Benchmark Part II: The Dinner

1. SPSpeaker0:00

   I've spent a lot of time in, in, in, in, in Europe, and the dinners are about three hours, maybe three and a half hours long. So unlike the-

2. DRDavid Rosenthal0:07

   That's an Acquired episode. [laughing]

3. SPSpeaker0:08

   Yeah. [laughing]

4. SPSpeaker0:10

   There you go. And that's the whole point, is that social connection is not something that's transaction. It's fluid, it, it's fun, it's playful. And, and so the idea is people are coming out beaming, smiling after a dinner, as opposed to, um, you know, this sort of rigid structure of a typical dinner with an agenda. There is no agenda.

5. SPSpeaker0:27

   No agenda.

6. SPSpeaker0:27

   Yeah.

7. DRDavid Rosenthal0:27

   No agenda.

8. SPSpeaker0:28

   I don't have an agenda today.

9. SPSpeaker0:28

   The agenda is to come together. [laughing]

10. SPSpeaker0:30

    [upbeat music] Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Hm. Is it you? Is it you? Is it you? Sit me down, say it straight, another story on the way. Who got the truth?

11. BGBen Gilbert0:47

    Welcome to Season 11, Episode 5 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

12. DRDavid Rosenthal1:01

    And I'm David Rosenthal, and I'm an angel investor based in San Francisco, where we were for this very episode.

13. BGBen Gilbert1:10

    Indeed, and we are your hosts. Last episode, we told the four-hour story of Benchmark, the legendary venture capital firm that stayed small while all their competitors ballooned in size. At the end of the episode, we mentioned that their partner meeting had this dinner at the end of it, where the five equal partners of Benchmark sit down for an open-ended discussion, sometimes with a special guest. Well, we were talking with the Benchmark partners about that last episode, and they invited us to be their guest for one of these dinners, and for the first time ever, record it, even on video. So we are so pumped to share this with all of you. We got to ask them about a lot of the open questions we had about the future of balancing those out-there consumer investments with their B2B portfolio, how they think about making sure that they see that next world-changing company, the pressure of inheriting a top venture firm and trying desperately not to mess it up, and of course, there's some good war stories from the portfolio companies in there, too, David.

14. DRDavid Rosenthal2:11

    Indeed, indeed. Bet, this was such a special episode on so many fronts. This is, by far, is a record on an Acquired episode for number of guests that we have concurrently.

15. BGBen Gilbert2:23

    Oh, we had seven microphones running.

16. DRDavid Rosenthal2:25

    We had to buy, like, $5,000 worth of gear just for this episode. [chuckles] I think it was worth it, though.

17. BGBen Gilbert2:30

    Next time, I need to account for the fact that there will be, uh, violent laughter when I'm setting the audio levels, 'cause we had a blast, and you'll definitely hear it when you listen. Well, for our presenting sponsor on this episode, we have a company that you know very well at this point, Fundrise, and this very interesting thing they've been sharing with us this whole season called the Fundrise Innovation Fund, that enables their customers not just to invest in real estate, but also private, late-stage growth tech companies. So we are back today with Ben Miller, the CEO and co-founder, to dive a little deeper into the model.

18. DRDavid Rosenthal3:03

    I wanna ask how you are identifying companies that you want the Fundrise Innovation Fund to invest in?

19. SPSpeaker3:12

    So we're a different kind of investor than most venture funds, because we are also a tech company. We have 100 software engineers. When we went out looking for great companies to invest in, we started thinking: "What are great technologies we wanna use?" And if we like the product, and our engineering team can vet them, then pretty much anybody would wanna buy them, and that's a good, good signal that, that we should invest in them. And so we [chuckles] we reached out. We had our engineering team set up calls with companies we thought were potentially interesting. We started integrating even more advanced technologies than we probably would've otherwise. RudderStack, incredible company. Retool, incredible company. We're gonna be customers of those products and, hopefully, investors. We're not investors now, so not to choose anybody, but I think it's very consistent with Fundrise's approach. When we invest, Fundrise wants to bring as much value as we can, so we have a million and a half users and individual investors. That's gonna bring brand awareness. That's gonna bring future developers who adopt the product, and we'll be a customer. You hear dogfooding, right? We don't need to, you know, look at Tigas re- reports to figure out if the product's good. We're gonna actually diligence it with our software engineers. Even though I do like Tigas, it's a great product.

20. DRDavid Rosenthal4:27

    It is a great product.

21. SPSpeaker4:28

    Yeah. Every time we make an investment, especially, like, big, notable investments, we send out an investor update that's almost like a combination of an investor report and an Instagram story. It's really how investor reporting should work. And we send it out to, you know, basically, almost 2 million people. A million and a half people will get this. So it's a, it's a whole different form of comms for companies that I think is really gonna be valuable, but people actually never seen it before.

22. BGBen Gilbert4:55

    It's a little bit like going public.

23. SPSpeaker4:57

    Yeah, it's just without all the nightmare of actually being public.

24. BGBen Gilbert5:01

    Our thanks to Fundrise, the largest private investment platform in the world for retail investors. You can click the link in the show notes, and if you're a founder and you wanna get in touch with them about the Innovation Fund participating in your next funding round, email notvc, that's notvc@fundrise.com. Well, we just launched the Acquired 2022 Survey. We would be eternally grateful if you would take the three minutes to participate and help us learn a little bit more about who listens. One winner will get second-generation AirPods Pro, and 10 winners will get T-shirts from our merch store. It's a huge help, so please and thank you. Well, we have an update to the merch store. We got many requests about this: "Gosh, why isn't there a dad hat?" Well, we called up the good folks at Cotton Bureau, and we did some horse trading, 'cause I wanted a really good one. You know, I wanted one that was embroidered, that felt nice. So for the next couple weeks, there'll be a limited edition dad hat embroidered with ACQ right there on the front, so get them before they're gone at acquired.fm/store.... All right, join the Slack acquired.fm/slack. The LP Show has been on fire recently. For those of you who are paying LPs out there, we just dropped an interview on the profitable growth playbook for B2B companies with Jalay Rezaei, the CEO and co-founder of Mutiny. That is live just for LPs right now for another week or so, and then it will hit the public feed. So you can become a LP at acquired.fm/lp, or get those episodes after they're made public by searching for The LP Show in your favorite podcast player. Now, without further ado, on to the dinner! And listeners, as always, this show is not investment advice. David and I may have investments in the company we discuss, and, uh, this show is for informational and entertainment purposes only. Okay, so our first question is, what are we doing here? Like, what are we at? And Peter, it feels like you would be the best person to explain this dinner tradition.

25. BGBen Gilbert6:57

    Why do we have a dining room in the office? [laughing]

26. SPSpeaker6:59

    On the nineteenth floor. [laughing]

27. SPSpeaker7:01

    When I joined Benchmark, there was great optimism between Bill and me about, you know, injecting new practices, new habits, new ideas into the firm. And Bill had just read the Ben Franklin, uh, biography, and Ben had four dinners, if I recall, a week, but they were, like, going deep on finance, then on, you know, chemistry, and then on life sciences, and, uh... And he took the catalyst to say, like, "Why aren't we doing dinners?" And anyway, we had this like, playful, you know, experiment where we said, "Well, let's try a few of them." And then we did a, a big dinner towards the end of the year, and I think it was like two thousand and seven, maybe two thousand and six. Two thousand and six. It was actually my first year. And, uh, it was amazing, like time stood still. And, and we realized, like-

28. BGBen Gilbert7:47

    Just, just the partners, or?

29. SPSpeaker7:48

    No, we had four outside guests: uh, Katarina Fake, uh, Mike McCue-

30. BGBen Gilbert7:53

    Yep

Episode duration: 1:58:57