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Sheel Mohnot: How I Got Married in the Metaverse; Founder vs Product vs Market | E1035

Sheel Mohnot is a Co-Founder and General Partner @ Better Tomorrow Ventures, a $225M fund that leads rounds in pre-seed and seed-stage fintech companies globally. Sheel and Jake (his co-founder) invested for many years together before founding BTV and wrote checks into Mercury, Flexport, Ramp, and Hippo Insurance to name a few. As for Sheel, before BTV he ran 500 Fintech for close to 7 years, and before that was a founder, founding two companies, both of which were acquired. ---------------------------------------------- Timestamps: (0:00) Intro (2:07) Advice for Young VCs (4:07) Why Fund Sizes Are Too Big (11:09) Investing in Emerging Markets (15:46) Investing in Europe (16:54) Investing in Fintech (19:44) Which VC firms will win over the next 10 years? (24:50) The Biggest Misconceptions About Venture (25:52) How Sheel Raised His First VC Fund (37:16) Why Sheel Launched an Accelerator (41:49) When You Should Take Money Off the Table (44:53) The Biggest Mistake VCs Made in the Past 2 Years (46:13) Founder vs Product vs Market (48:30) The Story of Warren Buffett and Mrs. B (51:32) The Biggest Reason Why Great Founders Fail (53:59) Will multi-stage VC firms quit investing in seed stage startups? (57:40) The Biggest Source of Tension Between VCs and Founders (1:00:23) The Biggest Source of Tension Between GPs and LPs (1:03:44) Thoughts on Founders Who Run VC Funds on the Side (1:06:00) How Sheel Got Married in the Metaverse (1:10:01) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Sheel Mohnot We Discuss: 1. VC Needs to Change: Why does Sheel believe that VCs should have smaller funds? What are the biggest misalignments between founders and VCs today? What are the biggest points of friction between VCs and their LPs today? 2. VC in 10 Years Time: Who are going to be the winners in venture in 10 years time? Who are going to be the losers? Will micro-funds be bigger or smaller as a segment of the ecosystem? Will solo-GPs be bigger or smaller? Were they a zero-interest rate phenomenon? 3. The Errors of a Bull Market: What does Sheel believe are the single biggest mistakes made by VCs between 2020-2022? Did Sheel take liquidity off the table in the last few years? What have been some of his biggest lessons on when to sell? How does Sheel evaluate the flood of capital into emerging markets in the bull market? What happens now? Fintech is also experiencing the same challenging time, how does Sheel assess what is happening in the fintech financing market today? 4. Building a Fund: Lessons, Mistakes and Advice Scaling to $225M: What are the single biggest mistakes Sheel and Jake have made in the fun scaling? How has it impacted their mindset? What does Sheel know now about fund management that he wishes he had known at the beginning? What advice does Sheel give to emerging managers today, raising their first and second funds? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Sheel Mohnot on Twitter: https://twitter.com/pitdesi Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact --------------------------------------- #SheelMohnot #BetterTomorrowVentures #HarryStebbings #20vc #venturecapital

Sheel MohnotguestHarry Stebbingshost
Jul 17, 20231h 15mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 2:07

    Intro

    1. NA

      ... camera.

    2. SM

      What about Zume, the pizza company? (laughs)

    3. HS

      Ah.

    4. SM

      Like literally from day one. So, okay, on that company, I met a f- a guy who invested in that company early, or relatively early. And it was a data-driven VC. And I was like, "What data do you have for this company?" And he was like, "We have all this data on like number of shares on Facebook of this video about them." And I was like, "Why the fuck would you invest off of a, a share is on, Facebook share is on a pizza company?" Like people were sharing this video about th- about this pizza company on Zume, 'cause it's like a robotic pizza company, and they used it as input to invest. And I was like, "That's crazy."

    5. HS

      And then they told SoftBank about that one and they heard you're investing, they didn't even hear the shares, they're like, "Done." (fingers snapping) Boom. (instrumental music) Sheel, I am so excited for this. We get to do this in person, baby.

    6. SM

      It's amazing, I'm stoked.

    7. HS

      I mean, listen, you are so much better looking in person.

    8. SM

      (laughs)

    9. HS

      Uh, (laughs) but first I wanna start with a little bit on you, and for those that missed our first show. So how did you make the foray into venture in a very succinct two to three minutes?

    10. SM

      Yeah, sure. So I, uh, I had always wanted to be in business. Like it's in my blood. Uh, for those Indian people you could... I'm a, I'm a Rajasthani.

    11. HS

      (laughs)

    12. SM

      And, uh, I didn't know what to do. Uh, but I, I always was tinkering with ideas as a kid. Always had a bunch of small businesses. Then I went into the corporate world. I was a management consultant. Then a buddy of mine was leaving to start a company, FinTech company, payments company, and I joined him. And then we sold that company in 2012. Then I ended up starting, uh, a company that we sold in 2015. And then at that point I thought, "Hey, I've really loved what I've seen on the other side of the table." Like I've loved what I've seen from VCs interacting just when I was fundraising. And m- aren't they the smart ones? Is sort of what I was thinking. And of course now I know better. (laughs)

    13. HS

      (laughs)

    14. SM

      Like now it's the other side of the table, it's the founders that are the smart ones. Um, but it's possibly just like anyone across the table from me is smarter than me. So-

    15. HS

      (laughs)

    16. SM

      ... that's, that's just how it works.

    17. HS

      I don't think that's true at all, but I do think maybe changed so much as investors.

  2. 2:07 – 4:07

    Advice for Young VCs

    1. HS

      And I'd love to hear, if you could go back and call yourself the night before your first day as a VC and say, "You should know this going in." What would you say to yourself on that call?

    2. SM

      I would say like, "No one knows what they're doing." (laughs) And so-

    3. HS

      Do you believe that?

    4. SM

      I do.

    5. HS

      Really?

    6. SM

      I feel like the more I've gotten into it, the more I've learned there's no right way to do it.

    7. HS

      Right.

    8. SM

      Right? Like you, there are so many different strategies that can be successful. People can be c- people can be very prescriptive and say, "This is the only way to do it." Or, "This is the only way to do it." And y- you can have that, you see that in so many different arguments. You have that in like we were talking about the remote work argument. So you can say, "The only way to do it is five days a week in-person. And if you don't do that, you can't be successful." But there are clearly succ- companies that are successful that are remote.

    9. HS

      Mm-hmm.

    10. SM

      And now it is actually my preference that companies are in-person, but I can't mandate it. I don't mandate it, because I think we've seen too many success stories that aren't all in-person.

    11. HS

      I, I totally agree with you. I just, I don't know, I sit down with your Bill Gurlays of the world, or your Pat Grady at Sequoia.

    12. SM

      Yep.

    13. HS

      And you're just like, "They really fucking know what they're doing."

    14. SM

      They do.

    15. HS

      And so I'm just like-

    16. SM

      Fu-

    17. HS

      Do you know what I mean? And so I just, I've kind of pushed back on that, 'cause I think it's an easy trope to be like, "Oh, no one knows what they're doing and it makes us feel better." But no, they do. And actually that's often why they continuously have the best returns.

    18. SM

      So, uh, hey, I'll push back on that. So with Bill Gurley in particular, let's say-

    19. HS

      Mm-hmm.

    20. SM

      ... uh, I, Pat I haven't spent much time with recently, but so, um, with Bill, I was talking to another one of his partners about their meetings. And they were talk- they actually had been talking about something I tweeted, and he said they had a rigorous internal debate about the right way to, about what was correct, and they don't know. Like they couldn't come to a conclusion about the right, about what was right. And I think it's like there are ways that you can invest, but actually knowing what to invest in or what a mode is, I think people are still figuring it out.

  3. 4:07 – 11:09

    Why Fund Sizes Are Too Big

    1. SM

      And even if you look at the greats, they have a bunch of misses and they have a bunch of companies that you say like, "Why did you do that?" It didn't, didn't make sense in hindsight.

    2. HS

      I, I totally get you. You mentioned, uh, oh, I mentioned Bill Gurley from Benchmark there, and Benchmark are kind of famed for their discipline on fund size.

    3. SM

      Totally.

    4. HS

      Now you said before that fund sizes should get smaller.

    5. SM

      Yeah. I think...

    6. HS

      Go.

    7. SM

      So I think we are operating in a crazy prisoner's dilemma situation where everybody... there's a bunch of capital that wants to go into venture still-

    8. HS

      True.

    9. SM

      ... and if you increase fund sizes, f- the industry as a whole needs to return a lot more than it probably will.

    10. HS

      True.

    11. SM

      And so if everybody reduced fund sizes, then we would, uh, probably be operating at a different level. We would be, uh, investing at lower valuations-

    12. HS

      Mm-hmm.

    13. SM

      ... and it would probably be better for everyone. Instead, we've got this continual upward march of fund sizes, and when you have a bigger fund size, you become relatively agnostic about the price you pay.

    14. HS

      So if we just like break that down before we kinda move further in that argument, do you think that actually LPs are still in market? Uh, uh, you hear continuously about funds that are struggling to raise, whether it's the large, you know, $20 billion PE firms, or actually it's the much smaller micro firms. Across the spectrum people are saying LPs have wi- withdrawn or are retreating in the last year.

    15. SM

      Yeah. Uh, I think there are LPs that have withdrawn quite a bit, but then you see everybody's in Saudi Arabia right now, right? (laughs)

    16. HS

      (laughs) I wanna start, I wanna start a startup that does like shuttle service to Saudi Arabia from the Valley.

    17. SM

      It's insane.

    18. HS

      Yeah. My favorite thing is actually the hypocrisy, I'm gonna get in so much trouble for this-

    19. SM

      Totally.

    20. HS

      ... the hypocrisy of, "Oh, we would never take money from there." First fucking recession comes, they are there.

    21. SM

      Totally. I have no strong viewpoint about it, like about whether it's, whether you should take money from there or not. We, we, we haven't, but, uh-... I think it is very hypocritical that all these folks who were anti-Saudi money are now over there just praising everything.

    22. HS

      Totally. So we have that on like the LP side, agreed. We do have funds that are starting to reflect what you say. Like Founders Funds-

    23. SM

      Founders Fund.

    24. HS

      ...

    25. SM

      halved theirs. Yeah, exactly.

    26. HS

      Like, do you think we'll see more?

    27. SM

      I think we'll see more. I think we have to. I think for the f- for the founders-

    28. HS

      Why, why, why would managers do it? If you think for them, it's a loss of fees. Like, i- it's not in their interest.

    29. SM

      Well, i- it depends. If you're, if you're fully returns focused, it could be in your interest.

    30. HS

      Could be.

  4. 11:09 – 15:46

    Investing in Emerging Markets

    1. HS

      I totally get you. You mentioned Southeast Asia there. We both (clears throat) did forays into emerging markets.

    2. SM

      Yeah.

    3. HS

      Uh, y- we've spoken a little bit before on email actually before this about kind of the death of fintech. I think first is like the death of emerging markets. In a macro downturn, everyone fucking pulls back.

    4. SM

      Totally.

    5. HS

      More than ever before. Is emerging markets investing pretty dead?

    6. SM

      It's struggling for sure. I think, um... And the more emerging you go, the tougher it gets.

    7. HS

      Yeah.

    8. SM

      So in a low interest rate environment, money's free and you're like searching for like more risk and you go to emerging markets. And a lot of people invested in a lot of places that they'd never been, didn't know much about. And I think now people are coming way closer to home. Um, but I still think there's opportunities in emerging markets and we, we still continue to invest in emerging markets. But probably less the like really far out markets.

    9. HS

      What's the really far out, just so I understand that?

    10. SM

      So I think, like, I think people have invested a lot in, like, Pakistan, Bangladesh, um, parts of Africa. I think they will continue to. Like, the- there are still good companies in these markets and the great companies will continue to raise money. But I think what had happened was, you know, there are a handful of great companies and what had happened was a lot of people who had never invested in these markets before started investing. And then instead of just putting money into the- the handful of great companies, like, the 100 companies after them that weren't that great also raised money.

    11. HS

      Sure. But even the handful of great companies, if you do not have a liquidity mechanism to get cash out, even if it works, go to Pakistan, go to Bangladesh, where are you gonna go public?

    12. SM

      Totally.

    13. HS

      Are you gonna come to the Nasdaq? I don't think so.

    14. SM

      Yeah. I think, first of all, I think it can happen. It's tough. Like, but for a truly great company, there's always gonna be an option.

    15. HS

      Is there an example of that?

    16. SM

      I mean, in Africa, we've had liquidity. We've had companies that went public. And-

    17. HS

      On the Nasdaq or... ?

    18. SM

      Yeah, I- I think, I think we've had companies that went public on the Nasdaq, yeah, from Africa. Um, and- and you could always, you could always have made that claim about LATAM, like, and then we had companies, we have Nubank, super successful company. So y- you could have made these claims about different markets that ended up maturing and building a robust market. Now, what happened that, uh, I think was totally shitty in 2021 was you weren't getting an appropriate discount.

    19. HS

      Yeah.

    20. SM

      So if, if it's gonna be a really tough path, but you have an exceptional founder, there's gonna be a path to liquidity at some point. But you have to get in at the right price to account for that. So-

    21. HS

      And we were paying prices that were akin to developed markets.

    22. SM

      Yeah. People started paying, like, seed rounds at $20 million valuations and in, in a market that's gonna be a really tough path to get to a billion dollar plus exit. And that, I think, was a shame.

    23. HS

      Uh, you said there about kind of Nubank, that's kind of it. There's dLocal which is like a-

    24. SM

      dLo- yeah.

    25. HS

      ... $7 billion company.

    26. SM

      Well, now, it's probably a lot lower after that, that, there was a short-seller report. I think it's like a few billion now.

    27. HS

      Okay. You know, we had Sabre on the show, so, you know (laughs) -

    28. SM

      (laughs)

    29. HS

      ... maybe I wanted to be nice, but, um, you know, the- wherever they are, like, you know, Sabre's fantastic. Sabre, I still love you. Um-

    30. SM

      But no, you've had o- you've had others, MercadoLibre, and a bunch o'-

  5. 15:46 – 16:54

    Investing in Europe

    1. HS

    2. SM

      Yeah. I think, I think there are great founders here. I think the ecosystem has developed. I think, like, for a while there wasn't the ecosystem around it and, like, now you've had a lot of folks actually move from the States here.

    3. HS

      Yeah.

    4. SM

      And there are good companies getting built here and so I'm still excited about it. I think there are a lot of companies... The companies that I'm most excited about are building here but for a global market.

    5. HS

      I feel like you're holding back on something, Sheel.

    6. SM

      No.

    7. HS

      No?

    8. SM

      I think, I just think, like, I haven't done anything that was purely serving the local market.

    9. HS

      I get you. I get you. Uh, I, I had a guest on recently actually and they said that Europe's the hardest market because it's big enough to keep you busy for a couple of years, but not busy enough or big enough where you have to go big from day one.

    10. SM

      Yeah. So that-

    11. HS

      Which is really interesting.

    12. SM

      ... that's, it's, it's so true and that's why I've invested in companies that are global from day one.

    13. HS

      Yeah. No, I totally get you. Okay, so, uh, we mentioned geography there, obviously BTV has a, a big fintech focus. It's not AI, is it?

    14. SM

      (laughs)

    15. HS

      I mean, let's just, let's just be honest. Um-

    16. SM

      Everybody should. Everybody just pivot to AI now.

    17. HS

      O- uh, why not? Or AR. I feel this is happening.

    18. SM

      Yeah, yeah.

    19. HS

      Um, 'cause-

    20. SM

      Starting last week, everyone's pivoting to AR.

    21. HS

      My favorite

  6. 16:54 – 19:44

    Investing in Fintech

    1. HS

      is the way we shit on these companies like, "Oh, you know, Facebook's over halfway. And Google are so over." Google with AR are so far behind. They're, they're, who are these guys? Release Bard, everyone's like, "I knew they were coming."

    2. SM

      It's like... (laughs) Yeah.

    3. HS

      "I knew they were coming."

    4. SM

      So (laughs) .

    5. HS

      But same with Apple and AI, it's like what are Apple innovating on?

    6. SM

      Yeah.

    7. HS

      They do it, it's like AR. Um-

    8. SM

      Yeah.

    9. HS

      ... question for you though, like, how do you think about, f- bluntly, the negativity towards fintech today-

    10. SM

      Yeah.

    11. HS

      ... and respond to that?

    12. SM

      Yeah, sure. So I, I'd say, like, stepping back, I started investing in fintech exclusively beginning of 2016. And I think, like, what drew me to it then was it's a huge part of the economy. It's like financial service is 20% of global GDP and it's a digital thing, like, it's numbers, it's money, and so it should merge with technology. Like, just from a macro perspective, that all makes sense to me. And from 2016 to 2021, there was this, like, crazy upward slope of trajectory of fintech companies. And if I'm being honest, like, 2020 and 2021 were just, like, overhyped. And that upward trajectory, like that chart of e-commerce, like, it went up and then it went like crazy hockey stick, and then it went down, but it's still continuing on that same trajectory. So-... I don't think FinTech's dead. I think we're just back to where we were a few years ago.

    13. HS

      Is it better for you now because there's much less competition?

    14. SM

      I think so, yeah. I think there's less competition, which ... So less competition for capital, but also less competition for companies. So in 2020, 2021, every company we funded, there were five companies just like it, also with great founders, with great investors. And so what ended up happening is a bunch of capital went into these companies, and five companies serving the same customer set, that's a lot of competitive pressure and nobody makes money, because you're all price competitive and, and you're all serving the same, same customer set that now is comparing against others. Um, I think now we're in a much better place, and the people that, that incremental founder that was building in FinTech because it was cool is now building a gen AI tool, and that's great. And I think I still feel-

    15. HS

      Do you mind the founders that hop from trend to trend?

    16. SM

      I don't ... No, I don't mind it actually. Like, I think, like, gen AI is super exciting, and if you're super excited about it, build for it. Like, there's no reason you s- I should say ... I should be prescriptive about what you can and can't build. Like, it's really exciting.

    17. HS

      On, on the venture side there, you know, when we think about, like, next 10 years of venture, how do we think it changes? We mentioned Andreessen earlier, we mentioned Benchmark. How do we think about, like, what venture looks like in the longer term, and who the winners and who the losers are?

    18. SM

      Yeah. Well, right now it seems like we have these, like, super big funds.

    19. HS

      Yeah.

    20. SM

      Right? We talked about Andreessen,

  7. 19:44 – 24:50

    Which VC firms will win over the next 10 years?

    1. SM

      General Catalyst, all these other guys. And I think those guys seem to be in the AUM accumulation game.

    2. HS

      Yeah.

    3. SM

      And I think it's tough. It's like, it's a tough business to have, like ... Like, if you, if you think about these huge funds, just getting returns on these huge funds is really tough.

    4. HS

      Yeah.

    5. SM

      You're really only shooting for $10 billion plus outcomes.

    6. HS

      100%, and even then it's not enough.

    7. SM

      And then I don't know how many of those there are gonna be.

    8. HS

      But if you actually project that, you know, your NEAs as well at three billion, you have a $10 billion outcome and you have 10%, uh, uh, uh, which is pretty good, 10%.

    9. SM

      Pretty good, but it doesn't return your fund.

    10. HS

      So ... Th- No, it's a third.

    11. SM

      Yeah. And I don't know how many $10 billion outcomes are gonna be. Like, if we're honest, like, in 2021, it looked like there were a ton of them, and now those companies aren't looking so hot. So I don't know how often there's gonna be a $10 billion outcome.

    12. HS

      So what happens with those funds?

    13. SM

      I think it's tough. I think, I think they have to shrink if they wanna be returns focused.

    14. HS

      Do they? Or actually, do they just move into a different class of LP? 'Cause now they've moved away from your family offices, your-

    15. SM

      Totally.

    16. HS

      Even university endowments. It's like, you know, bluntly, the biggest of the biggest sovereign wealth funds-

    17. SM

      Yes.

    18. HS

      ... who drop a billion in.

    19. SM

      Totally. And yeah, but, like, those guys also at some point want returns.

    20. HS

      Wh- What ... Uh, okay. Have you spoken to those LPs? Because you know what? They don't actually care.

    21. SM

      That's, that's probably true too. Yeah.

    22. HS

      They didn't ... And it's, like, such a small drop in their bucket.

    23. SM

      It's true.

    24. HS

      They're like, "You know what?"

    25. SM

      Or I mean-

    26. HS

      "We're an Andreessen, tick the box on venture, move on to where we really make money."

    27. SM

      Yeah. Yeah, maybe that's true. I mean, they dropped (laughs) 45 billion on the Vision Fund.

    28. HS

      Yeah.

    29. SM

      Which is insane. (laughs)

    30. HS

      And it's still pretty small for them.

  8. 24:50 – 25:52

    The Biggest Misconceptions About Venture

    1. SM

      it can be an easy, cushy job at some of these big funds, but I think, like, for the manager that's just starting out, it can be tough. And you, you can be investing more into it and not getting paid for quite a while before you end up-

    2. HS

      Oh my God, I'm s- I remember with our first fund, uh, it was Stride, uh, whatever the fundraising process was, but it was a significant, you know, 12 months or whatever it was.

    3. SM

      Yeah.

    4. HS

      Um, of course you have no salary. Like, it's a very luxurious position. I was very lucky it was a media company. But not many people can just go a year without salary.

    5. SM

      Totally.

    6. HS

      And then (fingers snapping) fuck, GP commit.

    7. SM

      Yeah, exactly. (laughs)

    8. HS

      Everyone's like, "You GP's," you're like, "Fucking hell, have you seen how much I'm putting into this?" (laughs)

    9. SM

      Totally, exactly. (laughs)

    10. HS

      I'm getting debt on my fucking- (laughs)

    11. SM

      Exactly. (laughs)

    12. HS

      Unbelievable. Uh, did you, talk to me, on the first fund, did you have an anchor?

    13. SM

      No, we had no anchor. So, so there was fund zero, my $15 million fund.

    14. HS

      Yep.

    15. SM

      Then fund one, 75. And we had no anchor in the $75 million fund.

    16. HS

      How did you go about that, man? Was it friends and family first? Was it institutions first?

    17. SM

      Yeah. So, um, so our first, uh, our first close was mainly

  9. 25:52 – 37:16

    How Sheel Raised His First VC Fund

    1. SM

      friends, like people who knew us in the FinTech ecosystem who were willing to back us just because they'd seen us in the ecosystem. And, and then we had one institution with Sundana.

    2. HS

      What does that get you to? Like, the friends and family still there-

    3. SM

      Yeah. So it got us to 18 million.

    4. HS

      18 million.

    5. SM

      And it's no family. We have no families giving money. (laughs)

    6. HS

      Give you $10. (laughs)

    7. SM

      Yeah. (laughs)

    8. HS

      Mine gave me an invoice, but, uh ... (laughs)

    9. SM

      Yeah, exactly. (laughs)

    10. HS

      "You called me, uh, it's $28."

    11. SM

      Yeah, exactly. (laughs)

    12. HS

      Um, so it took you to 18. That's good.

    13. SM

      It was good.

    14. HS

      But it's not near enough, 70 million.

    15. SM

      It's not near enough. So, but we hit Sundana in the first, in the first close, which was wonderful.

    16. HS

      Okay.

    17. SM

      And then, uh-

    18. HS

      Do they help a lot, having an institution like them, or-

    19. SM

      I think it gave some credibility.

    20. HS

      Yeah.

    21. SM

      I think, like, also just having a first close gave a lot of credibility, like-

    22. HS

      Mm-hmm.

    23. SM

      And we'd done our first investment. Um, so, like, we were investing and we'd had a first close.

    24. HS

      How big did you do for the first close?

    25. SM

      18.

    26. HS

      Oh, you did 18? That is a really, like, early first close if you ask me.

    27. SM

      It's an early first close. Now, part of the reason we did the first close is we had a company that we had to invest in. We had committed to this company in, like, September. We said, "We're gonna lead your seed round," but we actually didn't have a fund at that point. (laughs) And so-

    28. HS

      Holy shit.

    29. SM

      ... we had to close (laughs) as soon as possible so we could fund that company. And I bel- I think you, um, it's, the company was Unit, a banking as a service company.

    30. HS

      Yeah, Itai.

  10. 37:16 – 41:49

    Why Sheel Launched an Accelerator

    1. HS

      kind of got a little bit moody on social.

    2. SM

      (laughs)

    3. HS

      Uh, he told me, "Have fun staying poor."

    4. SM

      Yeah (laughs) .

    5. HS

      Uh, I responded, "I'm in Belgravia." (laughs)

    6. SM

      (laughs)

    7. HS

      Uh... (laughs)

    8. SM

      (laughs)

    9. HS

      But, uh, you do you.

    10. SM

      (laughs)

    11. HS

      Um, but, like, you know, when we saw this unbundling, you've got your NEO of the world with, um, Ali Partovi.

    12. SM

      Yeah.

    13. HS

      And then you've just got a lot of, you know, obviously Josh, uh, did Hypo with, from Product Hunt, and you've seen a lot of them. Why was now a good time?

    14. SM

      Yeah. So number one, so I ran an accelerator from 2016 to 2018.

    15. HS

      Yeah.

    16. SM

      And that fund has incredible performance.

    17. HS

      Mm-hmm.

    18. SM

      And, uh, I think more important than that, founders told me, founders that we backed back then in the accelerator, said, "Hey, my friends are starting a company. What's the closest thing to what we had?" Which was in person, super hands-on, so we had experts in growth, marketing, recruiting, available to them. And the answer was, "There's nothing like it." YC is a totally different beast. YC is great, like they have great, great companies, but it's really built for scale. And it, and some of our portfolio companies that went through YC said they didn't really get the support in fintech that they needed. They have, like, a generalist, um, mentor who doesn't know anything about fintech. And so they would be asking these questions and they had no idea what to do. Um, so we felt like, oh, there's an opportunity here. Like, once again, people are asking for a fintech solution and we can give them that.

    19. HS

      Okay, and so you decide to give them that. What do the next steps look like? How, how do you fund an accelerator or an incubator?

    20. SM

      Yeah. So ours is, we'll probably have about 10 companies in this. We're, we're thinking six to 10. And we're investing a half million in every company. So it's actually, for a fund like ours, it's not that much money.

    21. HS

      No, it's a gr- but, like, you actually have to fund the incubator, like, the holding company behind it, which is-

    22. SM

      It's not a holding company. In our case, it's just a carve out of the fund into a separate vehicle.

    23. HS

      Do you not have to pay the mentors, uh, the-

    24. SM

      We do. We pay it all out of, out of our management fees. So really what's happening-

    25. HS

      That's a lot, isn't it, though?

    26. SM

      It's a lot. So really what's happening is it's a great deal for LPs because we are getting a better deal on the investments because we're taking money out of our management fees and paying for new space and mentors and all this other stuff.

    27. HS

      But, like, can you run that for less than a million and a half dollars a year?

    28. SM

      Yeah, you can.

    29. HS

      You can?

    30. SM

      We're doing a lot of it ourselves, and I think we've got great mentors that we're, we're really excited about, and we can, we can do it all for less than a million.

  11. 41:49 – 44:53

    When You Should Take Money Off the Table

    1. SM

      So we did in some cases. Now, of course, we didn't sell nearly enough.

    2. HS

      (laughs)

    3. SM

      (laughs) Like, we, we should have-

    4. HS

      Yeah.

    5. SM

      ... we should have sold more and we had opportunities to and we didn't.

    6. HS

      But you did sell?

    7. SM

      We did sell, yeah. Um-

    8. HS

      How do you advise on selling in terms of take it 30% off the table and, you know, just protect your initial position but ride the upside, take majority off, take all off? What, what are your thoughts?

    9. SM

      I generally think... I- in one case, we sold our entire position to a, a later stage investor. Um, but that's unusual for us. I think generally speaking, we'd like to just ease our position. And if you can, if you can, um, return an entire fund, there's something about having 1X DPI that's quite nice.

    10. HS

      Yeah.

    11. SM

      So, like, if you can get to a point where you can return 1X DPI and still have upside in a company, that's great.

    12. HS

      Yeah.

    13. SM

      Ideally, like, if you're still excited about the company, then f-... you know, you wanna keep half of your capital, or half of, half of your equity still in the company.

    14. HS

      What would you say is your single biggest investing mistake? A lot of people will say, like, not taking cash off when they really could have done

    15. NA

      (laughs)

    16. HS

      ... last year was theirs. What would you s- mine was before I entered emerging markets, honestly. (laughs)

    17. SM

      Yeah. For me, it was not taking enough cash out. So, like, I had the opportunity to take a lot, like I could have returned multiples on the fund, and I didn't, and-

    18. HS

      And why did you not?

    19. SM

      So, um, there's one, one company I'm thinking of that could have returned multiples on the fund, um, and in between when I had started an, uh, started to discuss taking money off the table, um, and when we had finally, like, the documents, it took, like, a few months. And during that time, this company grew so much and they were like, "You know what? I wouldn't sell at that price." They told me, they were like, "We'll, we'll get this through for you, but I wouldn't sell at that price given how much we've, we've increased in value." And they were like, "We'll probably do another round in the next couple of months. You might wanna wait." So, I talked to the founders and they were like, "You might wanna ma- wait, we might be worth double what you're selling at." And so I did that, and then of course, they never, (laughs) they never were able to. The mar- this is, you know, beginning of 2022, the market started tanking, and they were never able to get that round done that they thought would be a double.

    20. HS

      Do you find it difficult? It's quite a tough conversation. "Hey, I love you, I love you, I love you. I wanna sell my whole position in your company."

    21. SM

      Yeah. I actually didn't find it, we haven't found it difficult-

    22. HS

      Mm-hmm.

    23. SM

      ... um, in the selling. We, well, we said, like, "We wanna, we wanna start, you know, we're at, we're at a point where, like, we've invested for so many years in this company, we wanna start reducing our position." And founders get it. It's not a big deal. Especially back then when there was way too much demand for every round of the company.

    24. HS

      What is, okay, so that's your mistake. Whe- when you look back over the last 24 months, what's the biggest mistake you've seen other ambassadors make in the industry?

    25. SM

      Well, I think, I mean, obviously the same, and maybe, maybe going too deep into emerging markets, like you said. But other stuff, I think people can get too excited about an idea and invest behind the wrong founder,

  12. 44:53 – 46:13

    The Biggest Mistake VCs Made in the Past 2 Years

    1. SM

      just in that idea. And in our case, let's say, um, banking as a service, we talked about Unit.

    2. HS

      Mm-hmm.

    3. SM

      So Unit's a banking as a service company. If you wanna, uh, create a ch- a, a debit card product within your company, you can work with Unit. So, like, if you're Toast, um, which is a, uh, point of sale system-

    4. HS

      Oh.

    5. SM

      ... for restaurants, and you want to add more and more products, so you, they've added a payroll product, they can add a bank account product. And, um, if you are the operating system for that restaurant owner, you might wanna also be where they bank. And Unit offers you that opportunity. So, Unit is a company in the space, um, I think widely considered to be a very strong company. A lot of folks looked at that company and said, "We love this company." But they couldn't invest, and they ended up investing in another company in the same space, and that was just a mistake. Like, invest in the, in the best company, not in number two or number three. And a lot of those haven't, have shaken out to not, not work out that well.

    6. HS

      Founder, product, market. How do you weigh them up?

    7. SM

      So, we invest at the, at super early stages. It's all about the founder. And you disagree?

    8. HS

      I think it depends where you invest. But, like, I think, I was explaining actually the other day to someone, I said, "Listen, it's

  13. 46:13 – 48:30

    Founder vs Product vs Market

    1. HS

      very much like surfing. You need a great surfer, for sure. But if they go in the middle of the night to the beach, (laughs) they ain't surfing. Or if they go perfect midday, perfect, nice wind, wrong beach, they ain't surfing either." You need market timing, you need the right beach.

    2. SM

      Yeah, but if you invest in the surfer, if you get behind that surfer, they can switch.

    3. HS

      Mm, they rarely do.

    4. SM

      No.

    5. HS

      No, they rarely do.

    6. SM

      So listen-

    7. HS

      And then, and then, and then-

    8. SM

      ... three of, three of my top five companies were pivots.

    9. HS

      Well, great, but there's a lot of investments in there. Like, the company set that we're looking at, it's, like, many.

    10. SM

      Yeah.

    11. HS

      And I think absolutely they can. They also need long enough runway to pivot within that. Quite often I see it where it's, like, actually they realize the pivot and then it gets that, "We've got six months left, we're pivoting now."

    12. SM

      Yeah, so you, you have to, y- you have, it has to happen early. So if you invest super early at pre-seed-

    13. HS

      Yeah.

    14. SM

      ... I think it makes sense to invest in the best founders, in going after a market space that you like.

    15. HS

      100%. I'm with you there, totally. I think it's when it's, like, actually at the A/B-

    16. SM

      Oh, at the A it doesn't make any sense at all.

    17. HS

      Yeah.

    18. SM

      At the A, there has to be a big market-

    19. HS

      Yeah.

    20. SM

      ... that you're going after. Yeah.

    21. HS

      I, I would much rather do more-

    22. SM

      But I'm, I'm a, I'm a pre-seed/seed investor, right? So-

    23. HS

      I'm also just, like, so few people get to product/market fit. Like, when you actually determine true product/market fit, don't try and get cute on founder assessment. Do you know what I mean?

    24. SM

      Yeah.

    25. HS

      It's really fucking hard.

    26. SM

      Yeah.

    27. HS

      If they've got there, you're probably underestimating them.

    28. SM

      It's true, I think, but I think that's once you get to product/market fit.

    29. HS

      Totally.

    30. SM

      And we, we're almost exclusively investing before then.

  14. 48:30 – 51:32

    The Story of Warren Buffett and Mrs. B

    1. SM

      B?

    2. HS

      Yeah.

    3. SM

      Rose Blumkin?

    4. HS

      Yeah.

    5. SM

      So, there was this woman who came over from Belarus-

    6. HS

      And this is one that doesn't speak a word of English.

    7. SM

      ... didn't even speak Eng- doesn't speak English-

    8. HS

      Yeah, yeah.

    9. SM

      ... when she comes over. She starts a, uh, a furniture store in Nebraska.... Omaha. Originally in their basement, then it grows and grows and grows. And, uh, she's just like incred- She didn't even go to school. She never even went to kindergarten. And, but she's just got such a mind for business that she continues to grow this thing incredibly. He eventually buys it in like 1983 for like, he buys 90% of it for like 60 million bucks or something. It was actually the largest acquisition that Berkshire had made at that point. And, um-

    10. HS

      Did she not die like two years after?

    11. SM

      No.

    12. HS

      Uh, she gave up or something? I remember he made a joke like-

    13. SM

      Okay. So what happens-

    14. HS

      ... never. (laughs)

    15. SM

      So what happens is her kids end up kind of pushing her out of the business. She's 95 years old at this point.

    16. HS

      Oh, fair enough. Yeah.

    17. SM

      So they're like, "Hey, we..." And, and actually what's really funny is they had an issue. She, they pushed her out of the business in part because they were fighting over the control of the carpet department. She said, "I never wanna let go of the carpet department. That's gonna be my thing still." And they were like, "No, you should, you should get out of here." And they pushed her out, her kids. And then what she does is six months later she opens a place across the street from them, literally a furniture store competing with them across the street. It's a spite store basically. (laughs) It's called Mis- Mrs. B's Furniture Clearance Market or something like that, across the street from the Nebraska Furniture Mart. And then eventually Warren Buffett has to buy that o- that one too. (laughs)

    18. HS

      Mm-hmm.

    19. SM

      And then he, he puts a clause in there that there's, he puts a non-compete clause in there that she at, whatever, 96 years old is not gonna compete with him again. (laughs)

    20. HS

      And so your point is her as a founder-

    21. SM

      And what he said about her was, he said, "I would back her in anything she did. Any business she wanted to go into, she would be successful." And so it ha- it's actually a counter, like it's a great founder. She would be successful at anything she did.

    22. HS

      Have you ever had... Well, have you ever had a really not good founder win?

    23. SM

      Yes. Um, but it was an interim win. It was like a too early win. And I think-

    24. HS

      What does that mean? Like they sell for 50 million style, which is a great outcome.

    25. SM

      Can be a good outcome. Um, I've seen in my angel portfolio a founder that I thought was just okay, ended up getting to an exit, and I think if they'd continued on the business, it wouldn't have been that successful. And that happens all the time. Like you have companies that, uh, are successful up to a certain point. The, the worst company gets an acquisition.

    26. HS

      (coughs)

    27. SM

      The better company sticks around and then they go public and then totally tank. It's happened many times in the past few years.

    28. HS

      Yeah, no, I, I totally get you. What are the biggest reasons for you why great founders fail?

    29. SM

      I think failing to find... First of all, like you can fail to find product market fit even if you're a great founder.

    30. HS

      Yeah.

  15. 51:32 – 53:59

    The Biggest Reason Why Great Founders Fail

    1. SM

      I think actually can be very value add is say, "Hey, I think we should think about a different business." And like come to make a plan. So actually I have this going on with one of my portfolio companies now. We have a plan and if we don't get to that plan in the next two months, we're gonna think about a different company. We're gonna pivot. We have years of runway, but the current thing it's working a little bit. There's signs that it's working, but we worry that even if it's working, it's not gonna get to a huge business. So like we're, we're gonna test this out for a few months and we're staying close on it as investors. And if it doesn't work, we're gonna pivot.

    2. HS

      Do you worry about the length of runway some companies have? I have some companies and they're like-

    3. SM

      Yeah.

    4. HS

      ... they've got like 60 months.

    5. SM

      Yeah.

    6. HS

      And it's like-

    7. SM

      We do. We, yeah, yeah.

    8. HS

      ... the honest urgency is, is not... And I don't blame them at all, but like do you worry about that and what happens to them?

    9. SM

      I think great founders... So I think bad founders raise a ton of money and spend it. Great founders raise a ton of money and still have the same sense of urgency, still are on the same roadmap as if they'd raised a much smaller round.

    10. HS

      So I say always on Twitter, and this leads to so much hate and it's probably why Andreessen hate me, uh- (laughs)

    11. SM

      (laughs) I didn't know that.

    12. HS

      Yeah, whatever. Um, but like, you know, five on 25 I think has destroyed much of the seed industry.

    13. SM

      Totally.

    14. HS

      But everyone goes, "Well, if you get great founders, they'll raise five on 25 and spend like they have two." And I'm like,-

    15. SM

      It's so rare.

    16. HS

      ... "Lovely idea."

    17. SM

      It's-

    18. HS

      I love it. Yeah, you're right, and if you do that, then I promise you're right.

    19. SM

      Yeah.

    20. HS

      Maybe seen it once.

    21. SM

      It's actually almost impossible because what happens is if you ra- raise five, the expectations people have for salaries are different than if you raise two.

    22. HS

      100%.

    23. SM

      So there's, it's basically impossible to have the same mentality as if you raise two.

    24. HS

      Absolutely.

    25. SM

      And I think... I agree with you completely. The five on 25, like raising big rounds makes people, like makes people cushy, and you end up attracting people with salaries that like actually th- they could have gone into a big company and actually they, they belong at a big company.

    26. HS

      Yeah. They do not belong in your startup scrappy.

    27. SM

      They do not belong at a hard scrat- hardworking, scrappy startup.

    28. HS

      (laughs)

    29. SM

      And so I completely agree with you.

    30. HS

      Okay, good. Do we see them continue or do they go back? You know, we always see multi-stage come in and out of seed.

  16. 53:59 – 57:40

    Will multi-stage VC firms quit investing in seed stage startups?

    1. SM

      dollar checks in anyone.

    2. HS

      It's a learning check.

    3. SM

      It's a learning check. But what happens, and I've already seen this, is my portfolio company that is working is raising a series A or series B. They don't want to talk to that investor because that investor i- invested a million dollars in their competitor. That competitor is almost dead anyway, but they're like, "Fuck them. I'm not gonna talk to that guy. They invested a million dollars in my competitor." And so they missed the opportunity to invest $100 million in a great company that is winning the category because they invested a million dollars in their competitor. And so I just don't think it makes sense for a multi-stage fund to do it. Especially in a category where like there are multiple competitors, why would you invest i- when you know that like you might have invested in the wrong one and that prevent you from investing in the good one?

    4. HS

      I, I, I totally agree with you. When you think about the multi-stage strategies coming to seed, who do you think has done it the best?

    5. SM

      I can't think of any multi-stage fund that I feel like has done a great job at seed.

    6. HS

      I always think founders fund are pretty good at seed, actually.

    7. SM

      I think I don't know their portfolio well enough-

    8. HS

      Mm-hmm.

    9. SM

      ... in fintech to say that. They, they do a lot of seeds and-

    10. HS

      Yeah.

    11. SM

      ... and they have had good success. Um, you know, I think, uh, my friends at Excel have done a pretty good job as well. I, I think-

    12. HS

      Dan Levine is good at seed.

    13. SM

      Yeah. There's a bunch of folks who are good at seed. I think it's more individual-based.

    14. HS

      Yeah.

    15. SM

      I think the folks that have done the spray and pray approach is very bad.

    16. HS

      Yeah.

    17. SM

      And people go in and out of it. So like Andreessen did a lot of it early on in Andreessen Horowitz's, uh, tenure as, as a fund, and then they stopped doing it, and then they started doing it again. And I would guess they stopped doing it now.

    18. HS

      Yeah. I don't think they will, but (laughs) we, we can have a debate on that one. I, I, uh, we've seen also like large, large seed funds, like I think True Ventures' seed fund was 700 million.

    19. SM

      Yeah.

    20. HS

      Maybe split across some, but that was all-

    21. SM

      It's, I think it's half and half. I think it's like-

    22. HS

      But it's still like 400, 500. The initialized-

    23. SM

      It's huge.

    24. HS

      ... is 500.

    25. SM

      Yeah, I think these are too big.

    26. HS

      I'm not throwing any shade on it. Are they too big?

    27. SM

      I think they're too big. I think, um, well, they're, they're both doing what I would call series As as well. Like, they are writing $10 million checks.

    28. HS

      Okay.

    29. SM

      So, and I don't think of that as a seed round.

    30. HS

      No, totally.

  17. 57:40 – 1:00:23

    The Biggest Source of Tension Between VCs and Founders

    1. SM

      just like the founder's friend and, uh, supportive but not too prescriptive. Um, I think you can get into a mistake being too prescriptive. Uh, and, and sort of telling founders what to do rather than like recommending what to do. Um, and I've seen that even from like good investors that I've been alongside on the board, I've had founders like call me after a board meeting saying like, "Hey, what the fuck was that?" Like, "I'm doing everything I was supposed to do. Why is this VC telling me what to do?"

    2. HS

      Do you find boards very helpful?

    3. SM

      No. Um, I think I wanna be supportive to a founder in there when they need me. And that can happen in a board relationship, but usually that's not where, that's not what happens in a board. And so I'm meeting with the founder every week or every couple weeks anyway, and the board is a totally different beast. It's like structured. I think a board can be helpful for the founders to sit back and reflect on their business once a quarter, and it's very effective for that. And then of course there's like governance things that need to happen, but-

    4. HS

      Who's the single best board member you've sat on a board with?

    5. SM

      I think there, there are a bunch. Like I have, um, I have a board with, um, Jeff Horng, the founder of Insight, and like, he doesn't speak that much, but when he does it's like, oh, he's, he's absolutely right. And like I can look back a couple times about what he said, he was like absolutely right. I think, uh, we, we had... One of my other companies, we had, um, David Lowy, who was CMO of Google.

    6. HS

      Yeah.

    7. SM

      And, uh, same thing. Didn't speak that much, but when he did, he was absolutely right (laughs) . He had a story about Google and it was really good. Um, so tho- those folks, I think these like wise, wise folks who have a lot of experience. So I, I think their experience is right and I think a lot of, you know, like young- younger guys can discount that experience, but like, it's really valuable and the same shit happens time and time again. And you realize that like them having seen it over the past 20 years is incredibly valuable.

    8. HS

      We- we were talking earlier about kind of the weight that we place on, you know, age of founders.

    9. SM

      Yeah.

    10. HS

      I totally agree with you. Like, I think a lot of the shit is very repeatable.

    11. SM

      Totally.

    12. HS

      We mentioned tension between founders and VCs. Final one. What about tension between LPs and GPs?

    13. SM

      Oh, yeah. Um, I think a lot of GPs went a little crazy in the last... in 2021. And, uh, LPs were probably unhappy about that. I think if you do what you say

  18. 1:00:23 – 1:03:44

    The Biggest Source of Tension Between GPs and LPs

    1. SM

      you're gonna do, LPs are happy. And I think we do what we say we're gonna do, we talk to our LPs on a regular basis.

    2. HS

      Most GPs didn't.

    3. SM

      Yeah. I think a lot of GPs got out of their zone.

    4. HS

      Yeah.

    5. SM

      And I think that was a mistake.

    6. HS

      Mm-hmm.

    7. SM

      Um-

    8. HS

      So the, the cool misalignment there is actually the incentive mechanism of deployment schedules. Uh, in managers' cases, it makes sense to deploy more, raise more, get more fees.

    9. SM

      Totally.

    10. HS

      But for LPs, that is misaligned.

    11. SM

      Yeah. So you... I mean, a lot of folks had these one-year funds or I- I even heard of some sub-one-year funds.

    12. HS

      Sure.

    13. SM

      ... and coming back to market, and that's not what LPs want.

    14. HS

      But I spoke to one manager recently and they raised... Th- they'll be on fund five within six years.

    15. SM

      Crazy, right?

    16. HS

      Yeah. And they're like, "Yeah." But normally, you know, it's like, oh, by the third fund, that's when the rubber hits the road, like seven, eight years in. I've got five to six funds in in that time. So I'm doubled on AUM before they actually know. So they have to underwrite me for the five, six without knowing.

    17. SM

      Yeah.

    18. HS

      Not three to you, Harry.

    19. SM

      I think, um-

    20. HS

      Which made me really, like, ick.

    21. SM

      Yeah, it's ick. Like, I'm in this business to have good returns.

    22. HS

      (laughs)

    23. SM

      I'm investing a bunch of my net worth into these funds too. And so-

    24. HS

      So I think the GP commit's actually an area of misalignment, not alignment, in the way that a lot of them will be like, "Hey, we need 3%."

    25. SM

      Yeah.

    26. HS

      And you're like, "Well, shit, my fund's 140 million."

    27. SM

      Totally.

    28. HS

      "I have not been working for years and years."

    29. SM

      Yeah.

    30. HS

      "This is like 4 million plus."

  19. 1:03:44 – 1:06:00

    Thoughts on Founders Who Run VC Funds on the Side

    1. SM

      had the SVB crisis. Like, you need to be there for your founders, and if you're there for your founders, you're not there for your company. And that is a problem. So I think founders with fund- with, like, investing checks on the side occasionally is fine, or, or if it's strategic, it's fine. But I think there are founders who are, like, leading rounds, and I think that's bonkers. If you think about, like, we have a company going through some shit right now, and I'm there for them any day- anytime of the day or night. And if I was running my own company and this wasn't all I was doing, like, I wouldn't be able to do that. And I don't, I don't know how you square that. Like, how can you, how can you be operating a fund and running a company? What do you think?

    2. HS

      Uh, so I totally get you. I think that Jack Altman's done it incredibly well.

    3. SM

      Yeah.

    4. HS

      And I don't know how this guy does it. He's go- a father, he runs Lattice. I mean, so he does it. I mean-

    5. SM

      But he doesn't lead rounds. He's running checks into round-

    6. HS

      He does now. He does now.

    7. SM

      And he's... What? He does?

    8. HS

      He, he does now.

    9. SM

      Oh, okay. I didn't know.

    10. HS

      He does now. I, for me, and again, I, I think the biggest challenge that I just struggle to get over, and I'm not throwing shade, but I struggle to get over it, which is, like, when you take external capital, that is an incredible responsibility.

    11. SM

      Totally.

    12. HS

      And when you take external capital for a second thing on top of something that you've already raised s- significant millions towards-

    13. SM

      Totally.

    14. HS

      ... for the first one, if I'm in the first one, I'm like, "That is disrespectful to my money." Like, "I gave you money-"

    15. SM

      Yeah.

    16. HS

      "... to do this," and that's like, like... I'm thrilled to do it, but, like, do what you said you were gonna do.

    17. SM

      Totally. Yeah.

    18. NA

      That's true.

    19. HS

      And so I don't have a problem with founders angel investing.

    20. SM

      No, I don't at all.

    21. HS

      You want to do rock and roll.

    22. SM

      Yeah.

    23. HS

      But when you're raising-

    24. SM

      And, and then, uh, uh, oh, another thing is, like, a lot of folks do it-

    25. HS

      LP management, by the way.

    26. SM

      What?

    27. HS

      LP management, like-

    28. SM

      Yeah.

    29. HS

      ... suddenly you have 50 LPs in your single fund.

    30. SM

      I just think about how, like, I am doing this job, like, round the clock, and I just can't imagine having another full time job.

  20. 1:06:00 – 1:10:01

    How Sheel Got Married in the Metaverse

    1. SM

      And, uh, I... Credit to my wife, Amrita, because she went along with all this crazy shit. You know, you know me, I say yes to a lot of stupid stuff, and this was just another one in a long line of those examples. And, uh, in this case, Taco Bell had a contest about getting married in the Taco Bell metaverse. And I'm a fan of Taco Bell, people on my Twitter know that. So when they came out with this, a lot of folks tagged me, and they were like, "Shiel, this is for you." They saw that I'd just gotten engaged and they were like, "This is perfect for you, you should do it." And so I was with my wife, my now wife, driving, uh, on a road trip, and I mentioned to her, I was like, "Hey, look at this," just, like, casually like, "Hey, look at this. Wouldn't it be fun?" And to my surprise, she said, "Yeah, all right, let's make the video. It'd be fun. It'd be, like, a fun exercise." So we, we took 20 minutes and thought about what we would say and we stopped and recorded it. We actually only did two... We only recorded it twice. We didn't, we didn't think that much about it because we just thought it's a fun thing to do, but we're probably not gonna actually submit it, and if we submit it, we're not gonna win, and if we win, we're not gonna do it. So...... you know, what happens. We get back from the trip and I, I'm just like, "Let me just submit it." Whatever. And then we get notified by Taco Bell that we've won. And then we kind of pushed back and said, "Hey, like, I don't know if this is for us. We don't wanna (laughs) get married in this Taco Bell metaverse." And then they were like, "Hey, just get on a Zoom call with us." So we got on a Zoom call with them and they convince us. They say, "It's gonna be your wedding. We're gonna do whatever you want. Um, it can be Indian. We'll design it for you. And you're gonna be part of the Taco Bell family." They said, "You're gonna be part of the Taco Bell family," and I was like, "That's what I've always wanted." So, uh, we eventually did it and it was really fun. It was in February. Um, it was-

    2. HS

      What does it mean? So you sit in a room on Zoom?

    3. SM

      Yeah. (laughs) So you're sitting in a room with, with... Some of our friends were there too. And we're on camera and there's this metaverse, it's in Decentraland. Um, it was actually really cool. For a while I was pretty skeptical about it. I've never spent any time in the metaverse.

    4. HS

      Mm.

    5. SM

      I'm not, like, a metaverse guy. But it was actually really, really cool. I rode in on an elephant. People from around the world were, were there. My family in India was attending. They have their avatars. It was actually really cool. It sounds really stupid. Actually, the day of, I was thinking, "This is cool."

    6. HS

      And you say your vows through it?

    7. SM

      Said our vows through it. Did everything. It was a legal wedding. We, we, we (laughs) were legally married in this metaverse.

    8. HS

      Was it quite emotional?

    9. SM

      It was very emotional, yeah.

    10. HS

      Yeah.

    11. SM

      It was fun.

    12. HS

      Did your wi- did your wife like it?

    13. SM

      Yeah, she loved it.

    14. HS

      Do you get, like, Taco Bell credits?

    15. SM

      We do. (laughs) We do. We have a lot of Taco Bell credits.

    16. HS

      How many credits do you get?

    17. SM

      I don't know. I, they gave us, they gave me 500 bucks for my birthday, um, on, in Taco Bell credits. Which, actually, Taco Bell gets you pretty far. They also paid for our honeymoon, 25K, which is pretty nice.

    18. HS

      Uh-huh.

    19. SM

      Um, and they've been, they've been great.

    20. HS

      What was your favorite thing from Taco Bell? Like, we've just had Taco Bell, like, land in the UK.

    21. SM

      Oh, yeah.

    22. HS

      I've never been.

    23. SM

      Mexican pizza, big fan.

    24. HS

      Mexican pizza?

    25. SM

      It's amazing, yeah. You'll love it.

    26. HS

      This is a pizza-

    27. SM

      Mexican food in the UK sucks, I have to say.

    28. HS

      Oh, terrible. We don't have it anywhere.

    29. SM

      Yeah.

    30. HS

      Have it anywhere. We've got La Bodega Negra-

  21. 1:10:01 – 1:10:47

    Quick-Fire Round

    1. HS

      And Founders Collective as well are very, very good.

    2. SM

      Oh, yeah, super good.

    3. HS

      Yep. Uh, what Series A firm would you most invest in?

    4. SM

      I can think of so many good ones. Our, our, um, we've invested a lot with Accel.

    5. HS

      Mm-hmm.

    6. SM

      And I, I think they, they do a really good job. Um, oh, but I guess, like, you know, in the spirit of keeping fund size small, it hard to beat, hard, hard to beat Benchmark.

    7. HS

      I, I, I have to say I'd choose Benchmark at the A.

    8. SM

      Yeah.

    9. HS

      You can do a multi-stage firm now. We're going kind of growth/multi-stage. Who would you go for?

    10. SM

      Yeah. Um, again, I worry about this fund size increase. So, because Founders Fund shrunk their fund size, I'm gonna go with Founders Fund.

    11. HS

      It's not a bad shout. GreenOtis, I really like.

    12. SM

      Yeah.

    13. HS

      I really like Addition.

    14. SM

      Yeah. All good.

    15. HS

      Really like Ribbit.

    16. SM

      Good folks. Yeah, they're all good.

    17. HS

      It's tough, actually. But they're all big funds.

Episode duration: 1:15:41

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