able to say, "Ah, you know, BoxGroup or 20VC played a tiny role."

   4. DTDavid Tisch4:05

      How, how tiny was that? Right. Yeah, that's cool.

   5. HSHarry Stebbings4:07

      Um, that, that, that's mine.

3. 4:09 – 8:40

   BoxGroup’s Portfolio Construction

   1. HSHarry Stebbings4:09

      I wanna move to the fund itself. So you raised 127 and a half each, I think 255 total, between two funds in '21. Can you just walk me through the portfolio construction in terms of how many companies per fund for each one first?

   2. DTDavid Tisch4:24

      Yeah. Uh, I don't think the details are as interesting. I think the model is, is what's probably more interesting. And so our goal is to work with the best founders we're able to have the opportunity to work with. And I think more than anything, it's not putting our business in front of the founder, and not making our needs important enough to stop us from investing in a company. And so it really is about agility and flexibility as we think about deploying capital. At the seed fund level, our goal is to back people at the company formation or soon after. So in a traditional seed round, we're happy to be the second, third biggest check on a cap table.

   3. HSHarry Stebbings5:05

      Got it.

   4. DTDavid Tisch5:05

      In a pre-seed round, we're happy to lead it. And so I think the goal is to say how much money are you looking to raise, how much money is available for us to put in, and let's find a, a place where we're both content with, uh, that arrangement.

   5. HSHarry Stebbings5:22

      Okay. So you have 127 and a half million in one. I, I have this conversation with, you know, my pre-seed partner often where it's like, "Oh, we can only get 100." Now, I have a $33 million seed fund and 110 million growth fund. There's, there's no point in me writing 100K checks. It, it doesn't make sense. And so where is that barrier for you of not letting business get in the way and a too small check?

   6. DTDavid Tisch5:49

      I, I don't, I don't have one. Um, and I don't necessarily walk in and say, "This doesn't make sense," if the core of...... the decision is this is a company that we want to be part of. And can I build a portfolio of only 100K checks? That feels like a bad decision.

   7. HSHarry Stebbings6:12

      Yeah.

   8. DTDavid Tisch6:12

      Can I build a portfolio where there are exceptions to the norm throughout in different ways? Yes. And is, are, are individual exceptions capable of, uh, creating venture returns on a individual company basis? Probably not. Now, like, there's exceptions to that rule, right? If you put 100K into the, the best company of a generation, it was likely a good decision. So, you can fake rationalize the math version of that answer, and you can logically rationalize a handful of other directions as to why that is a logical decision. I think, um, it's easy to put up rules. It creates consistency and it aligns to fund math, and I appreciate that. But we true- we truly hold to the idea that we wanna invest in companies we're excited about, and if what we're able to invest is not in perfect alignment with the math, we're willing and able to make exceptions.

   9. HSHarry Stebbings7:21

      Do you worry that by having that stance and being open in that way, I can say to founders and everyone else can say to founders, your Frankels of the world, your IAs of the world, "We love David. He's awesome." Which I'm sure we all do. "But he'll take 100K. Like, let's push him down. Like, we can get him down to n-" And so, the messaging means that you're saying I will be able to go down, and that's something that I'm always very caref- I'm, I'm asking your advice here, honestly, David. I'm not arguing 'cause-

   10. DTDavid Tisch7:48

       Yeah, do I worry? I worry about everything. But like, I'm focused on founders more so than other VCs, and I think if we can build a brand and a reputation with the founders that we're fortunate enough to work with, their goal is gonna be to give us, uh, an aligned amount of allocation in a round and not treat us in, in sort of that, um, you know, pushy way. And I think there's a history that's 13 years deep of BoxGroup building great relationships with founders where, uh, people want to work with us and won't take that, uh, approach to it. And, um, it tends to be when we're late to a company and there's not a lot of allocation left that flexibility matters more so than other VCs pushing us around.

   11. HSHarry Stebbings8:39

       Uh,

4. 8:40 – 25:45

   Price Sensitivity at Pre-Seed and Seed

   1. HSHarry Stebbings8:40

      can I ask, you know, one thing that I think is, is troubling is like, almost 100K or 250K in the generations of our band, you know, me, well, you were a little bit before me, but I was doing this eight years ago. Like, you know, it was the, the, you know, 5 to 10 million pre-seeds and seeds. For the last five years, we've seen 25 million seeds, and then the 100 and 250 is really very different. I- it, it's just hugely different. Like, how do you think about price sensitivity at pre-seed and seed? Do you take the same less if, uh, hey, it's fine? Or are you much more sensitive there?

   2. DTDavid Tisch9:11

      Yeah, look, our, our goal is to invest as much as we can in the company that, that we're excited to invest in. And it's not maximizing check size, so we write a 500K, 750K, million dollar check. We do that as the core of our business. It is a target in the majority of companies that we're able to work with. Valuation is the second piece of that, so you, you get to ownership in each company through those two basic numbers. Is there a m- a strong rule on any of this? No, but on a portfolio basis, we find a balance of all these things. Valuation is not something that as an A, A investor you actually control. I, I just don't believe that. The market as a whole controls that. So, if a founder gets enough optionality for their round, that they're able to raise at a valuation that you as an investor don't like, you have two options. Invest or don't invest. It's, it's a binary... If, if you get the opportunity to invest and this is the deal, you can say yes or no. And so, I can sit here and complain about valuations, but if I'm a founder, my job is to build a company that is a lot bigger than whatever valuation I'm raising my seed and pre-seed at. My job is to take the capital and create immense value so that the next round and the next round are, are bigger. If a company goes well, the pre-seed, the seed, those are the lowest points that you're ever going to be able to invest in a company at. Would I like to own more of our, of the best investments we've ever made? Would I like for us to have written a bigger check or, eh, you know, the valuation to have been cheaper? Sure. But that's not realistic. And so, you, you have to be, more than anything, patient and long-term and consistent. And when I look at our business, those are the three things that we hold true to. And on a deal-by-deal basis, you know, valuation is a fact and not a pain.

   3. HSHarry Stebbings11:27

      I think I love this debate, and you don't. (laughs) But like-

   4. DTDavid Tisch11:32

      I don't know if it's a debate. I just-

   5. HSHarry Stebbings11:34

      It's a debate because 500 to 750, David, means that if you write 100 checks at 750, which you're not, you're at 75 million deployed. Okay, so say 127, take out fees, we're at, say, 100, just like total. Um, and so, you've got 100 companies and you're only at 75 million deployed, and what then? You've got 25% left for reserves. Like, is the fund not too big?

   6. DTDavid Tisch12:00

      My fund's too big if I can't produce outlier returns, right? That's my job.... so I need to produce outlier returns. That's my, my responsibility to our investors, to our LPs, is to produce outlier returns. The way that we're able to do that is funding companies that have amazing outcomes. And the math works itself out. So, I, I don't obsess over the ownership and the portfolio construction in a way that I think it matters on a deal-by-deal basis. I think it matters on a portfolio basis. And so, if we... The, the perfect alignment is we own the most ownership in the best companies in that given fund. That's the goal.

   7. HSHarry Stebbings12:54

      I understand in some ways, but then I'm also looking at a lot of outcomes and bluntly, you have a billion dollar outcome, a $2 billion outcome, and actually when you only return 10 million or 20 million, really who gives a fuck? Sorry, sounds awful, but when you've got 120, just doesn't make a difference. And so-

   8. DTDavid Tisch13:13

      No. Our, our belief is that if a founder is able to build a company from the seed stage to a billion or $2 billion outcome, there's gonna be a lot of people that that's a life-changing outcome for. And those are the, the journeys that we're signing up to be part of. And, uh, I don't view it as, as a dismissive outcome. Can I build an entire fund off of, um, billion, $2 billion outcomes? If there's a higher- high enough percentage of the companies that we invest in that end there, sure. But, like, is that the ambition when we set out to deploy capital, that that's the target outcome for every company? No. We need to have and hope to have some outcomes that are bigger than that. And so, um, not dismissive and deeply appreciative of, of... You know, you're investing whether, in your world and, and your numbers, at $25, at $50 million entry points or at $5 or $10 million entry points. That founder that embarks on that journey, exiting at a billion, $2 billion, as long as they didn't raise an egregious amount of capital and get offensively diluted along the way, they're gonna have a wonderful day and they're gonna have a wonderful life-changing moment in that journey, and that's what I'm here for.

   9. HSHarry Stebbings14:34

      I get you. I didn't mean it dismissively, but I do mean it mathematically for fund returns, which-

   10. DTDavid Tisch14:39

       I'm a seed investor. I don't... Uh, you know, we're here for the dreams.

   11. HSHarry Stebbings14:43

       (laughs) Uh, I ca- I ca- But okay, hit me. Reserves-wise from the fund, how much do you have in reserves?

   12. DTDavid Tisch14:52

       You wanna put as much money as you can into the best companies in the, in the portfolio.

   13. HSHarry Stebbings14:58

       I'm... O- okay, but like how many-

   14. DTDavid Tisch15:01

       That's it.

   15. HSHarry Stebbings15:01

       So like-

   16. DTDavid Tisch15:01

       You have two... Like, like the math has to work. It's my job to make the math work, right? Like, somebody is investing in our firm because-

   17. HSHarry Stebbings15:11

       But that doesn't seem to be much math We need to make the math work. ... of a... It doesn't seem to be much math other than just like, "Well, let's just invest in the best founders." Well actually, yeah, but actually also, Dave, like the thing you study in venture, which you know this I'm sure, is in the good times, yeah, let's, like, invest in the best founders. And that works when you're shooting in good times and it's 10X funds and everything's great. But in the bad, bad times when you do the studying, actually the intense portfolio managers are the difference between 1X or 0.7X and 2X because they've religiously managed a huge amount from reserves, liquidity, and everything in between, and so-

   18. DTDavid Tisch15:50

       But are we in the bad times right now from a seed investing standpoint?

   19. HSHarry Stebbings15:54

       I, I think we will be, yeah.

   20. DTDavid Tisch15:56

       From seed investing though?

   21. HSHarry Stebbings15:58

       Y- yeah. I think '21-

   22. DTDavid Tisch15:59

       But my, my job is to fund, you know, a 10-year journey, and so the macro change in the, in the environment impacts our prior investments-

   23. HSHarry Stebbings16:10

       Uh-huh.

   24. DTDavid Tisch16:11

       ... much more so than our future investments.

   25. HSHarry Stebbings16:13

       Te- tell us-

   26. DTDavid Tisch16:13

       A seed round tomorrow becomes relevant in the, you know, customer side of the market in the next one to four years. It becomes relevant in the venture market in the next one to three years to raise another round.

   27. HSHarry Stebbings16:29

       Mm-hmm.

   28. DTDavid Tisch16:29

       So the macro of today doesn't have this immediacy in terms of its impact on our seed business and our, our deployment of the fund.

   29. HSHarry Stebbings16:40

       Well, when you-

   30. DTDavid Tisch16:40

       Does it have a, an impact-
5. 25:45 – 33:02

   Advice to Founders on Company Valuation

   1. DTDavid Tisch25:45

   2. HSHarry Stebbings25:45

      I think the thing that worries me is, um, actually the misalignment in expectations on pricing, and I know you said how pricing, oh, like, we- we're not the ones that set them, whatever. Uh, (laughs) we disagree on a lot, David, but, but we'll just go with this. Like, founders are coming in still and they're going, "I want 20, 25." And it's like, are you seeing the market? Like-

   3. DTDavid Tisch26:06

      If somebody gives them that, then the market is that, right? So-

   4. HSHarry Stebbings26:10

      But it's then no-

   5. DTDavid Tisch26:10

      ... everybody can ask for... But everybody can ask for whatever they want, and everybody can say yes or no. That's the way this business works and-

   6. HSHarry Stebbings26:17

      But then-

   7. DTDavid Tisch26:17

      ... at the end of the day, at the end of the day, if somebody says yes, that's the price.

   8. HSHarry Stebbings26:22

      Sure, but it's bad advice. Like, I- I- I would not want people to hear this and go, "Oh, I..." Like, if what I would say to founders is actually, "Hey, go out with 12 and a half or 15." And you know what? If me and Dave both want it and so does Albert and so does David Frankel-

   9. DTDavid Tisch26:36

      You're gonna get 25.

   10. HSHarry Stebbings26:37

       ... you're gonna get 25, but don't start at 25 'cause I'll say, "Thanks so much." No.

   11. DTDavid Tisch26:43

       But that's the, that's the choice you made and that's the choice the founder makes, and if the founder wants to go talk to 200, 300, 400 seed funds, which there are these days, and one of them says yes and gives them money at 25. So there's, like, three variables, right? It's, it's how much money are you raising, at what price, and from who? And you can optimize, try to optimize all three. You can try to optimize one or two. And I think each founder takes an approach that's specific to them to each one of those variables. And so, if I were starting a seed company, I would try to optimize all three. I would get as much money as I need/can at whatever price I can from the best people that I can raise from, and I think that that is the job of a founder in each round, is to think about those three variables and try to optimize the ones that are most important.

   12. HSHarry Stebbings27:39

       David, which one would you let slip? You can only have two.

   13. DTDavid Tisch27:44

       Um, it matters the gap between who, uh, if you're talking about, you know, like, my top choice versus my fifth choice, that's a fine compromise. Versus, um, you know, my top choice versus my hundredth choice, that's not a fine compromise. So I think, you know, figuring out who you want to work with is vital, so I'd actually put that as the most important, but I think a bit fluid in it's not a perfect, like, you don't just pick one person. So I, I would not over-optimize for a single person, but I would put that first. The second is, how much money is vital. You need enough money to make enough progress, to hire enough people, to, to use that capital effectively, uh, to build your company, and the third is price. So, I think you end up having and, and should compromise on price if you can get the other two right.

   14. HSHarry Stebbings28:40

       Yeah. No, I totally get you. Um, uh, but just, like, sorry, whether it's... It's not opinion-based, this is pure stats, so don't... Are you seeing prices reflective of the change of market? Because I'm not seeing seed and pre-seed pricing go down in the way that people would think or expect.

   15. DTDavid Tisch28:57

       I agree generally with that. I think there's too much, you know, sound bites on Twitter saying, "I'm seeing, you know, crazy cheap valuations." Um, it's just not, uh, the experience.

   16. HSHarry Stebbings29:09

       I'm like, 'cause, 'cause you're funding these shit companies, yeah.

   17. DTDavid Tisch29:12

       Yeah, uh, basically. Um-

   18. HSHarry Stebbings29:14

       (laughs)

   19. DTDavid Tisch29:15

       ... uh, you know, we're seeing a bifurcation of the market. I think the biggest thing that happened and will really happen again, uh, I think people are trying to isolate '21 and, and, you know, the first part of '22 is equally frothy as this standalone period, but it started before that. So, I would go back to, like, 2018, '19, and then into '20, which was this weird year with COVID and, uh, sort of the shift to, to Zoom. Um, but the multi-stage firms have a product for seed that changed the market. They write a $5 million check at a $20 to $30 million valuation, pre or post. So, and that $5 million check could be seven, so you're seeing rounds of five to seven at 20 to 30, pre or post, and that's a product that hasn't changed, and I don't think it's going to change, and I think it totally evolved the seed market to say, are you raising from a multi-stage fund? If so, that's the style standard deal that you can go get. And if you're not raising from a multi-stage fund, there's a different deal on the table. That's a $2 to $4 million round. Maybe you can stretch it to five, and that's being done at a 10 to, you know, uh-... $15 million valuation. Uh, but single digits, uh, you know, it's not- it's not the norm. Now at the same time, if you're early enough and at the sort of friends and family as it's called, or the angel round, there's a different structure that round. But it comes back to this, how much money, price, and- and who, um, do- do you think you could f-

   20. HSHarry Stebbings30:47

       And I still, do we, do we still have those angel and friends and family rounds? 'Cause when, sorry, just when I see people spin out of any great company-

   21. DTDavid Tisch30:52

       It matters who, right? Not that person.

   22. HSHarry Stebbings30:55

       Yeah.

   23. DTDavid Tisch30:55

       That person who's spinning out of a company with a great reputation in reality can and should go get, you know, a- a bit more money because they have a different track record than the person who is totally unproven and needs to get some capital to show th- their idea and their ability to build the thing they want to build is realistic. And so-

   24. HSHarry Stebbings31:20

       That- that my single worst investments, those are my worst ones, when they've spun out of any great company and they've raised five to seven. 'Cause they inherently slow because they used to the processes of Twitter, of Facebook, the HR, the policies. And then they come out and they're given $7 million by Andreessen and 20 others, including me, and they don't need to hurry. They can go back to the processes of Facebook and Twitter. They don't need to have sprints like they do in normal startups. That's just slower. And-

   25. DTDavid Tisch31:48

       I think it's all, I think, I, like I hear you, I just think you're overly generalizing everything. There's- there is a cohort of companies that come out of big companies that raise very healthy seed rounds that are gonna build great companies. And there are a lot of companies in that category that are not gonna be great. That's the inevitability of- of the world that we invest into where there's going to be more failure than success.

   26. HSHarry Stebbings32:16

       I get that.

   27. DTDavid Tisch32:16

       That- that's the math, right? There will be more failure than success. And in each of those journeys, there's a team of people that had a dream that it didn't work out. And I think the, like, the venture conversation removes that emotional and psychological hit that the founders and the early employees take from a failed journey. And I try very hard in our business not to trivialize that, because I think it's important to not, again, take my business and make it a founder's problem.

   28. HSHarry Stebbings32:51

       Yeah. Yeah. I mean, I, I- I agree. You're right. You're right, David.

   29. DTDavid Tisch32:57

       Thank you. Finally, we got there.

   30. HSHarry Stebbings32:58

       Um, no, no, (laughs) we- we got there in the end. Um, I- I

6. 33:02 – 39:58

   GPs and Seed Checks

   1. HSHarry Stebbings33:02

      do think the one thing that's different is like I'm speaking to a lot of GPs at multi-stage funds and they're going, "I'm underwater with board commitments to my series As. My re-up-"

   2. DTDavid Tisch33:10

      It's not stopping them from ripping those seed checks.

   3. HSHarry Stebbings33:13

      No, no, exactly. But what they're doing, David, in Europe at least, from my perspective, is they're saying to their principals, "I'm underwater, you go write the seed checks." And what's happening-

   4. DTDavid Tisch33:23

      They've been doing that for a long time.

   5. HSHarry Stebbings33:26

      It seems that-

   6. DTDavid Tisch33:26

      This is not new behavior.

   7. HSHarry Stebbings33:28

      It seems like it's being much more aggressive now.

   8. DTDavid Tisch33:31

      It's safer and easier to deploy a seed check if you have a huge fund than it is to write a series A or B check at this moment.

   9. HSHarry Stebbings33:37

      Exactly, so-

   10. DTDavid Tisch33:38

       But-

   11. HSHarry Stebbings33:38

       ... is it gonna get worse with their intrusion into seed?

   12. DTDavid Tisch33:41

       It's not even worse. It's been this way. I think the idea that it hasn't been this way and this is a net new thing is just totally incorrect. Like, since 2018, multi-stage firms figured out that the competition for series A is so steep and there's only one winner that if you don't take risk on seed, you might not have a shot at the A. And so they're, they've been slanting earlier for a long time. And if you talk to each one of these firms, whether it's dedicated capital, whether it's dedicated people, whether it's a- a certain amount of time firm-wide, um, they've been writing that $5 million seed round for long before the '21 period and- and long after this new downturn we're in.

   13. HSHarry Stebbings34:28

       So, you said there's two variables there in terms of the seed round. Totally agree with you. How would you advise founders, founders that listen, may have hundreds of thousands? What, which one's right for me?

   14. DTDavid Tisch34:40

       Amount of money, valuation, who. And if you go to a multi-stage firm and feel like they are the right fit for you in terms of who, I don't think it's, i- i- it's a general wrong thing to do. Like, there's not a generic answer to any of these questions. It's so founder specific. What are you working on? What are the capital needs? What's the background of the investors that you're working with? I do think it's important to surround yourself with a group of people, group, not individual, people that can be a bit different in their perspectives. What we do at Box Group and what we hone ourselves in on is being aligned with founders. We- we say we want to be a friend to the founder, and we mean that in the longest term, most authentic way possible. So, if you work with a multi-stage firm and they write the lead check, we're happy to be the second biggest check in the round. If you wanna work with a seed lead, a traditional seed firm, we're also happy to be the second biggest check in that round. If you wanna do a pre-seed or a small seed and you want us to write a term sheet and write a, you know, adorably nice check alongside a group of amazing angels, we're also happy to do that. And our job is to help you get to the next round, and then help you get to the next round and the next round. And in doing so, there's some operational stuff that an investor can help with, but that is always overstated. What we are world-class at is helping companies raise money because we live there and we've been doing that for a long time. And it doesn't necessarily mean if you raise from a multi-stage firm it's gonna be harder or easier, and it doesn't necessarily mean if you raise from a seed firm it's gonna be harder or easier. How great are you building?... your company. That is the core variable of what's gonna make your next round easier.

   15. HSHarry Stebbings36:36

       Do you agree with the signaling risks that everyone places? Everyone's like-

   16. DTDavid Tisch36:39

       No.

   17. HSHarry Stebbings36:40

       Why?

   18. DTDavid Tisch36:41

       Uh, because none of the next set of investors really care, 'cause every investor thinks that they have their own opinion, and they're right, and they're not really looking for someone else's opinion to, like, create their opinion. And the multi-stage firms don't care about the other multi-stage firm.

   19. HSHarry Stebbings37:00

       I, I-

   20. DTDavid Tisch37:01

       We're too deep in... The signaling risk, I feel like, is the single most overstated, uh, part of the, the ecosystem. I think, you know, series B and later, signaling risk matters. Maybe series A to B it matters a little bit. Like, if your series A lead is not doing their pro rata in your B, that is a material data point. But if your seed lead multi-stage firm is not doing it, there are ways to navigate that as a founder, and we are very happy to help you do that.

   21. HSHarry Stebbings37:33

       I, I, I actually totally agree with you on that. What I always say, actually, is the m- I know, but this is a... We should have a little... I don't know if we have a fake clap that we can (applause)

   22. DTDavid Tisch37:41

       Right. We have like, a clapping thing.

   23. HSHarry Stebbings37:42

       ... have at the sp- for them. Yeah, yeah.

   24. DTDavid Tisch37:42

       And we have some graphics. Exactly.

   25. HSHarry Stebbings37:44

       But, uh, yeah. The one that I, the one that I do say, which I do believe, is the incentive misalignment, which is like, me and you both want a great next round with a great price (laughs) for the company. If a multi-stage firm come in and lead the seed and it works well, they don't want to have a super high price on the next round. They wanna closet it and then take it into the trees themselves and get a good price.

   26. DTDavid Tisch38:07

       Correct.

   27. HSHarry Stebbings38:08

       Do you agree with that?

   28. DTDavid Tisch38:09

       Correct. And look, there's also a reason sometimes multi-stage firms are not gonna follow on. Let's say they buy 15% of a company in the seed round. Like, that's a lot. And so keeping pro rata at 15 might be good enough versus needing to get to 30, which is a lot of the company.

   29. HSHarry Stebbings38:28

       Yeah.

   30. DTDavid Tisch38:28

       Or, you know, 15 to 22 isn't this necessary optimization. And so I don't think it's black and white. I think every single... What I, what I've struggled with in my venture career is watching investors put out generic advice and founders read generic advice and assume that it applies to them. Every single company is very different, and each specific variable in that company drives to how to build it. And I think our job as, as, you know, early stage investors is to provide a customized service to founders. And so our... At Box Group, we spend a ton of time trying to understand all the dynamics at play and give very nuanced, specific advice and tactical advice, how to achieve that specific company's goals. The hardest part is when it's not gonna work, right? And I'm not here to kill companies. I'm here to provide, as best as I can, honest advice and do so with, you know, a goal of achieving success in whatever the next thing you have to do as a company is.
7. 39:58 – 45:30

   Which companies do well?

   1. HSHarry Stebbings39:58

      when you look at the companies that do graduate, I find there's this disparity between ones that I think will do very well in fundraising markets and then those that do where I'm like, "Wow, I wasn't expecting (laughs) that to do well in fund-" And do you... Are the ones-

   2. DTDavid Tisch40:10

      Because it's back to this generic thing, right? Like, every investor in the market has a different view of, of the types of people and the types of companies they're looking to back. And that's the... Like, venture gets viewed as an asset class, and it's not. These are all very small businesses with independent investment styles and independent investment beliefs. And so, you know, in some way, the best thing a company can do is go to as many investors as they can get in front of, because everybody's totally different. Just 'cause you're a series A or series B or a seed firm, there's such a, a uniqueness to each approach that the idea that we can predict perfectly, uh, a course is just a stretch. I do, at the same time, think what, what the meme and, and the sort of content world has done a disservice to founders, and I think we're sort of past this, is telling founders, like, "Put your head down. Build a product. Don't worry about fundraising. It's, like, distracting and annoying." The CEO specifically, their job is to become great at fundraising, and they need to be... Like, view that as a core competency that they should take responsibility for getting better at, learning, and become world-class at. And to your point, sometimes when you see companies raise a lot of money at crazy valuations, it's because the CEO became great at fundraising and pulled the company forward. Is that a net positive or negative? It's not black and white. It's a net negative if they can't execute and build a great company. It's a net positive if they can because you've done your job. You got your company money at a valuation that was not punishing to y- the dilution of not just you as a founder but to your employees as well, and that's a good thing.

   3. HSHarry Stebbings42:06

      So, how do... So, I'm, again, (laughs) pretty much in agreement with you. This is starting to feel nicer again. Uh, I normally only agree... It's only because, like, we know each other that I feel that I can, so-

   4. DTDavid Tisch42:15

      I would like you to disagree.

   5. HSHarry Stebbings42:16

      And now, and I-

   6. DTDavid Tisch42:17

      I came here to spar, but no.

   7. HSHarry Stebbings42:18

      No, but I, no, but I agree with you. But what do you advise founders? Do you say, like, "Meet five"? 'Cause I also don't want... Like, I don't want my founders to... Man, we both have hot companies. They get, like, 50 inbounds. I don't want them that distracted. I want, like, a honed, tight messaging, don't give away too... But, like, how, how do you advise them? How many... The right way to play it?

   8. DTDavid Tisch42:37

      We don't say my companies. It's their company, so I think first off is just, like, h- listening to them. "What do you want? How much time do you wanna spend on this? How much risk do you wanna take in this process?" So, understanding their psyche is super important, and so a lot of the time, the beginning is, like, "What's your style? How do you... Where are you going to excel? Are you distracted by 50 conversations?" There are certain founders that are not, and that's al- that's a strength for them. It's a weakness for other people that then you shouldn't push them to do. And so, I think it's really helpful for us to, again, view each journey, each company, and each step in the process as very specific. We... I believe very strongly that founders should consistently be building great relationships at every step of the way on their journey in every single category. So, h- like, long-term potential customers, long-term potential partners, long-term potential acquirers and long-term potential investors. There is no reason why... I mean, Mark, Mark Suster, uh, you know, wrote that blog post years ago-

   9. HSHarry Stebbings43:54

      Line, not dots. Love it.

   10. DTDavid Tisch43:54

       ... Invest in Lines and Not Dots, right? And it's that core view of, of how the world works of, like, in '21, that frothy moment that we love to isolate, everything became transactional. And you could show up one day, meet six firms and have six term sheets, and everybody spent about 18 minutes making that decision. The transactional shift happened because of speed and panic. Is that how life should work? Probably not. It's not how our business should work and it's a disservice to founders because they don't get to know the people that they're transacting with other than by back channel reputation, and that's challenging. So, in a world where you're not optimizing for purely speed, the more you get to know somebody, the higher probability, if, you know, both sides like each other, there's a deal to be had. And I view that the same way in venture. So, I don't overly arc, uh, orient towards, like, "Don't talk to investors until you're raising" or, like, "Ignore all the inbound and play hard to get." Like, if you wanna get to know somebody, get to know them, and if it's not gonna be, like, this massive distraction to you to have breakfast one day, which you're probably gonna have anyway, have breakfast.

   11. HSHarry Stebbings45:26

       Uh, oh, okay. Do you think... Y- you've spoken a lot about kind of

8. 45:30 – 52:00

   View on Marketing and Listening to Experts

   1. HSHarry Stebbings45:30

      the generic nature of content. Uh, I am a producer of such generic nature of content.

   2. DTDavid Tisch45:35

      Yes.

   3. HSHarry Stebbings45:35

      Um, you probably hate it. Um-

   4. DTDavid Tisch45:38

      Do I have to listen-

   5. HSHarry Stebbings45:39

      ... is n-

   6. DTDavid Tisch45:39

      ... to... No. Um, I don't have-

   7. HSHarry Stebbings45:40

      Well, no, no, no, but-

   8. DTDavid Tisch45:40

      I don't hate it. I think what I don't-

   9. HSHarry Stebbings45:42

      No, no, no, no, but I, but I'm-

   10. DTDavid Tisch45:43

       Yeah.

   11. HSHarry Stebbings45:43

       ... saying like, do you blame this generation of an inves- 'Cause I genuinely just wanna help-

   12. DTDavid Tisch45:48

       No, I'm, I'm, I'm, I'm very-

   13. HSHarry Stebbings45:50

       ... how many founders are grateful-

   14. DTDavid Tisch45:51

       I am-

   15. HSHarry Stebbings45:52

       ... and I don't wanna hurt them.

   16. DTDavid Tisch45:53

       I think it's risky for founders to listen to things that are not specific to them and believe them and take them to heart and act upon them. That's totally decoupled from you building a business, a content machine, and creating content. I think the value of that content creation for the investor is enormous. You get brand recognition. You get deal flow. You get people valuing your distribution channels. They'll wanna let you get into companies that are hard to get into because you can help them grow audience. Those are incredibly valuable things. Again, we decoupled the message from the value and that, I think, is my, my point of, like, don't... My... I played, uh, hockey in, in high school and my hockey coach was a, uh, amazing man who taught me a lot of lessons. And there's a quote that, uh, you know, I, I live on, which is, like, "Don't believe everything you read in the newspaper."

   17. HSHarry Stebbings46:57

       Totally agree with that.

   18. DTDavid Tisch46:58

       And I view TikTok, I view podcasts, I view, you know, blogs and Twitter as, in essence, a newspaper, and I think it's important just not to believe everything you read in the newspaper. And I think it's hard when you are a operator and you see someone in a space or someone you know raise some crazy round at some frothy p- price and you're like, "Look at what they did," let's get to the details. There's probably more, more backstory to whatever you're reading.

   19. HSHarry Stebbings47:26

       No, I totally agree. I think it's about having the self-awareness to go, "Actually, that bit was really helpful. The rest, not so much, and that was probably a little bit too much in that capacity for me."

   20. DTDavid Tisch47:34

       Here's what I will take, I will-

   21. HSHarry Stebbings47:36

       Yeah.

   22. DTDavid Tisch47:36

       ... apply to me and I will take and not just do it, but I will process it and do it in my way, in my style that's customized to me.

   23. HSHarry Stebbings47:44

       Yeah. And I, like-

   24. DTDavid Tisch47:46

       I, I... You know, I... The other, the other line that I talk to founders a lot about is, like, make... Like, you know, you watched the Facebook movie, which is inspiring and, like, people can say it's a good movie, bad movie. It's, like, amazing, like, doesn't e- everybody wants to, to have that s-

   25. HSHarry Stebbings48:01

       Man, that's why I became a VC.

   26. DTDavid Tisch48:03

       Yeah.

   27. HSHarry Stebbings48:03

       I was 13 when I saw Peter Thiel invest in Facebook from a-

   28. DTDavid Tisch48:06

       Yeah. It's, it's the... To me, it's the most magical story of our industry. And, like, you can be overly critical, but like, that's, that's the goal, right? But make your own movie. You know what you're not gonna do? You're not gonna replicate that movie. You're not gonna replicate anyone else's movie. So, figure out what movie is yours and make that. And do that from minute one. So, you are taking such a bet when you start a company on yourself. You're saying, "I know something nobody else knows," or, "I'm gonna do something better than everybody else." And then you start listening to outsiders and you start hedging that bet.... that risk. You already took the risk. Don't hedge it. Just keep compoundingly betting on yourself, take advice, learn, iterate. But don't compromise the bet on yourself 'cause that's the binary thing that you did that you should lean into.

   29. HSHarry Stebbings49:04

       You know, David, one of my biggest mistakes that most of me, I think, probably many years was, I, I worked with investors who are much older than me, and very brilliant investors. But I thought I had to be like them. I spent hours doing cap table construction, and doing all this shit at cohort... Not, like, not shit, but you know, skills of cohort analysis and all the deep work. It's just not me, David. Like, it, it's not my-

   30. DTDavid Tisch49:25

       Well, you, you spent the first half of this podcast telling me why my model sucks because everybody else's model's different, right? And so, in some way-
9. 52:00 – 57:25

   Lessons on Recent investments

   1. HSHarry Stebbings52:00

      or generic, but this is just you, so you can say, uh, is there any lessons that you have from seeing how you invested over the last few years and what you've taken from that period?

   2. DTDavid Tisch52:10

      As entrepreneurs and founders, I think the lessons is that starting a company is hard. It's hard in, in every single market, because the market is inconsistent. And so even if you start a company in a hot, frothy market where you're getting over-funded and high valuations, it doesn't mean that's gonna be the status quo for the extent of the company, and things change. And it's really hard. And you're going to go on those ups and downs. There's almost, if, if any, uh, company that's ever just sort of went up. And I think going in eyes wide open to knowing what you're signing up for is important. And just 'cause you can start a company doesn't mean you should. Um, you should start a company because that's something you're gonna see through all the way. Um, so I think that's, to me, it became very easy to raise seed funding and to start a company, and everybody got to do that, and I don't think people went in as eyes wide open to the challenges that they were signing up for, and I think it'll end in a lot of, uh, failure. Uh, on the investment side, um, it was very hard to not be transactional. And speed became a core tenet of the market, and it was at every round, and so seed A, B, were happening in hours to days versus weeks and months. And, um, we, we participated in that because that's the game on the field, but the transactional nature of, uh, the industry, um, it's not the most fulfilling way to do this business. It doesn't lead to relationship building. And it's not that we wanna be best friends with every company that we invest in. It's that we want to get to know you so we can try to help you, and we want you to get to know us so you can know how to ask us for help. And when you're doing things so quickly, a lot of that authentic, actual deep relationship building, that I think is fulfilling, it's fulfilling either, um, you know, emotionally or psychologically, but actually long-term it, it allows you to feel support, um, that got removed from the industry for a bit.

   3. HSHarry Stebbings54:31

      You mentioned the transactional nature. When did you raise the last set of funds?

   4. DTDavid Tisch54:35

      2021.

   5. HSHarry Stebbings54:37

      Okay. How fast will they be deployed? Two-year fund cycles?

   6. DTDavid Tisch54:41

      We are trying to be super responsible with our LPs' capital.

   7. HSHarry Stebbings54:46

      So, three years?

   8. DTDavid Tisch54:49

      You know, I think we, uh, the hardest part of a seed model and a non-concentrated seed model is the reserves. We've come full circle. So how much of the fund makes sense to reserve? And when the initial dollars are deployed up to that percentage is when we need a new fund. And so what I've seen happen over the past couple quarters is there's been a slowing of what we view as, like, opportunities that we're excited enough to invest in at the seed stage. And so our deployment, uh, capital per quarter has gone down. Um, I need to see it play out over the next couple quarters to know when it makes sense to switch to the next set of funds.

   9. HSHarry Stebbings55:36

      For the opportunity fund, how do you do the upside scenario planning there? Is it like, "If we can project out a 5X, then we'll engage"? Is it a- a 3X, a 10X?

   10. DTDavid Tisch55:45

       Every, every single investment out of our opportunity fund needs to be able to have a outlier outcome because it's a net new investment. It's not attached to the pro rata of the seed fund, right? And, and so-

   11. HSHarry Stebbings55:58

       But w- what's an outlier investment though? Is that a fund return or is that a 5X? Is that a 10X?

   12. DTDavid Tisch56:03

       It matters what the risk profile is. It needs to have upside. So the whole fund can't be built off of underwriting a company to a 3X outcome because you're not gonna be perfect and it, that's out to 3X. And that's not, uh, the inherent goal. And so, um, it needs to have real upside. In certain ones you have unknown exponential upside, and other ones that are probably later and more established in, you know, an industry where you can get to a, uh, more predictable outcome are gonna have more confined upside.

   13. HSHarry Stebbings56:35

       Did you make LPs invest in the two alongside each other?

   14. DTDavid Tisch56:39

       The word make is such a, a strong word, Harry. I don't make anybody do anything.

   15. HSHarry Stebbings56:46

       Did investors invest in both alongside each other?

   16. DTDavid Tisch56:49

       Our investors are, uh, aligned with the strategy that we, uh, go after the, the business with. And I feel, uh, very much like our job is to have a business and a structure, uh, that aligns with LPs and, uh, find LPs that feel aligned with the way we're building our business.

   17. HSHarry Stebbings57:12

       You said align there. Um, you mentioned alignment a lot between VC and founder. Um, (laughs) you've also made me look like a shithead VC in this interview. You seem like a-

   18. DTDavid Tisch57:21

       You do you, dude. I'm doing me.

   19. HSHarry Stebbings57:23

       You do you. (laughs)

   20. DTDavid Tisch57:24

       (laughs)

   21. HSHarry Stebbings57:24

       Um,

10. 57:25 – 59:02

    VC / Founder Alignment

    1. HSHarry Stebbings57:25

       okay, but you said about alignment. There are some areas where VCs and founders are not aligned and I think it's important that founders know them. Like, where do you think the most prominent areas of those would be?

    2. DTDavid Tisch57:37

       My job is to work for founders. We get upset when founders are, uh, dishonest or, um, renegotiate agreements.

    3. HSHarry Stebbings57:48

       Yeah.

    4. DTDavid Tisch57:49

       Those are the areas that I find to be upsetting and not what I signed up for. Uh, we are honest with who we are, how we work. We put our word first and we try to live up to that, and I like to work with people who do the same.

    5. HSHarry Stebbings58:08

       I agree. And that's it? Like, I always say, like, liquidity is, like, you know, there's sometimes-

    6. DTDavid Tisch58:13

       Nope, not my problem.

    7. HSHarry Stebbings58:15

       Nope?

    8. DTDavid Tisch58:16

       No. On a, on a portfolio basis it's my problem. On an individual deal basis it's their company and I'm here to support them, and we truly live by those words. Can I give them advice? Yes. Is advice meant to be listened to? No. It's not my job to tell a founder what to do. I can s- give strong advice, but it's their company. And again, like, I respect that structure of the relationship.

    9. HSHarry Stebbings58:45

       A final one before we do a quick-fire-

    10. DTDavid Tisch58:46

        The mistake is gonna be much more costly to them than it is gonna be to me.

    11. HSHarry Stebbings58:52

        I totally get you there. Uh, I think not enough VCs talk about the portfolio approach versus the single company approach. Um, a final one before the quick-fire 'cause David, I could talk to you all day.

11. 59:02 – 1:04:49

    What does Venture look like in 5 years?

    1. HSHarry Stebbings59:02

       What does venture look like in five years in your mind, in the early stage? Do we see, like, the even further productization of multi-stage fund money at seed? Do we see the Tigers and Co2s come there as well and do it also? Uh, do the boutiques survive? Help me. What does that-

    2. DTDavid Tisch59:18

       I thought the crossover funds were coming to seed imminently if the market maintained the up moment that it was having. So I think if you didn't have the turn of the market in '22, you were going to see enormous amounts of capital pointed at seed. Whether that was good, bad, or, or right or wrong, we didn't get to see that play out. I think the multi-stage firms have, as I said, uh, been doing seed for a while, will continue to do it. Um, there will probably be less investors because I think what this has done is push out the tourists, and I think the tourists were dangerous and the tourists were not here for the long term and that was capital that doesn't make sense for founders who are here for the long term to be working with. And-

    3. HSHarry Stebbings1:00:08

       Who are the, who are the tourists?

    4. DTDavid Tisch1:00:09

       Wha- Whether the tourists were crossover funds that came in just because the numbers looked good and wanted to grab onto that, it's people that are, are... You know, I go back to USV. USV is the opposite of a tourist. They are so focused and long term in every single thing they do. They're consistent, they're loyal, they live by their commitments, and I have immense respect for the long-term nature of their business. And when I look at what we wanna do at Box Group, we are who we are, we are who we say we are, and we're gonna continue to be that. And that's the business we wanna build, and that to me aligns with the timeline of starting and building a company.And so investors who are, who are here, whether that's early stage funds that started and then, you know, funded things because they were going up, and now are getting nervous and questioning things. Like, or it's crossover funds that showed up at the last minute. I think you pointed out Tiger & Co. too, they're easy to criticize but they've been investing in tech for a long time. They've changed their model, they've changed their velocity, they've done things differently at points, but they're, they have been investing into private startups at, you know, a consistent basis for a long time. And so- David, I think, I think for their capital base and for their LPs, they will actually still perform to a averagely good level given they have different expectations, which is great as well. ???????. I'm not short on them, I think they'll be okay actually. Yeah, and so I- The tourists to me are the ones, the tourists to me are the ones who came in because it was hot and they felt that venture was cool- Correct. Correct. ... and they've got no fucking idea how to do portfolio construction. They wanna go to every drinks party with every VC in LA, they wanna talk to every other VC. Yeah. There's a bit more depth to that too of like, they came in 'cause it was hot and they're not gonna stick with it. And I think when you have investors who, you know, two years into your company's journey are no longer doing this business, I don't know, it's not the best group of people to have around the table. We are, uh, we are going to run, whether you like it or not, the same model for a long time. And I think what that does is it aligns us with founders who are also going to build their business for a long time. We are consistent, we're not gonna suddenly be a series A lead next year. We're not gonna scale the size of an entry point in where we focus our business, because our view is if we hold true to who we are, we're actually maintaining that relationship with the founder for the extent of the journey. David, I wanna move into a quick fire. I could talk to you all day. Uh, we had a mixture there. There was some agreement on this. We did great. We did great. It was awesome. Uh, okay. Ready to rock and roll? Yeah. What would you most like to change about the world of venture? I would like that the ability for founders who are treated unethically by venture capitalists to be able to confidently discuss that publicly. So act- not casual bad behavior, but actual bad behavior gets policed out. I think it's really important that we find a way to expose predatory behavior. And that's not aggressive valuations, that's not structuring rounds. That is harmful, hurt, uh, intent to hurt founders' behavior by VCs. I've never seen that, David. I'm not- I've seen that. You've never been around for these real downturns. And so when a company and a tier three shitty VC come together, bad things can happen. I saw a VC try to personally bankrupt a founder. That is unacceptable to me. And there are tactical ways that they do that, and when that happens my view is, I don't care if that company failed, I don't care how much money we as a fund lost. My job is to protect that human from bad actors. And uh, I wish that all of those examples got exposed. That's fascinating, because one of my problems is like, no VCs are actually willing to do the work because they're worried about poor MPS. I've had things where the company is actually doing terribly and we need to step in and help the co-founder.Like, we are helping you. I'm talking, I'm talking pa- way past the performance and into, uh, truly bad behavior. Do you think we'll see, do you think we'll see that come back in the next cycle? Yes. Hmm.

12. 1:04:49 – 1:10:33

    Quick-Fire Round

    1. DTDavid Tisch1:04:49

       What's the trend that you're seeing that others are ignoring, David? Uh, the, the trend to me that's most interesting is that people are bored with today's s- consumer products. None of them are fun. What's fun on your phone today? The fun has moved to content. Yeah. And content is TikTok, content is YouTube, and content is if you're, you know, into certain things, Discord or Reddit or Twitter or whatever those niches of the world, and you can call them communities, and sometimes they are, but sometimes they're just content. And in reality, content's always been fun. People have always watched TV. People have always watched movies. That time is actually still pretty consistent, it's just shifted into more diversified places where you are consuming content. And then you go back to the early days of mobile and the early days of the internet around connecting with people, and whether it's photo sharing or, or different versions of that, the social part of the internet, it feels like has become very boring and I long for the days when that gets exciting again. We are open for consumer social businesses. We would love to fund them. We get excited about them. And I think you're at a point where the generation, the 12 to, you know, 18 year olds, and then separately the 18 to 25 year olds have not experienced native products for them built by their generation that are fun. I did the pre-seed for BeReal. I would, I would give them a- You did a great job there. Thank you very much. But I, what I thought was interesting though was you had Antoine Martin at Zenly, who's obviously now starting a new company. You have a Mike and, um, Kevin at Instagram, and then you have Chad, and there was another, like OG of social who's doing it. So there's like this renaissance of the OG V1s who are coming back with V2s, which I think is interesting. (laughs) Um, I want to see the V1s too. So if there are new people out there who are starting something that are V1-... please, reach out.

    2. HSHarry Stebbings1:06:57

       Well, the trouble with the V2 is it's at 100. (laughs) Uh, tell me, who, if they send you a deal, do you take it most seriously? Who are you like-

    3. DTDavid Tisch1:07:05

       Sequoia. They're good at this business. I would take Sequoia. No. I mean, we take mostly founders in our portfolio who send us things very seriously because they know who we are and they're choosing to send things to us. And we appreciate that, and that, to us, is as strong of a sort of feedback loop as it gets.

    4. HSHarry Stebbings1:07:27

       What's the nicest thing anyone's ever done for you, David?

    5. DTDavid Tisch1:07:30

       Uh, my wife married me. That was nice.

    6. HSHarry Stebbings1:07:33

       (laughs) What's the secret to a happy marriage, David?

    7. DTDavid Tisch1:07:37

       Um, mutual respect and, and trust. It's trust, right? Like, implicit, deep lo- loyalty and trust and, um, it's pretty simple.

    8. HSHarry Stebbings1:07:51

       What- what's the hardest element of your role with Box today?

    9. DTDavid Tisch1:07:55

       Um, waking up tomorrow and finding the next deal. That's my job. I- I-

    10. HSHarry Stebbings1:08:01

        Do you re- do you really get FOMO when you miss a deal?

    11. DTDavid Tisch1:08:03

        Yeah, and I obsess over tomorrow and I spend less time on yesterday.

    12. HSHarry Stebbings1:08:08

        Does the FOMO help? 'Cause sometimes it can.

    13. DTDavid Tisch1:08:10

        Probably not, but I... Like, our job is to make an investment tomorrow and that's gonna be our job hopefully for the next 30 years.

    14. HSHarry Stebbings1:08:20

        What's the best investment advice you've ever received?

    15. DTDavid Tisch1:08:24

        Investors, invest.

    16. HSHarry Stebbings1:08:25

        (laughs) Uh, who's your f-

    17. DTDavid Tisch1:08:28

        Brad Feld said that to me when I was just starting my career, uh, and it stuck with me. I, I appreciate that line. My job as an investor is to invest. Pretty simple.

    18. HSHarry Stebbings1:08:40

        Who do you- who do you think is the most underrated angel in the ecosystem?

    19. DTDavid Tisch1:08:43

        I don't know if they're underrated. I think the Carlson brothers have, you know, built a investment portfolio that's probably, uh, quite unique and, um, doesn't get sort of discussed as, uh, much as some of the louder operator angels out there. Um, it feels like they, uh, just like in building Stripe, do things at this unique quality that, um, extends to all portions of their life.

    20. HSHarry Stebbings1:09:11

        What do you believe that few around you believe?

    21. DTDavid Tisch1:09:14

        I, I don't think geography matters for startups, and I think, um, you know, we're, we're based in New York because we live here and we wanna live here. And just 'cause we're based in New York doesn't mean that we invest only in New York. And Greg, our partner, lives in San Francisco because he wants to live in San Francisco. And I, I think geography gets overrated.

    22. HSHarry Stebbings1:09:37

        Final one, my friend. What do the next five years hold for you? Where's Box Group in 2028?

    23. DTDavid Tisch1:09:42

        I truly hope Box Group is exactly where we are today. We don't want to be different than who we are today because we have immense belief that staying consistent is the best way to hone in on being world-class at your craft. And so, this is our craft. Our craft is seed. We wanna be world-class at, uh, pre-seed and seed investing in people with dreams and ambitions who are going off to build, you know, 10, 15, 20-year and much longer term companies, and we would like to be there day one. And so, five years from now, I hope the answer is the exact same.

    24. HSHarry Stebbings1:10:21

        David, listen, it wasn't quite a duel or a fight to the death, but, uh, it was a discussion for sure. Uh-

    25. DTDavid Tisch1:10:26

        We had a great time, Harry.

    26. HSHarry Stebbings1:10:27

        ... I, I can't thank you enough, my friend. Thank you so much and you're a star.

    27. DTDavid Tisch1:10:31

        Thanks for having me. Appreciate it.

Episode duration: 1:10:33