Inside Standard Capital: New $425M Series A Fund, Explained

In this episode, Dalton + Michael discuss the background and details for Dalton's new Series A fund, @Standard_Cap D+M discuss the key ideas and inspiration for Standard Capital from many years of working with founders at Y Combinator.

DaltonhostMichaelhost

Sep 15, 202535mWatch on YouTube ↗

EVERY SPOKEN WORD

40 min read · 7,765 words

0:00 – 0:42
Decoding Series A “VC speak” and why fundraising feels broken
1. DADalton
  Think about how much of our job at YC has been-
2. MIMichael
  Yes
3. DADalton
  ... decoding VC speak-
4. MIMichael
  [laughs]
5. DADalton
  ... into English.
6. MIMichael
  [laughs] Yes.
7. DADalton
  Any words that aren't yes-
8. MIMichael
  [laughs]
9. DADalton
  ... is a no.
10. MIMichael
  Yeah. [laughs]
11. DADalton
  But, like, with all this, like, extra accoutrements on the edges. If you get an email and there's like lots of words in it, that's a no.
12. MIMichael
  Yes. [upbeat music] Hello, this is Dalton plus Michael, and today we're gonna talk about Standard Capital, the new fund by Dalton and PB. As a kind of 30-second preview, why don't you tell us a little bit about, um, how you decided to start this fund, and why is it different?
0:42 – 2:57
From founder experience to fund thesis: bringing YC-style simplicity to Series A
1. DADalton
  I think to start with, um, as you know, I give a lot of advice over the years as a YC partner on pivots.
2. MIMichael
  Yes.
3. DADalton
  And one of the things I th- I try to do when giving someone advice about a pivot is I try to imagine of all ideas this person could work in in the world-
4. MIMichael
  Mm
5. DADalton
  ... where do they have the most unfair advantages? Where do they have the best network? Like, I believe that every person has, like, a perfect idea for them, and that my job is to try to pull out of any founder what their ideal idea is.
6. MIMichael
  I have stolen that line.
7. DADalton
  [laughs] Like, maybe 100 times.
8. MIMichael
  Yeah. [laughs]
9. DADalton
  [laughs] Maybe, maybe 100 times.
10. MIMichael
  It's helpful, especially in the sea of, "Well, I could do anything."
11. DADalton
  Yeah.
12. MIMichael
  Yes.
13. DADalton
  There's, there's too many choices. There's-
14. MIMichael
  Too many choices
15. DADalton
  ... um, but if you think about it this way, everyone has one really-
16. MIMichael
  Yes, yes
17. DADalton
  ... uh, good idea. And so-
18. MIMichael
  By the way, I love that too, because it's kind of like in a really hard competition, you wanna play games you're good at.
19. DADalton
  Yes. [laughs]
20. MIMichael
  [laughs] And like, the, the world is a really hard competition. [laughs]
21. DADalton
  [laughs] It's like...
22. MIMichael
  Yeah. Okay. So-
23. DADalton
  And so, so this is an idea that I crafted very specifically for this founding team-
24. MIMichael
  Yes
25. DADalton
  ... which is PB, myself, and Brian Burg.
26. MIMichael
  Yes.
27. DADalton
  And kind of the idea is to take a lot of what makes YC work at the seed stage-
28. MIMichael
  Yes
29. DADalton
  ... and apply it to the Series A. Um, the way I like to explain this is 20 years ago I raised a seed round.
30. MIMichael
  Yep.
2:57 – 6:40
Why Series A remains painful: long cycles, ghosting, and “optional” relationship games
1. DADalton
  And it was like I had to get warm intros to people, I put them in my CRM, I had to go on coffee dates to get to know people and go through this complicated process-
2. MIMichael
  I'm sure you loved those coffee dates.
3. DADalton
  Oh, I lo- You know me. I love them.
4. MIMichael
  [laughs]
5. DADalton
  There's one thing I love-
6. MIMichael
  Coffee dates with random investors. [laughs]
7. DADalton
  Oh, yeah, that's like... Love that stuff.
8. MIMichael
  Put it on my calendar. [laughs]
9. DADalton
  [laughs] And, and then the, the craziest thing about the process, I remember, and I'm sure this still stings you-
10. MIMichael
  Yeah
11. DADalton
  ... is where you would spend all this time with people over weeks or months, and they would like wanna go out to dinner and be your best friend and talk about how great you were.
12. MIMichael
  Yeah. It was-
13. DADalton
  And then like, "Oh, you know, we're definitely coming in," and then they would, like, pass at the very end.
14. MIMichael
  Often silently. [laughs]
15. DADalton
  They would ghost you.
16. MIMichael
  Yes.
17. DADalton
  Um, or they would be, yeah, they would be like, "Oh, this is just perfunctory, like, we're definitely in," and then you would get, like, the very weird pass at the end.
18. MIMichael
  Yes.
19. DADalton
  After literally months of time and effort.
20. MIMichael
  Yes.
21. DADalton
  And it was crushing, and it was a huge time waste, and I felt horrible 'cause I wasn't working on my startup when I was doing these fundraisers. I was st- I was instead fundraising.
22. MIMichael
  Well, and to that point, I was told, like, this was an important part of being a founder, but I'd always found it a little confusing-
23. DADalton
  Well, you weren't adding any value.
24. MIMichael
  [laughs] Yeah, my company was not getting better. [laughs]
25. DADalton
  You weren't creating value. [laughs] No.
26. MIMichael
  Yeah, the company was getting worse. [laughs] It's like-
27. DADalton
  You know?
28. MIMichael
  ... here's a side quest, and then y- you need money, but, like, I feel like that was a bit of a lie. Like, oh, this side quest is gonna help you with your com- It's like-
29. DADalton
  Yeah
30. MIMichael
  ... no, it's gonna get me money.
6:40 – 11:18
Introducing the Standard Capital team: Paul Buchheit (PB) and his “truth bomb” style
1. DADalton
  And so that's the context, which is, look, we saw what made YC work. Uh-
2. MIMichael
  Yes
3. DADalton
  ... PB was, was at the second demo day as an angel investor, and so he's-
4. MIMichael
  We should probably introduce PB a little bit more.
5. DADalton
  Yeah. You should, you should say who PB is.
6. MIMichael
  Yes. Yes. Yeah, yeah. So, uh, PB, Paul, Paul Buchheit, um, I often tell founders that Paul Buchheit gave both of my startups the single most important pieces of advice, which is crazy, 'cause it was like-
7. DADalton
  [laughs]
8. MIMichael
  ... you know, it was like infinite value creating the first time, and then, like, I still remember the second time being like, "Wait, I think he might have just did it again."
9. DADalton
  [laughs] Like, like what are you-
10. MIMichael
  That guy
11. DADalton
  ... like, what is happening? [laughs]
12. MIMichael
  He just drops truth, truth bombs on you, Michael. Just dropping a truth bomb.
13. DADalton
  Just bang.
14. MIMichael
  So, um, Paul was a very early employee of, of Google, uh-
15. DADalton
  23. He was number 23
16. MIMichael
  ... 23. Um, he was an angel investor in a lot of companies, uh, Twitch and Socialcam included. I always respected his, his style. He, he, you know, he's not gonna hold your hand and give you, like, eight hugs, and be like, "Oh, how do you feel today about the experience of a startup?"
17. DADalton
  [laughs]
18. MIMichael
  [laughs] He's not gonna do that.
19. DADalton
  No.
20. MIMichael
  But, like, when you give him a problem, there's like an 85% chance he will give you a better solution than you're gonna come up with, and like h- I... He's been doing it for like 20 years. [laughs] Like...
21. DADalton
  Yeah. I mean, it's one of those things, when you meet someone that's really smart, you can just tell-
22. MIMichael
  Yeah
23. DADalton
  ... that they're just operating with more horsepower.
24. MIMichael
  Yes.
25. DADalton
  Like, whatever's going on-
26. MIMichael
  Yes, yes, yes
27. DADalton
  ... he's-
28. MIMichael
  Yes
29. DADalton
  ... he's got a lot of horsepower up there, and so if you can kinda direct him the right way-
30. MIMichael
  You're gonna get a, you're gonna get a nugget. And like, you know, it turns out companies don't need like 100 nuggets.
11:18 – 13:34
Brian Burg and the “software-first” operating model inspired by YC
1. MIMichael
  So no, so I mean, that's in- That's incredible, and then you've got your old co-founder joining as well.
2. DADalton
  Yeah, Brian was-
3. MIMichael
  Yes
4. DADalton
  ... you know, the CTO of imeem-
5. MIMichael
  Yes
6. DADalton
  ... and he was the CTO of my second company, Mixpanel Labs.
7. MIMichael
  Yes.
8. DADalton
  So we ran a company together for over a decade.
9. MIMichael
  Yes.
10. DADalton
  And, you know, when I started at YC, I introduced him to Patrick Collison.
11. MIMichael
  Okay.
12. DADalton
  Um, he became employee 70 at Stripe. And-
13. MIMichael
  Okay. That's pretty good
14. DADalton
  ... he's been an engineer there the whole time.
15. MIMichael
  Okay.
16. DADalton
  Um, writing code, you know. He was reporting to the CTO of Stripe.
17. MIMichael
  But, but wait, Dawson, you're starting a VC fund. Why would you need so-
18. DADalton
  Yeah
19. MIMichael
  ... like why, you know, we all know that you need to get Microsoft 365. [laughs]
20. DADalton
  [laughs] Microsoft Teams.
21. MIMichael
  Microsoft Teams.
22. DADalton
  I've been having to use a lot of Microsoft Teams recently, man. It's not good.
23. MIMichael
  It's one package. [laughs] Well, why do you need a software developer?
24. DADalton
  Well, I mean, look, we saw what made YC great-
25. MIMichael
  Yeah
26. DADalton
  ... which is at its core is it was a software company created by a person that loved software-
27. MIMichael
  Yeah
28. DADalton
  ... and didn't love people. Just kidding.
29. MIMichael
  [laughs]
30. DADalton
  Didn't love hiring a bunch of people-
13:34 – 16:13
The hidden downside of traditional A rounds: reputation networks and board risk
1. MIMichael
  I think one of the funny things i- is, like, y'all are unpacking so many things where I feel like this awkward process that's been created around Series As, it's not obvious it makes the Series A investors' lives easier either.
2. DADalton
  Well, I think so much of, of the classical Series A investor is relationship based-
3. MIMichael
  Sure
4. DADalton
  ... and reputation based, where a lot of what they do-
5. MIMichael
  Fair
6. DADalton
  ... is they have people they trust.
7. MIMichael
  Yep.
8. DADalton
  And they trust the people that they trust to tell them who to give money to, and that's kind of the business. Again, that's not a great, you know, but that's... At the end of the day, that's the, that's the business.
9. MIMichael
  It's just sad. Like, when I hear that, it's sad because it's like, you know, for better or for worse, especially in a lot of these kind of shotgun processes, like, these people don't know each other that well.
10. DADalton
  No. And then it's no big deal. They're just gonna be on your board, and they can fire you, right?
11. MIMichael
  [laughs] Yeah.
12. DADalton
  No big deal. Oh, you're, you're, you're just meeting a stranger, and maybe they invest, and then they fire you someday. Oh, yeah, that's a... I'm being facetious again, but look, it's-
13. MIMichael
  Closer to the truth than not. [laughs]
14. DADalton
  We, we have a lot of secret stories that we can never tell-
15. MIMichael
  Yeah
16. DADalton
  ... that we learned, uh, at YC around bad board members.
17. MIMichael
  Yeah.
18. DADalton
  And, um, what was that quote? Uh, not, this is not my quote, but I remember a founder being like, "Look, a board member is either a plus one, a zero, or a minus one. There's only a handful of plus ones in the whole world, so try to get a zero." [laughs]
19. MIMichael
  [laughs] Go for zero.
20. DADalton
  Try to get a zero board member, and, like, if you can get a zero, then at least you don't have the minus ones. That wasn't a joke either when that, when that founder was telling the story.
21. MIMichael
  It's, it's so hard 'cause I think that, like, I don't blame founders for believing that boards can help. What I do wish is that I wish there was a way for a founder to kind of be in one public board meeting.
22. DADalton
  Yeah. Well, for context, Michael, you're on the board of Reddit.
23. MIMichael
  Yeah, Reddit and Dropbox.
24. DADalton
  And you're on the board of Dropbox.
25. MIMichael
  Yeah. And, like, I just wish I could bring them into one meeting, and they'd be like, "Well, this is like-"
26. DADalton
  This is how-
27. MIMichael
  "... this is gold"
28. DADalton
  ... the standard works.
29. MIMichael
  "This is fine." [laughs] Like, if this is winning, [laughs] like, what are you gonna have?
30. DADalton
  Yeah.
16:13 – 18:01
Standard Capital feature set: YC-style application, no warm intros, minimal founder time
1. DADalton
  Okay, so you're starting this new fund.
2. MIMichael
  Yeah, so let me just tell you the actual features. That seems re- 'cause we're, we're-
3. DADalton
  Nice
4. MIMichael
  ... we're dancing around. Let me-
5. DADalton
  I love it
6. MIMichael
  ... here's the features.
7. DADalton
  How is it different?
8. MIMichael
  Number one, you're gonna apply on our website. We're creating an application process just like we had at YC, which has been the thing I've been-
9. DADalton
  Yes
10. MIMichael
  ... you know, working on all these years.
11. DADalton
  Yes.
12. MIMichael
  And so you won't need a warm intro. You don't... It'll just be a website. Anyone in the world can apply.
13. DADalton
  Put yourself in the mindset, we've seen founders invest easily a month in creating a deck, editing a deck-
14. MIMichael
  That no one reads
15. DADalton
  ... practicing a deck.
16. MIMichael
  And the deck is bad. So it's like-
17. DADalton
  Hey. [laughs]
18. MIMichael
  I shouldn't say... I, I'm... Basically, often the first draft of decks that we see could use some improvement.
19. DADalton
  Yes. [laughs]
20. MIMichael
  How's the-
21. DADalton
  Is that a-
22. MIMichael
  That's... Yeah
23. DADalton
  ... is that an even-
24. MIMichael
  Really bad. [laughs]
25. DADalton
  But, and, and yet it's not for lack of effort.
26. MIMichael
  No.
27. DADalton
  Decks are hard.
28. MIMichael
  Decks are hard.
29. DADalton
  Decks are hard.
30. MIMichael
  And this isn't, like, the job, which is, like, making your users-
18:01 – 19:15
Standard terms: publishing a standard Series A term sheet upfront
1. DADalton
  Number two, the reason it's called Standard Capital-
2. MIMichael
  Mm-hmm
3. DADalton
  ... is that we're creating a standard Series A term sheet.
4. MIMichael
  Mm.
5. DADalton
  YC created the SAFE.And it's just on our website
6. MIMichael
  Whoa, whoa, whoa, so I don't have to spend $250,000 with my lawyers for the privilege?
7. DADalton
  Well, they might still try to bill you. I'm just kidding. [laughs]
8. MIMichael
  [laughs]
9. DADalton
  But what's cool is you can just... Anyone in the world can go look at the safe document-
10. MIMichael
  Yeah
11. DADalton
  ... and know what the terms are before you talk to any investors. Before anyone applies to Standard Capital, they can just go read our, our term sheet. They can read our terms.
12. MIMichael
  I love that.
13. DADalton
  Isn't that cool?
14. MIMichael
  It-
15. DADalton
  And so you'll know exactly what the deal is before you apply.
16. MIMichael
  This is-
17. DADalton
  Instead of it being this opaque thing where they show you the terms at the very end of the process-
18. MIMichael
  Yes
19. DADalton
  ... after you've said yes.
20. MIMichael
  Well, that's the crazy thing.
21. DADalton
  [laughs]
22. MIMichael
  It's like they show you, like, some terms in the term sheet.
23. DADalton
  Yeah.
24. MIMichael
  And then, because obviously as a founder you've had time to go to law school-
25. DADalton
  [laughs]
26. MIMichael
  ... they show you this, like, huge document that's full of, like, things that they've spent a lot of time thinking about [laughs]
27. DADalton
  And you haven't.
28. MIMichael
  [laughs]
29. DADalton
  And you're at the end of the process, so what are you gonna do, tell them no?
30. MIMichael
  Yeah. Like, you have no leverage.
19:15 – 21:28
Name your price: 10% standard deal and founder-chosen check size
1. DADalton
  The other thing that's super cool-
2. MIMichael
  Yes
3. DADalton
  ... is that the standard deal will be for 10% of the company-
4. MIMichael
  Yes
5. DADalton
  ... uh, for our lead check.
6. MIMichael
  Yeah.
7. DADalton
  And the founder, as part of the application, will choose their price of how much money they want to raise from us in exchange for 10%. So picture a text box-
8. MIMichael
  [laughs]
9. DADalton
  ... where you can type in six.
10. MIMichael
  Yeah.
11. DADalton
  $6 million in exchange for 10% of the company, and that's just part of the application. You're just filling it out. You're like, "Okay, six," you know, "seven."
12. MIMichael
  How often have we sat down with a founder and they've said, "Well, I think I need this much money, but should I ask for this much money so that they can do this? And then if I ask for a smaller amount, then I get multiple people, but..." And the... And it's this fucking like-
13. DADalton
  It's used car sales.
14. MIMichael
  [laughs] Yes.
15. DADalton
  It's, it's like-
16. MIMichael
  Yes
17. DADalton
  ... it's a used car thing.
18. MIMichael
  Yes.
19. DADalton
  It's like going to the market and bartering at the flea market.
20. MIMichael
  Literally. [laughs]
21. DADalton
  [laughs]
22. MIMichael
  I argue the flea market's easier. You get the deal done that day. [laughs]
23. DADalton
  It's, it's, it's true. It's, like, such a weird, awkward... Again, I'm gonna use that word awkward. It's a very awkward-
24. MIMichael
  Yes
25. DADalton
  ... process to do a negotiation like it's like the olden times.
26. MIMichael
  Yes.
27. DADalton
  Uh, 'cause founders always ask me, I don't know if they ask you this, but they're like, "Dalton, what's the equation to determine our valuation?" And I'm like, "Founder, I'm gonna..." It's like I'm telling them Santa Claus isn't real.
28. MIMichael
  [laughs]
29. DADalton
  I'm, let me, let me real with you. There's no equation. Everyone just makes up numbers.
30. MIMichael
  Yep.
21:28 – 25:39
Service-level commitment: a firm yes/no timeline and reducing founder “psychic damage”
1. DADalton
  Um, we're gonna have a quality of service where it'll tell you how many days before you get a firm yes or no from us.
2. MIMichael
  That's, that's impossible to do.
3. DADalton
  I know.
4. MIMichael
  How could you ever... Uh, there's vacations. There's-
5. DADalton
  Yeah, you have to think about-
6. MIMichael
  ... the hot deal you have to chase.
7. DADalton
  Yeah. 'Cause imagine, when you were a founder, Michael, imagine if someone could actually promise you by what date that you would know they were confirmatively in or out. Even if they weren't, even if it's a no, what a gift to know where you stand versus you just getting stretched out, "Oh, I need one more meeting. Oh, I need to schedule the partner meeting. Oh, I need to do the..." There's always these extra steps that get added at the very end.
8. MIMichael
  It's just so weird 'cause, like, I'm gonna say if/when this works and people tell the stories about how... Like, people are gonna be like, "It never... This isn't how it was. Dalton, you must be exaggerating." [laughs] Like, "This is not... [laughs] Like, why, how, how did companies even happen if they had to go [laughs] through this?"
9. DADalton
  Yeah.
10. MIMichael
  And sometimes I think, like, companies succeed despite this bullshit. Um-
11. DADalton
  Yes. [laughs]
12. MIMichael
  That's a good, that's a good way to say it. This is a nec- this has always been a necessary evil.
13. DADalton
  Yes.
14. MIMichael
  Still is kind of a necessary evil, but-
15. DADalton
  Yes
16. MIMichael
  ... uh, there's some hair on the process.
17. DADalton
  Wow, so much hair.
18. MIMichael
  And, you know, this is what founders like to talk about when they get together, is, like, all their horror stories. God knows I have some.
19. DADalton
  I think it's been so interesting 'cause I think oftentimes I'll talk to a VC and they will say, "Our process is amazing."
20. MIMichael
  Yep.
21. DADalton
  And then I will be like, "I have talked to founders who've pitched your firm."
22. MIMichael
  Yeah.
23. DADalton
  Um, y- there's one firm who's like, "Went to a partner meeting, full partnership meeting. No contact for two weeks." [laughs]
24. MIMichael
  They were thinking about it.
25. DADalton
  It's like, I, I... No, they weren't thinking about it. [laughs]
26. MIMichael
  [laughs]
27. DADalton
  But, um, it's, it's almost, almost they're blind. And, like, to lightly defend investors, I think that there's no upside for anyone ever telling you to your face they don't like your process and that they don't appreciate it, and so ev- both sides wanna preserve optionality. 'Cause if you're a founder, you're like-
28. MIMichael
  Fair, yeah, yeah
29. DADalton
  ... "I don't like you, and I don't like your process, and I'm mad at you." What? I would never advise a founder to tell an investor that. It's all downside. And so I, I genuinely think some of these folks aren't aware of how much psychic damage they inflict on people.
30. MIMichael
  So here's the thing. I'll... Let's say I'll give you that. Enough of these people were founders.
25:39 – 29:01
Community without board seats: quarterly peer groups modeled on YC group office hours
1. MIMichael
  Let's talk about community. So-
2. DADalton
  Yeah
3. MIMichael
  ... we, you invested in the company.
4. DADalton
  So if you think about why YC really worked, you go look at the first batch that Justin was in-
5. MIMichael
  Yep
6. DADalton
  ... and that Sam Altman was in.
7. MIMichael
  Yep.
8. DADalton
  And it was just like six companies.
9. MIMichael
  Yep.
10. DADalton
  You know? And in, with the benefit of hindsight, those were some of the most important people in the world.
11. MIMichael
  Yep.
12. DADalton
  And those people had a good experience, and they told other people about it.
13. MIMichael
  Yep.
14. DADalton
  And that ultimately the reason someone wants to be a part of YC is to opt in to being a part of the community and the other founders. It's not just the advice from the partners. That's only a small part of it.
15. MIMichael
  Yeah.
16. DADalton
  It's kinda like joining the club.
17. MIMichael
  Yes.
18. DADalton
  And so the community aspect is the following, and this is, you know, kinda bold.
19. MIMichael
  Yeah.
20. DADalton
  Number one, we're not gonna take a board seat.
21. MIMichael
  Yep.
22. DADalton
  Founders don't want someone who might fire them.
23. MIMichael
  [laughs]
24. DADalton
  It's weird to, to be begging for money from someone that might fire you.
25. MIMichael
  Yeah.
26. DADalton
  Very, very awkward situation again, and you don't really have time to get to know them well.
27. MIMichael
  No.
28. DADalton
  Certainly not to pressure test your relationship.
29. MIMichael
  No. [laughs]
30. DADalton
  Um... [laughs] And again, there's, there's great board members out there. I'm just saying it's a, it's a, it's a tricky situation.
29:01 – 30:48
Curating a peer group for AI builders with PMF—and why that’s rare and valuable
1. MIMichael
  You know, I remember Pedro from Brex came in to talk to the batch, and, and he said a version of this. He said, "I started accelerating so much more quickly when I stopped asking investors to summarize what they saw other great founders do, and I started to just ask those founders-
2. DADalton
  Directly
3. MIMichael
  ... what do they do." Most people going to YC, they're coming out of college, and they have a peer group that's like this, and then you just give them this peer group that's like, "Yeah, we all wanna make the next Google."
4. DADalton
  Yeah. Yeah.
5. MIMichael
  That's different. Like, you know, like, you, you just upleveled everyone's ambition. We've talked about this for years. Like, the same thing doesn't quite exist-
6. DADalton
  Yeah
7. MIMichael
  ... for later stage folks.
8. DADalton
  Well, think about it. We're curating the peer group of AI builders that have product market fit. Like, right?
9. MIMichael
  Yeah.
10. DADalton
  Like, that's the bar to get in-
11. MIMichael
  Yeah
12. DADalton
  ... to this-
13. MIMichael
  Yeah
14. DADalton
  ... is you have to have PMF.
15. MIMichael
  Yeah.
16. DADalton
  That's, like, pretty cool. There's not... You know, that's a much... [laughs]
17. MIMichael
  Yes.
18. DADalton
  That's a much more rare thing, 'cause think about how many of the really successful folks we know, they don't even have... They, they have their peer group from the batch, but they're all... People are at different levels of success, okay?
19. MIMichael
  Yes.
20. DADalton
  This is like, whoa, these people are all on my level. I think that's pretty powerful. And again, I'm, I'm super excited that we get to, to, to power this for people.
21. MIMichael
  You know, a lot of times when I have conversations with investors, I think that theyOvervalue the money they're giving.
22. DADalton
  Mm.
23. MIMichael
  And they overvalue their personal advice. What I like about this is, like, you're creating a structure where you're almost forced to not overvalue this. Like, you're almost-
24. DADalton
  Yeah
25. MIMichael
  ... forced to create value not in those areas.
26. DADalton
  Exactly. Yeah, we're happy to give advice, but this, the, the, the value prop is not we'll, we're the best advice givers.
27. MIMichael
  Yeah.
28. DADalton
  That's not the value prop at all.
29. MIMichael
  No.
30. DADalton
  Right?
30:48 – 34:39
Positive-sum thesis and the AI-driven operating mindset (MVP now, iterate like YC)
1. DADalton
  The other thing I feel like we learn from YC is PG is deeply anti-zero-sum thinking.
2. MIMichael
  Mm-hmm.
3. DADalton
  And so-
4. MIMichael
  Mm-hmm
5. DADalton
  ... the zero-sum way to think about startups is there's only one good startup that's started every year.
6. MIMichael
  Yeah.
7. DADalton
  And that if you don't fund that one startup, you're bad.
8. MIMichael
  Yes.
9. DADalton
  And he had real issues of skepticism around Y Combinator when he started it, 'cause they were like, "Oh, you're just gonna fund all the bad startups." [laughs]
10. MIMichael
  [laughs] Great model, dude.
11. DADalton
  This does- this doesn't make-
12. MIMichael
  [laughs]
13. DADalton
  This makes- this is the worst idea.
14. MIMichael
  [laughs]
15. DADalton
  Like, a lot of people were like, "You should just give up, man."
16. MIMichael
  You're gonna build a baseball team with all the worst baseball players. [laughs]
17. DADalton
  [laughs] Like, you're selecting for bad companies.
18. MIMichael
  [laughs]
19. DADalton
  Are you nuts? Okay? Th- seriously, and again-
20. MIMichael
  Yeah. Yes
21. DADalton
  ... that really was the-
22. MIMichael
  Yes
23. DADalton
  ... the public perception around it.
24. MIMichael
  Yes.
25. DADalton
  And his point, which he's written about a lot, is that there could be more success in the world-
26. MIMichael
  Yes
27. DADalton
  ... and that there is not a fixed amount of successful startups.
28. MIMichael
  Yes.
29. DADalton
  And there's not a fixed amount of wealth, and there's not a fixed amount of growth.
30. MIMichael
  Yeah.
34:39 – 35:08
How to apply: standardcap.com and closing remarks
1. MIMichael
  Yeah. It's on the nose. So, um, as a last thing, how do they, how do people find you?
2. DADalton
  Uh, standardcap.com.
3. MIMichael
  Okay.
4. DADalton
  Um, probably there'll be a link next to this video when we talk about it. And-
5. MIMichael
  There you go
6. DADalton
  ... there's just be an application, and it'll, it'll all be documented and super transparent.
7. MIMichael
  Okay. And the first 10 people who apply get 10 million bucks each.
8. DADalton
  From Michael. [laughs]
9. MIMichael
  [laughs] I like what you did there. Dalton, great chat.
10. DADalton
  All right. Appreciate it. Thanks, Michael. [outro music]

Episode duration: 35:09

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Decoding Series A “VC speak” and why fundraising feels broken

From founder experience to fund thesis: bringing YC-style simplicity to Series A

Why Series A remains painful: long cycles, ghosting, and “optional” relationship games

Introducing the Standard Capital team: Paul Buchheit (PB) and his “truth bomb” style

Brian Burg and the “software-first” operating model inspired by YC

The hidden downside of traditional A rounds: reputation networks and board risk

Standard Capital feature set: YC-style application, no warm intros, minimal founder time

Standard terms: publishing a standard Series A term sheet upfront

Name your price: 10% standard deal and founder-chosen check size

Service-level commitment: a firm yes/no timeline and reducing founder “psychic damage”

Community without board seats: quarterly peer groups modeled on YC group office hours

Curating a peer group for AI builders with PMF—and why that’s rare and valuable

Positive-sum thesis and the AI-driven operating mindset (MVP now, iterate like YC)

How to apply: standardcap.com and closing remarks

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