The Twenty Minute VCKevin Hartz: "How I Lost Airbnb at Seed Because of an Exploding Term Sheet" | E1180
EVERY SPOKEN WORD
130 min read · 25,943 words- 0:00 – 0:53
Intro
- KHKevin Hartz
NVIDIA becoming the most valuable company on the planet is just the precursor towards the bubble of all bubbles. If you look historically over the decades, that if you just sit on all the companies, you know, and m- most will go to zero. Your power law winners will be so massive, they'll just dwarf everything else. I'm not in the practice of selling. I'm in the practice of finding and building companies and sitting on these things for life.
- HSHarry Stebbings
Ready to go? Kevin, I cannot believe that we have not done this in person before. First, it's wonderful to have you in London. Second, thank you so much for joining me today.
- KHKevin Hartz
Thank you, Harry. It's wonderful to be here in London.
- HSHarry Stebbings
That is so kind of you. And as I said, I love doing this in person. It's so much nicer for me. Dude, I think so much of
- 0:53 – 3:07
Childhood & Background
- HSHarry Stebbings
who we are is shaped by our childhoods. I remember when my mother got MS, and it really was, it was hard, but it was very defining moment for me. When you think back to your childhood, what was a really defining moment for you that sticks out in making you the person that you are?
- KHKevin Hartz
Harry, you know I always look for founders that have overcome some incredible obstacles or kind of moved mountains. And, uh, my childhood was fairly uneventful. I just had an idyllic childhood all the way through, you know, wonderful parents, um, and went on to Stanford University. I'd say I, I hit my kind of life sort of crisis or, or uncertainty post, uh, university.
- HSHarry Stebbings
What was that?
- KHKevin Hartz
I would just say I had a, a crisis of, of how I wanted to have an impact on the world. And very fortunately happened to be in the right place at the right time, and that is in Silicon Valley, uh, during this incredible first wave of technology innovation and the internet boom. And so I, I was lucky.
- HSHarry Stebbings
Can I ask you a weird question? But did you think that you would be successful when you were young? Often people have sometimes inevitability of success. They, they knew that they would be successful.
- KHKevin Hartz
Most, uh, f- people I talk to that are founders that have gone on always knew from the very beginning. And I would look up at my father, who is now a retired attorney, and I would say like, "Wow, how am I ever gonna be, do better than my dad? He's, he's a la- a partner at a law firm. Wow."
- HSHarry Stebbings
(laughs) I, I love that. And it also goes against the like, what you hear, which is like, "I always knew I would be in this inevitability," which is almost quite hard for people listening, because it's sometimes insurmountable. Do you know what I mean?
- KHKevin Hartz
It is. Um, and I think it wasn't a drive for success. It was a drive for learning and really not to be bored. And that's why Silicon Valley ... And Harry, when I say Silicon Valley, I'm no longer kind of referencing the geography. It's the wider technology ecosystem-
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
... is just, uh, so intriguing, so intellectually stimulating to, to all of us. It's like why we really do this.
- 3:07 – 4:16
Biggest Lessons from Peter Thiel
- KHKevin Hartz
- HSHarry Stebbings
I think, you know, your childhood shape us, but so do the people around us. And I spoke to Julia before the show, and she mentioned three people in, in particular who maybe shaped a lot of who you are and how you think, just from the time that you spent with them. One of them was Peter Thiel. And as I want to start on this, I'm a huge Peter Thiel fanboy. Um, what are your biggest lessons from Peter? And how did Peter impact your mindset?
- KHKevin Hartz
Yeah. I'm a huge Peter Thiel fanboy.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
It's, it's the things he, he says are indelible, like these ... H- he'll say things that maybe don't register at the moment, but then later on you'll really understand, you know, what it meant. And he just is somebody that he sees the world in, in a different manner. Uh, I, I would say that Peter, you know, like a lot of people at Stanford, is incredibly brilliant, but it's also that he just views the world under a different lens. And with that lens, he can kind of tease things apart and interpret things in a way, um, you know, that's ... when you look at an object or you look at, you know, one of these tests of an, uh, inkblot, he'll see something very different from
- 4:16 – 5:10
Biggest Lessons from Roelof Botha
- KHKevin Hartz
everyone else.
- HSHarry Stebbings
I spoke to Roelof last night actually, wh- we'll get to what he said, but I am interested. He's again, another, you know, hero of mine as an investor. Uh-
- KHKevin Hartz
Both South African, Peter and Roelof.
- HSHarry Stebbings
I ... Unbelievable what South Africa-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... exports these days. Uh, w- what did you learn from Roelof?
- KHKevin Hartz
Roelof was and is just always metered and always has sound advice. I, I don't mean to make him sound like a boring person or anything, but he is, um, you know, in the biggest crisis when, uh, you know, the ship is being thrown left and right, he, uh, is steadfast and calm. And you know, as Jeff Bezos said, "Is m- uh, always is mostly right." Um, so you know, somebody with s- such good judgment and insights, uh, and so worldly, uh, is absolutely somebody you want in
- 5:10 – 7:35
Biggest Lessons from Pierre Lamond
- KHKevin Hartz
your back corner.
- HSHarry Stebbings
Ab- absolutely is. The final one is Pierre Allamand, who, uh, is, uh, interesting one 'cause it's a different profile to both Peter and Roelof.
- KHKevin Hartz
Not South African. French.
- HSHarry Stebbings
T- totally. And also operator based.
- KHKevin Hartz
Y- yes.
- HSHarry Stebbings
So Pierre, what was the lesson there?
- KHKevin Hartz
Uh, well, Pierre, uh, is all about excellence and, you know, how do you up-level to be the, the greatest company, uh, and business and operator that you can be? And he, uh, always had extremely high expectations of everyone around him and the companies that he's involved with. And maybe to give an impression, because I think it's very applicable today, uh, when-He led the investment for Sequoia. It was, it was Pierre, um, and Roelof. Roelof was the junior partner, had just joined, uh, from PayPal and invested in, in Zoom. Um, and when he led that investment, we had our... we started to have regular one-on-one meetings. And in the very first meeting, I'll always remember, he said, "Kevin, I want you to go up to the whiteboard and I want you to write your direct reports down, but I want you to force rank them, you know, one to seven." Or how many it was. And so I, I go and I write the seven names down and he picks up the, he picks up the marker, walks over to the whiteboard, and he crosses out the seventh name and he says, "Fire that person." And it was, uh, a shock to me, but I do see what he was trying to get there. And that is that, um, excellence has to abound in an organization and it's, uh, uh, you know, it was no room for error. And he was sending a very powerful message by doing that.
- HSHarry Stebbings
That is such a good lesson. And just the seventh? I mean this in the nicest way, like, what about the sixth?
- KHKevin Hartz
(laughs) .
- HSHarry Stebbings
They're not really good enough either.
- KHKevin Hartz
They might have been crossed off later on-
- HSHarry Stebbings
(laughs) .
- KHKevin Hartz
... but we won't, uh-
- HSHarry Stebbings
You know, it's, it's funny kind of speaking about kind of the talent assessment there. You know, Roelof, your wife, many other people, founders that you've backed, said that Kevin's greatest trait is his ability to spot truly unique talent very, very early. I mean, this is from Roelof saying that you're the best in the world when it comes to this.
- 7:35 – 8:18
Kevin's Unique Talent Discovery
- HSHarry Stebbings
How do you identify true talent from people who are just pretty good at selling?
- KHKevin Hartz
You know, I will say a few things. Uh, I like kind of head shrinking, um, you know, teams and CEOs. I like, like you asked, I like to learn about their background. I like to hear what hard obstacles they overcome. And so I got a little embarrassed when you asked me about my background because I probably would have never, uh, given myself, uh, a check for like growing up in an easy, WASPy, white middle class American town with, you know, no hard upbringing in a town full of lawyers and real estate people and doctors, uh, versus, you know, people like Max Levchin that, you know, escaped from Eastern Europe and,
- 8:18 – 9:27
How Kevin Made His First Money
- KHKevin Hartz
you know, Chernobyl.
- HSHarry Stebbings
Let's play a game. How did you first make money? Did you ever do anything when you were young in terms of anything entrepreneurial?
- KHKevin Hartz
Um, quite a bit. Um, I did... Y- you know, I always had like a, a little shtick going and I wonder, you know, I do wonder where that came. In, in college-
- HSHarry Stebbings
How old were you? First one.
- KHKevin Hartz
Well, I mean, uh, I would say I was always kind of like selling things on the side in like my teens. But in college I actually had a Facebook business pre-internet. Oh my god, that's old.
- HSHarry Stebbings
(laughs) .
- KHKevin Hartz
Uh, it, it was called Faces in the Crowd and it was a picture book of students on campus. Uh, and, you know, we would get all the students' photos and we would get advertising from, you know, all the local places and then we would sell the books. And I think I should probably go after Meta at this point now, right?
- HSHarry Stebbings
Right.
- KHKevin Hartz
Is it time?
- HSHarry Stebbings
D- did you do well in school and did you enjoy school?
- KHKevin Hartz
I loved school. Uh, I loved learning. I, I had A- ADHD and had to take such a broad variety of classes of every sorts.
- 9:27 – 15:16
The Risk of Early Capital
- KHKevin Hartz
- HSHarry Stebbings
Okay. So it's interesting, you just said that you wouldn't have given yourself money, but like when you actually do the background test, which is exactly what I just did on you on Founders-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... like you would be smack bang in the middle of my, "I'll give you a check."
- KHKevin Hartz
Mm.
- HSHarry Stebbings
Why? Great entrepreneurs always start something early. No one starts something when they're 25 having come out of s- MIT or Stanford for the first time.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Always through their own entrepreneurial flair early. And two, you either hate school or you love it. People that are okay tend to not be great. Really interesting, the binary's where you get great. And then also like ADHD is another... You know it as well as I do-
- KHKevin Hartz
Oh, wow.
- HSHarry Stebbings
... clear sign of like the best founders have it. Can I ask you a weird one? And, uh, you know, I had Ara from ServiceTitan on the show last night. I had Daniel from UiPath on the show a couple of weeks ago.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
And they both said if they had got $5 million rounds in the early days, the business would not be what it is.
- KHKevin Hartz
Yes.
- HSHarry Stebbings
And I worry that we have too much capital too early-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... and that great businesses are being destroyed-
- KHKevin Hartz
Yes.
- HSHarry Stebbings
... by too much capital too early. Do you feel the same?
- KHKevin Hartz
We're vehemently a- in agreement. Uh, this is, you know, the challenge of our time. I feel there's like Boyle's Law as applied to capital. So, uh, if you raise a million dollar round for your seed company, you'll spend it and b- build a company with that million. But if you raise $5 million or $10 million, you'll spend it just the same and get to the same milestones.
- HSHarry Stebbings
Sure.
- KHKevin Hartz
And so, you know, it's, it's kind of like the capital, um, expands to fill (laughs) like the bank account, um, and is... but used in the same manner. And we're kind of awash with capital. So this is a period where we have, uh, so much capital, so little hands-on assistant in insights. And then, you know, we don't need like the '80s or '90s to come back where venture capitalists would like strangle f- founders and throw CEOs out of office after, you know, two quarters. But there's no checks and balances and so even the best founders, uh, have a lot of trouble when you have so much capital and so over- little oversight that you, you know, kind of drift a little bit. You don't have the same kind of tight discipline that you have if every little penny counts.
- HSHarry Stebbings
Do you think VCs add value?And when you say about oversight and governance, I get you from the fraud perspective, but on the trust side, I'm kind of like, "Listen, if I invest in you, I trust you." And I, I don't feel like that we need to be kind of the overbearing parent, being like, "Governance."
- KHKevin Hartz
I'd explain it, like, on a spectrum-
- HSHarry Stebbings
Okay.
- KHKevin Hartz
... and I'd put my two favorite peeps on each side. So I'd put Roelof and Sequoia on, on, you know, one side of the spectrum, you know, which is more hands-on providing services, providing, you know, oversight and insights and recruiting and everything else. And then Founders Fund and Peter on the other end of the spectrum, that's the belief that, look, if you're an E- Elon Musk or a Zuck, you just need the money and go at it and you'll figure it out. You don't need a p- outsourced PR team to help you with these things. You'll, you'll solve these. But, so th- given those two extremes, I actually lean more towards, uh, the Roelof Sequoia side, because I've just seen that kind of help and oversight and having that kind of star chamber of great talent cut so many corners of mistakes that would be made.
- HSHarry Stebbings
I agree. But that's just the brand. And like, when you get Sequoia Invest, there are fantastic people who are like, "Great, this is a stamp of approval. I want to join a rocket ship." And Sequoia Investing is a leading indicator of that in a lot of talents' mind. I don't think it's the talent teams behind it that make great teams for the companies. It's incredibly compelling founders who leverage the Sequoia brand.
- KHKevin Hartz
The lead director, however, does find, does help that founder match with, you know, those areas of, m- I wouldn't call it weakness, but areas of go-to-market or growth hacking or engineering or reliability. You know, just help to cut, uh, you know, just shortcut a lot of these areas that, you know, founders will make a few mistakes before they get right.
- HSHarry Stebbings
I would argue that very, very few great founding teams really truly stick together for a long period of time. I think Stripe and, you know, the Collisons is a great example of one that has done. But when you look at the majority of great-
- KHKevin Hartz
Stripe had ... You mean the Collisons had a love triangle? (laughs)
- HSHarry Stebbings
(laughs) Surprise. Uh-
- 15:16 – 20:40
Serial Entrepreneurs or First-Time Founders
- KHKevin Hartz
- HSHarry Stebbings
Do you prefer serial entrepreneurs or first-time founders? 'Cause I always favor serial entrepreneurs.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
Which is ironic given my age. But I'm like, you know, you make so many mistakes the first time around that you just avoid the next time and you can save so many dollars and so many hours learning the second time. What's your preference on serial versus first time?
- KHKevin Hartz
Well, I should be, you know, statistically focused on serial and we back a lot of serial founders, you know, like Chad Hurley and-
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
... um, you know, we've ... However, I just have a soft spot for first, first-time founders. I, you know, I just, it, it's, you know, the teens, it's the Bill Gates in his teens or Mark Zuckerberg in his teens or, you know, all those that's the first time around that, that it's, um, so spiky or they're really swinging hard. It's that age where, you know, y- y- you know, the army sends the Marines in and they're 18-year-olds 'cause they're fearless and they just really go for it. But it's also a period of creativity, um, you know, where I, I have to say I'm, I'm ageist, I'm ageist against myself, um, y- you know, where it's almost, uh, you know, the Nobel Prize winners have all been, you know, I think in- within a very constrained age range of creativity and insight and genius. Or The Beatles, you know, they, uh, broke up by the time they were 30 years old. And my goal is to kind of find, um, the Beatles of the, the tech world, those great teams and individuals and talents, the Paul McCartneys and John Lennons.
- HSHarry Stebbings
Can I ask a weird one? Why did you do Airbnb? At the time it was not obvious, you know, it's famed how many people passed and it's a weird idea when you can view it in isolation and put it in context of the time, which is people would let other people stay in their homes and they don't know them and that would be a business?
- KHKevin Hartz
Y- you know, these types of seeds, like the seed of Airbnb, the seed of Pinterest, y- you know, at the time, even seed of, of PayPal, you know, were very non-obvious. And in the case of Airbnb, you know, it was the passion. You know, we'd go over to, I think the loft was on Natoma or there was a street which ... Tehama maybe, uh, that, that Brian, Nate, Joe all lived together and they were building together and we'd go over and hang out with them and, you know, they were just working non-stop and, you know, and I, I think I, I mean, I like to think about Airbnb as kind of distributed storage, but not for bits or i- images or sound or video, it's distributed storage for people. You know, you can have a EMC big-... drive like on prem in your enterprise, or you can have things distributed and it's far more efficient and cost-effective, and, and so on. And when you think about Air- Airbnb, they built the kind of perfect massive distributed hotel throughout the entire planet, um, and, and what a wonderful business. And what it was, what they conceived in that, in those days their, uh, in their loft is, you know, what is here today, a massive scale.
- HSHarry Stebbings
Can I ask, how big a check did you write into the seed round?
- KHKevin Hartz
It was a fairly small check. Now, granted, we made them an offer. It was, I was angel investing and working on Eventbrite, and I was angel investing with Keith Rabois and Jawed Karim. And Jawed is the, uh, co-founder of, of YouTube. And, you know, we just fell in love with those guys, and, um, made them an offer. And, uh, Sequoia out- outdid us, uh, and got the lead. But, um, they, they cut us in nicely because, you know, Brian, Nate, and Joe seemed to like us, and, uh, Roelof as well.
- HSHarry Stebbings
Can I ask, do you concentrate capital on the way up? And was it an obvious winner from day one?
- KHKevin Hartz
We were able to put some amount of capital in the A that Reid Hoffman led, which thank you, Reid-
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
... um, uh, for, for making some room there. But then from our perspective, it popped so fast to a billion valuation at that time, in, you know, 2011 or '12, it, it just seemed like, oh, okay, it's run away from itself. So we almost n- we never really had the chance to concentrate capital, but... And mostly because it was such an efficient business, it just didn't require the rounds, um, that other businesses like, uh, you know, Facebook seemed to be raising quite a bit. And there was a lot of activity and a lot of secondary. In Airbnb, there was almost zero secondary.
- HSHarry Stebbings
Bummer. (laughs)
- KHKevin Hartz
Bummer. Well, I'm, I'm not complaining.
- HSHarry Stebbings
Well, it depends which way you wanna... Yeah, yeah, it depends which way you wanna do. Do you always hold? Do you ever sell? Like, my biggest mistakes the last few years, honestly, Kevin, were BeReal, Hopin, Clubhouse.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Uh, I could've sold in all of them.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
And I didn't. Any big lessons for you on, like, selling on the way up?
- KHKevin Hartz
I just kind of feel that, you know, if you look historically over the decades, that if you just sit on all the companies, you know, and most will go to zero, your power law winners will be so massive they'll just dwarf everything else.
- HSHarry Stebbings
Mm-hmm.
- KHKevin Hartz
I'm not in the practice of selling. I'm in the practice of finding and building companies and sitting on these things
- 20:40 – 23:45
Why Kevin Moved from Angel to VC?
- KHKevin Hartz
for life.
- HSHarry Stebbings
You mentioned the liquidity word there, and this is the thing that changes when you move from angel to venture fund. You know, you manage other people's money, often an institution's money. They have liquidity needs. And if it's your angel money, fuck it, let it ride. You know what? Fine. But if it's fund money, sometimes you'll need to show liquidity for the next fund.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Sometimes you'll have pressure from LPs to get liquidity back. There is a change in how one views liquidity sometimes. Not always, but sometimes. I, I'm just fascinated, Kevin, why did you move from angel to VC?
- KHKevin Hartz
I mean, I like a challenge. And sometimes venture people aren't so nice. Y- you are, Harry. Don't get me wrong, I liked, I, I love in, loved angel investing, but it's just time, you know, to, to graduate up to the big leagues. And, and that's kind of the, the story here. Probably not.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
Um, but will have to prove, uh, to the world that, that, uh, uh, y- you know, that we're worthy. So, back to, like, the, the Sequoia file, you know, uh, side of things is I love how Sequoia says, "We're only as good as our next investment."
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
And, you know, that's the mindset, is you just can't say, oh, back in Airbnb and Pinterest and, uh, what is that Jason Calacanis loves to talk about, his investment in Uber. (laughs)
- HSHarry Stebbings
I mean, I'm amaze... I didn't know he did Uber. That's such a surprise to me, Kevin.
- KHKevin Hartz
(laughs)
- HSHarry Stebbings
What I'm... Really, that's fascinating, um, what I used to listen to-
- KHKevin Hartz
We love Jason.
- HSHarry Stebbings
... him when I was running, and every time, like, you know, I'd be dying running, and then I'd hear, "You know, when I invested in Uber..."
- KHKevin Hartz
(laughs)
- HSHarry Stebbings
And I, I managed to, like, survive to laugh. Um, very funny. Um, (laughs) but you know, I respect him intensely for his duration. The, he taught me one thing that's very important in media. It's a simple game. You just have to survive longer than anyone else.
- KHKevin Hartz
Oh, my God. Has he ever.
- HSHarry Stebbings
As he has done. And it's just incredible. So, like, funny one there. Okay-
- KHKevin Hartz
He used to call me up per, uh, I, the reason I have to, like, throw him under the bus a little bit with the Uber, Uber stuff is he used to call me up, uh, at Eventbrite and scream at me, like, for, you know, he, he had a big rivalry with TechCrunch, and when we would ticket things for TechCrunch, he would get really angry and, like, just call me up and scream at me for doing that.
- HSHarry Stebbings
(laughs) that's very funny. So when we think about A*Star today, how big's the fund?
- KHKevin Hartz
Uh, we'll, we're, eh, we're in our second fund.
- HSHarry Stebbings
Okay.
- KHKevin Hartz
We're just starting to deploy it. We're a $300 million fund.
- HSHarry Stebbings
Mm-hmm.
- KHKevin Hartz
Uh, 600 million total under management.
- HSHarry Stebbings
Okay, so with $300 million fund, where, where, where are we in the stack? We're pre-seed and A?
- KHKevin Hartz
Uh, we are pre-seed and seed.
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
And, uh, then some B. You know, kind of this 70-30. Mostly seed, but then when we see a great B, we, we, we love getting involved.
- HSHarry Stebbings
Okay, so we're kind of this interesting barbell approach, where we kind of skip the A-
- 23:45 – 26:59
Market Sizing & Scenario Planning
- HSHarry Stebbings
Do you do TAM outcomes in all your planning? How do you think about that?
- KHKevin Hartz
There's always this discussion and people say, "Oh, TAM and TAN." You know, and, like, I th- I, I think it's this, like, brute TAM analysis is maybe overdone. I'd focus more on the teams. You know, great teams always find their way to kind of slingshot from-... a, a market from the small market to the big market, or it takes a small market to become a big, to get into a big market. So I, I, I think we, I think it, it's more of a qualitative, um, assessment in, in most cases.
- HSHarry Stebbings
I've got to be blunt. I think seed market right now is not a good place to be investing.
- KHKevin Hartz
Mm.
- HSHarry Stebbings
I find multi-stage funds have become so aggressive at seed and provide a good product-
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
... that actually it's a new enemy or competitor in many respects.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
We have incredible founders like the Collisons, like Dylan Field-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... like Daniel Gross, who are investing and creating a new class of competition. And then we have all the existing competition from traditional seed funds.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
And pricing is as high as it's ever been.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
Am I wrong? Is seed better than-
- KHKevin Hartz
That's, that's terrible. Nobody should go into seed. I would just, everyone should cease all operations investing in seed.
- HSHarry Stebbings
You, you j- you joke, but when 5 on 25 is the average entry, which it is for great companies-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... or great founders spinning out, that's a hard business to be in.
- KHKevin Hartz
Look, um, you know, without a doubt, we're out of that era where, you know, a active investment for certain traditional funds, you know, they had to own at least 30% or they couldn't be actively invo- you know, like, those days are, are kind of long gone.
- HSHarry Stebbings
Do you have ownership targets?
- KHKevin Hartz
We do. Um, you know, we try to be, we target the double digits.
- HSHarry Stebbings
Sure.
- KHKevin Hartz
But, you know, there's always the exception. As we all know, like, uh, w- we would rather be with a smaller ownership with an extraordinary founder than, you know, high ownership with a company that goes nowhere.
- HSHarry Stebbings
That's interesting. Do you worry about accepting smaller checks where you're not leads in rounds because then you'll be known to accept that? We have this internal debate always of like, do we need to lead every round or not? Because if you don't, your competition will use it against you and say, "Kevin's amazing, you should have him, but he does take smaller checks." And so he doesn't need to.
- KHKevin Hartz
Well, that's, you know, and so maybe I'll put a personal check in or something like that-
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
... but the fund, you know, we've got to lead or co-lead.
- HSHarry Stebbings
Do you think we can go back to an environment of cooperation? It feels much more sharp-elbowed.
- KHKevin Hartz
It's much more sharp-elbowed.
- 26:59 – 30:48
Are Operators as Investors Tougher on Founders?
- KHKevin Hartz
- HSHarry Stebbings
Uh, o- one kind of aspect, it's an interesting aspect, is that operators who are also investors, do you think it makes you more empathetic? Because I invest with a lot of amazing founders, and they are hard on founders.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Like, much harder than VCs are, because they're almost kind of in the chair. They're like, "Don't give me that-"
- KHKevin Hartz
Sure.
- HSHarry Stebbings
"... bullshit excuse for missing your revenue numbers. I miss mine too. Like, quit whimpering." And I'm like, "Whoa, I wouldn't s-" (laughs)
- KHKevin Hartz
Well, I mean, you know, m- a lot of venture investors are sociopathic, so that's part of the explanation.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
But... I kid, sort of. Uh, but-
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
... wh- what would I say about that? Um, empathetic, y- you know, look, what we've seen, I, I want to say that operators are the, the best and there used to be a vibe in the Valley that said, "Oh, you've got to be an operator to be an investor, a venture investor. You've had a walk in the shoes." And that's changed and you see a lot of, you see journalists become one, one of the greatest venture investor, Mike, Michael Moritz, um, slash-
- HSHarry Stebbings
I love-
- KHKevin Hartz
... Harry Stebbings.
- HSHarry Stebbings
Thank you so much. So, I (laughs) totally agree.
- KHKevin Hartz
And, uh, wh- what else have we seen? Um, y- you know, we've seen people just go, Bill Gurley come from what was banking, uh, you know, side of things. W- we, Jeremy Levine from Bessemer was, was always in venture. He never operated and he's been an extraordinary investor over the years.
- HSHarry Stebbings
It's an interesting one of like, what is the most successful entrance point? And is that just because of historical pathways of the... that's what it was? I think about Roger Aronberg at IA Ventures.
- KHKevin Hartz
Right.
- HSHarry Stebbings
Probably one of the best actually in terms of DPI at scale.
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
Um, I don't know if you know Roger, banker.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Gurley.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Banker.
- KHKevin Hartz
Banker.
- HSHarry Stebbings
Mary Meeker.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Banker. Don't know what Fred Wilson was before.
- KHKevin Hartz
What was Fred Wilson?
- HSHarry Stebbings
(laughs) I have no idea.
- 30:48 – 32:50
How Investment Preferences Shift from Angel to VC
- KHKevin Hartz
- HSHarry Stebbings
Have you found your mindset change on companies that you like moving from angel to VC? And what I mean by that is, like, you know, you don't always need the massive outcome when you're an angel, for example. Like, a billion-dollar company, if you get in early enough, great, fantastic, awesome. But when you're a VC, like, yeah, b- b- yeah, but actually that might not even return the fund. And sometimes the mindset really changes. Were there any core changes in how what you found attractive in an investment changed between being an angel and a VC?
- KHKevin Hartz
I think I've just been lucky to, I've always been around people that have extremely high standards, aspirations for, you know, n- far beyond just returning a fund. Um, and, y- y- you know, I just kind of turn off if, if ... I- it's great if somebody wants to build a nice-sized business and have a good cash flow and, and operate things, um, but, you know, we're looking for those extraordinary, outsized over, uh, uh, you know, outcomes and-
- HSHarry Stebbings
Do you think you can predict them? When you look at Bessemer's memos-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... you know, Procore was a $300 million company.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
It's now 10, 10 billion. Snap was a $500 million company.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
You know, Shopify went public at $700 and I think they sold it all at two.
- KHKevin Hartz
Mm-hmm. (laughs)
- HSHarry Stebbings
Um, your biggest winners you always underestimate the size of. If I told you Airbnb is the size that it is today-
- KHKevin Hartz
Mm-mm. Mm-mm.
- HSHarry Stebbings
... you'd be like, "Never expected that."
- KHKevin Hartz
Well, you know, certainly I think that we, the, the internet space just expanded beyond, like, our wildest notions. And, you know, so these markets, um, you know, I think about remittance where Zoom went public in 2013 and, and Air- and, uh, PayPal acquired it in 2015, but that market expanded so dramatically, you know, since then. Um, it's that kind of vote or that reaffirmation that, you know, maybe you should stay independent because you can just keep compounding and compounding in the market.
- 32:50 – 34:40
Prioritizing Sourcing, Selecting, Servicing
- KHKevin Hartz
- HSHarry Stebbings
Yeah, it's funny when you look at venture there's, there's sourcing, there's selecting, there's servicing. Kind of three core pillars pre-inves- um, kind of pre-selling that make a great venture investor.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
If I were to ask you what are you best at and what are you worst at-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... where would you rank the three?
- KHKevin Hartz
I'm lousy at selling. Uh, you know, I just r- r- like, I can only be kind of sincere in what I offer. Uh, you know, I'm, I'm might be a little irked when I see somebody, like, over-selling or BS-ing a lot or trying to find ways to kind of win a deal. I don't think you should win a deal. I think you should earn, uh, you know, the right to work with a founder for, um, many, many years.
- HSHarry Stebbings
Are they not the same?
- KHKevin Hartz
No, they're very different. And-
- HSHarry Stebbings
How are they different?
- KHKevin Hartz
Well, I, I see, um, you know, a kind of slick used car salesman kind of mentality, uh, which is almost like a fool the founder, get them to sign, you know, dupe the founder, um, into signing, you know, versus really what's best for their business and so on. And, and, you know, that's what I maybe offer sincerely. Sourcing is just a factor of, look, as I spend more time in The Valley and have a lot of great relationships of founders or other investors or so on, like, you know, the network is, is very, very broad. Um, yeah, selection, what can I say about that? You know, I, it's, it's always a sin of omission, you know. You always think about the ones that y- you let through or didn't, you know, didn't pursue.
- HSHarry Stebbings
What one did you not pursue that you think of most and what is your subsequent reflection on that?
- KHKevin Hartz
Oh, so many. I mean, you know, we could do a whole show on that. I mean,
- 34:40 – 40:25
Reflecting on Missed Ventures
- KHKevin Hartz
let me start-
- HSHarry Stebbings
What's the first one that comes to mind?
- KHKevin Hartz
Well, I, I think of when I was stepping down as CEO of Zoom, Keith and Roelof held a lunch for me in the cit- in San Francisco. Um, what was the name of that place? And Keith was talking about this YouTube thing. I was just kind of burnt out, of like, you know, it was like a, uh, it was a very bittersweet, shitty time to be stepping out of Zoom, and, and I'm just like, "Video on the online, that's so stupid." You know? Like, what? And, uh, Chad was a graphic designer. How would Chad know how to ... you know, so just completely missed that YouTube thing, for, for example.
- HSHarry Stebbings
What's the reflection on that?
- KHKevin Hartz
Y- the reflection is very clearly your mindset, is always be positive and open-minded. Like, you might, you know, let's say, uh, you know, something terrible ha- you're having the worst day of your life-
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
... and you meet a founder. Like, you still have to believe and you, you still have to have that, you know, that view and really, really listen because tha- that mindset, if it's off, you, y- you know, this little casual interaction becomes something really crazy.
- HSHarry Stebbings
It's the thing I love most about this business actually, which is unlike any other job I think in the world, one single meeting can change the life of you, your family for many generations. I say to the whole team, "You can never be off with a founder. Ever."
- KHKevin Hartz
It's so true.
- HSHarry Stebbings
And it's so important. I, I think people forget that. Are you honest with feedback to founders?
- KHKevin Hartz
No, totally dishonest. It sucks.
- HSHarry Stebbings
N- no but like seriously, like i- i- sometimes it is the founder that is the problem and you're like, "Honestly, I just don't believe in you." I don't think it's right to send an email back saying, "I don't believe in you."
- KHKevin Hartz
Oh, yeah.
- HSHarry Stebbings
I'm probably wrong. Who am I to say that you're not good enough? But I, so I shouldn't be honest
- KHKevin Hartz
But there's-
- HSHarry Stebbings
And just say that-
- KHKevin Hartz
But there's always good things to say to that. You could say like, "Well, why don't you look for some complementary expertise? Maybe you should bring on board a co-founder that can do this, this and this," or ... but once you start-... explaining too much-
- HSHarry Stebbings
They have something to push back against.
- KHKevin Hartz
... you know, it just goes back and forth and back and forth.
- HSHarry Stebbings
Exactly.
- KHKevin Hartz
And time is short and you-
- HSHarry Stebbings
So what do you do?
- KHKevin Hartz
I've, I've just, unfortunately, have to be very curt. Um, you know, like I always remember seeing Michael Moritz speak, give a talk about Google in the early 2000s, and there were all these founders there. And he puts his phone up to his face and pretends to talk and then, like, walks out of the building, you know, and so nobody would, like, bother him. And like, that's, like, splitting the ocean to get, (laughs) you know, like, away from that.
- HSHarry Stebbings
I, I, I totally get you and agree. How do you feel about exploding term sheets? I see them quite a lot nowadays.
- KHKevin Hartz
Little-known secret is, um, Keith, Javid, and I gave an exploding term sheet to Airbnb, and Paul Graham, uh, said, "No bueno," and teed off on us. And so, you know, we, we, we, it was nice that we, i- it worked out. We got cut into that round, but you don't forget things like that. Um-
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
You just do not forget that. I don't think I've ever told that story.
- HSHarry Stebbings
Were you nervous when he said, "No bueno"?
- KHKevin Hartz
I think he posted on it. He didn't, he didn't call us out, you know. He chided us privately, but he didn't call us out publicly. He called out the practice of doing it. And, you know, really-
- HSHarry Stebbings
But we should kind of understand as well, exploding term sheets have a horrible signaling name.
- 40:25 – 41:14
Assessing Deal Success Quickly
- HSHarry Stebbings
pat peanut butter. How quickly do you know when a deal is working and when it's not working?
- KHKevin Hartz
There's a certain percentage. Like there's some that, you know, very early on, you know, you know is gonna be a struggle. And then others that wander in the woods for, you know, that take a long, long, long, long time, and people almost forget about them, or tell, you know, there're, you got investors telling, uh, these founders to return the money, and they stick with it. Um, the most important thing is just patience. Um, and certainly you want them to maintain a sense of urgency, but you just have to see patience because you just see time and time again, you know, time as the thing to solve the problems and to get into orbit. And then there's the ones that just work from day
- 41:14 – 42:25
Kevin’s Top 3 Value Drivers
- KHKevin Hartz
one.
- HSHarry Stebbings
What have been your top three value drivers? You've got Airbnb, one.
- KHKevin Hartz
Airbnb, Pinterest, um, Bitcoin.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
And I was, uh, in Wyoming drinking whiskey with Wences Casares in October of 2011, and he started talking about this Bitcoin stuff, and, um, what else? Um, Uber with series B.
- HSHarry Stebbings
How much did you put into Bitcoin then? (laughs)
- KHKevin Hartz
A good amount.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
Investors never give you, like, exact answers, you know.
- HSHarry Stebbings
Mm-hmm.
- KHKevin Hartz
And you want exact numbers, but-
- HSHarry Stebbings
Yeah, fine.
- KHKevin Hartz
... investors always, like, skirt around it. You know, I always have a s- soft spot. It, it was a poor, it was like a relatively mediocre return because of all the capital, um, but PayPal, um, going public was like one of my first investments.
- HSHarry Stebbings
From a multiple perspective, what was that?
- KHKevin Hartz
Uh, not that, not that great. I'd have to take a look at it.
- HSHarry Stebbings
Like 10X? Like 20X?
- KHKevin Hartz
Maybe 20-ish or so.
- HSHarry Stebbings
Okay.
- KHKevin Hartz
Um, you know, but you would think if I had held it longer, 'cause what happened is that eBay acquired it, and then eBay had a run in the early 2000s.
- 42:25 – 47:45
Lessons from the Biggest Zero
- KHKevin Hartz
- HSHarry Stebbings
What's your biggest zero and what did you learn from that?
- KHKevin Hartz
It was like a kind of, turned out to be a kind of classic Sequoia investment that I did with Roelof was in a company called TokBox, T-O-K-B-O-X, and it was early-
- HSHarry Stebbings
Andrew Dunham.
- KHKevin Hartz
... live streaming. No. Oh, yes, he was there.
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
He was there.
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
In which he went on to go to Hims.
- HSHarry Stebbings
Trust me, Kevin, I am a student of this business.
- KHKevin Hartz
My God.
- HSHarry Stebbings
Yeah, yeah, yeah, yeah.
- KHKevin Hartz
Wow.... I actually recruited him for that be- through, 'cause I knew Jack Abraham, who started Milo.
- HSHarry Stebbings
Yeah.
- KHKevin Hartz
That's so funny. Wow, you just blew my mind that you came up with that.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
And, uh-
- HSHarry Stebbings
I have like the most useless encyclopedic knowledge of this business. (laughs)
- KHKevin Hartz
No. That's far from useless.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
Like that's incredibly important to know the lineage-
- HSHarry Stebbings
I, uh, it is.
- KHKevin Hartz
... of these things.
- HSHarry Stebbings
H- history is very important.
- KHKevin Hartz
Yes.
- HSHarry Stebbings
But, okay, so TokBox.
- KHKevin Hartz
Um, so TokBox was, you know, live video be- before kind of FaceTime and all this sort of stuff. And we, you know, like Roelof got involved and led the series A. Keith, Javed, and I had seeded it, very actively involved in it. You know, just kind of everything that could go wrong went wrong, scaling issues, market fit, um, Tony b- a- and we even had Tony Bates join, who was, um, you know, he had joined the board of YouTube, uh, like after Roelof had, um, in, in... So we were kind of like getting that group back together. And it just wouldn't take. Now, the interesting thing is that, you know, s- Sequoia found and, y- you know, helped at Park, um, with, uh, I think it was Spanish Telecom acquired it for like 70 million. So we got like a, y- you know, a small return, like a 2X or something. But just not worth the, the time and the pain and the broken glass of, of that. And then it's, you know, the hard part is, is that, you know, it was at that time when Sean Parker was doing something with video. What was the name of that?
- HSHarry Stebbings
Oh, um-
- KHKevin Hartz
And, and it was, um-
- HSHarry Stebbings
I know exactly which one.
- 47:45 – 56:48
Time Allocation in Venture
- KHKevin Hartz
- HSHarry Stebbings
I agree. You mentioned kind of TokBox and the time that went in, and it's like a 2X. There's often the question of like where to spend your time in venture.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
And people say, "Ah, spend your time with your winners. That's what drives value."
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
But then Fred Wilson says, "Well, losses are where you build your reputation."
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
How do you think about that time allocation on an outcome basis with the portfolio?
- KHKevin Hartz
It's the companies that are performing are the most, you know, you just have so much happening and need so much assistance that, you know, that's l- like, you know, I, I think naturally where you spend your time, and it, it should be with the, the companies, you know, winning. I, I do have a soft spot for all founders so, you know, we're there, and that's why, you know, I don't sleep as much, (laughs) y- you know, as I do, but-
- HSHarry Stebbings
When do you turn? Like if I feel like they're not working hard-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... I will turn.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
And then I'm not very nice. (laughs)
- KHKevin Hartz
(laughs) Th- uh, uh, you know, I think that's, th- that's just it. If, if-
- HSHarry Stebbings
If you're giving everything up-
- KHKevin Hartz
... you find somebody that wants to do it as a lifestyle investment, they shouldn't be doing it with other people's money just as-
- HSHarry Stebbings
Is it wrong-
- KHKevin Hartz
... RLPs.
- HSHarry Stebbings
... to ask for your money back as an investor?
- KHKevin Hartz
It kind of depends on the-... the, the level. I guess, you know, I'm, again, focused on more of the big outcomes and, uh, y- you know, the things that aren't gonna work, aren't gonna work. It's the power law winners that are gonna really drive the, the returns.
- HSHarry Stebbings
Is there a power law winner that you thought would be a power law winner that didn't turn into a power law winner?
- KHKevin Hartz
You know, I think the jury is still out. There's still a lot of value there in OpenSea. I was a seed investor in OpenSea and during, you know, the, the boom of 21, 22, it was valued at 13 and a half billion.
- HSHarry Stebbings
Why would you not sell some then? Like, given doing the seed there, Kevin?
- KHKevin Hartz
Yeah, I, I, you know, often think a lot about that. And, you know, my mindset was honestly, you know, when you see that l- fast l- level of growth, you, you're thinking about what the GMV is gonna be, you know, over the coming quarters and you don't think of it as dropping dramatically. You think of it as continuing to head up at a rapid pace.
- HSHarry Stebbings
But it does. I mean, I, I mean this nicely, even pushing back, it doesn't matter, dude. Like you get in at seed, that is an astronomical return-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... that you should at least take some off the table, no?
- KHKevin Hartz
I-
- HSHarry Stebbings
And like w- would you have done, would you have taken some off the table if you'd done it with the fund at seed?
- 56:48 – 1:02:29
When to Push and When to Support
- KHKevin Hartz
key.
- HSHarry Stebbings
Do you think that's helpful?
- KHKevin Hartz
It's incredibly helpful.
- HSHarry Stebbings
Really?
- KHKevin Hartz
I know for a fact.
- HSHarry Stebbings
So you think when it's not going well, like, oh, it's okay and you're supportive and that's nice-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... it's better than actually, hey, we need to fucking turn this around. We can do this, but this is, th- ... And that you're much more tough. Sometimes tough love is needed.
- KHKevin Hartz
Tough loded- love is needed when it's doing extraordinarily well. Like, when things are going terribly wrong and there are the, you know, butterflies and stomach, uh, you know, is, like, seized up and, um, m- teammates are quitting and somebody's hacked the site or whatever hell-
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
... you know, all these things, like, really being a solid productive voice of calmness and support is extraordinary help- extraordinarily helpful.
- HSHarry Stebbings
That's interesting.
- KHKevin Hartz
Try it. Just-
- HSHarry Stebbings
I disagree.
- KHKevin Hartz
Yeah? Okay. That's, that's fine.
- HSHarry Stebbings
I think, I think, I think it's about, like, understanding what the person needs in the moment.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
Some people do need that, absolutely, and it's unbelievable. But some people don't resonate with that.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
And actually they need... Like, for me-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... when it's really hard, and I've had some shit times, Kevin, you know, uh, it was my mom giving me a kick up the ass and saying-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... "You gotta wake up tomorrow and fucking be a big boy."
- KHKevin Hartz
Yeah, yeah.
- HSHarry Stebbings
And, like, "Stop moaning."
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
"Get on with this." Uh, "Okay." D'you s- but d- so it's like, it's so individual-led, I find.
- KHKevin Hartz
Yeah. I have to be careful not to put too much pressure on my girls to, you know... in this, in this age of, um, so much intensity in the Bay Area and schools and college-
- HSHarry Stebbings
Do you worry about that?
- 1:02:29 – 1:04:06
Investing in Mental Health & Wellness
- KHKevin Hartz
pathways or so on.
- HSHarry Stebbings
Um, but before we do a quick fire, two of my biggest concerns is actually, like, eating disorders thing, a- also, uh, y- young eating disorders in men is one that's really not talked about as well.
- KHKevin Hartz
I know. Yeah.
- HSHarry Stebbings
Especially for boys-
- KHKevin Hartz
Yeah.
- HSHarry Stebbings
... it's even more of a kind of... Um, and then just, like, depression and loneliness.
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
The hard thing is, Kevin, like, our job is to invest in amazing products that hopefully make the world better, have great impact, I think. I can't find businesses in that Calm or Headspace of the world, which makes w- yeah, mental wellness, health-
- KHKevin Hartz
Mm-hmm. Mm-hmm.
- HSHarry Stebbings
They're not great businesses. And is there, is this our job?
- KHKevin Hartz
Well, we hope that there's gonna be therapeutics. I mean, the next, the, the challenge of this era, of our era, is neurological issues, like, um... And Peter always tends to be three steps ahead of us on all of this. He's been after this area for a while, but y- you know, as we beat back cancers, as we beat back heart diseases, w- uh, disease, which unequivocally has happened, um, Alzheimer's, Lewy body dementia, um, y- you know, all these, um, mental illnesses, u- m- bipolar, like, these are, are the kind of prominent illnesses of our time and there need to be therapeutics, uh, developed for it. And, and so, yeah, this, this should be, you know, a, a kind of there should be a, a, a, just as I think it was Richard Nixon in, like, the '70s said, "Let's go after cancer." You know, we need to, to d- to go after these, um, y- neurological disorders that are becoming so prevalent in our society.
- 1:04:06 – 1:09:43
Quick-Fire Round
- KHKevin Hartz
- HSHarry Stebbings
I totally agree. I could talk to you all day, Kevin. Uh, I love the way I haven't really looked at the schedule. (laughs)
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
May spend hours supposedly doing it, uh, but, uh, okay. So I wanna do a quick fire. So I say a statement, you give me your immediate thoughts. Does that sound okay?
- KHKevin Hartz
Yes.
- HSHarry Stebbings
So what have you changed your mind on most in the last 12 months?
- KHKevin Hartz
The r- rapid ascension of the defense segment. Like, how it's gone from zero to 60, you know, certainly Palantir then Anduril, but now, you know, how the world has dramatically changed and how unprepared, uh, th- the United States is.
- HSHarry Stebbings
What VC do you most respect and learn from?
- KHKevin Hartz
You know, who, w- I spent a f- some time with when they were getting their first fund going was a group, um, called VY Capital.
- HSHarry Stebbings
Yeah, uh-
- KHKevin Hartz
Um-
- HSHarry Stebbings
... Alexander Tamas.
- KHKevin Hartz
Yeah, John Haering and Alexander Tamas.
- HSHarry Stebbings
Nice.
- KHKevin Hartz
Like, their, um, their style and pace and patience and wisdom is, is extraordinary.
- HSHarry Stebbings
Uh, I, I completely agree with you, and actually very much, uh, aligned to your thinking on upside maximization. Like, truly-
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
... focus on the mega outcomes. So I totally agree with you there.
- KHKevin Hartz
Mm-hmm. I'm in, I'm in a lot of funds, and holy Moses, that fund one is en fuego.
- HSHarry Stebbings
(laughs)
- KHKevin Hartz
(laughs)
- HSHarry Stebbings
Uh, what's the biggest advice to someone entering angel investing, Kevin?
- KHKevin Hartz
Just rope off some money you wanna lose, because, you know, you, you gotta look at, you've gotta, like, take a lot of swings of bats. I think, you know, Vinod has, like, a corollary to this that you've gotta, like, burn through, like, 40 million in venture before you really know what you're doing, and, uh, you know, angel is, is s- you've just gotta start, uh, learning and, and pattern recognizing. You do that by taking risk.
- HSHarry Stebbings
I, I totally agree with you. I'd also say write the same-sized check every deal. Like, everyone thinks, "Oh-"
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
"... I, I have different conviction levels."
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
"I'll write a 100K check and I'll write a 25."
- KHKevin Hartz
Mm-hmm.
- HSHarry Stebbings
You're not that smart, a pre-seed. Just write 50K-
Episode duration: 1:09:43
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Transcript of episode 6bF1RomgGCQ
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