Uncapped with Jack AltmanSV Angel’s Ron Conway: Silicon Valley’s Relationship Broker | Ep. 45
EVERY SPOKEN WORD
40 min read · 7,660 words- 0:00 – 1:50
Intro
- RCRon Conway
You got to recognize the problem, want to solve it, and have conviction, and want to win, and off you go. I can call people up now and say, "You want to do it the hard way or the easy way?"
- JAJack Altman
God, I would hate to get that call from you.
- RCRon Conway
[laughs]
- JAJack Altman
[upbeat music] Thanks. Cool. All right. Well, this is my, uh, this is my first go at a live podcast, so I don't know what's gonna happen. But we both have a sufficient number of microphones on that this will be, this will be good.
- RCRon Conway
Yeah, yeah. And I, I feel rude not facing the audience, but because it's a podcast-
- JAJack Altman
The audience is out there
- RCRon Conway
... and my camera is there, if you're back there, don't think I'm rude.
- JAJack Altman
That's right.
- RCRon Conway
I'm doing what we do on podcasts. And I'm gonna leave the second we're done.
- JAJack Altman
Second we're done.
- RCRon Conway
Because I have Nancy and Paul Pelosi sitting with Gail and I on the floor of the Warrior game tonight, and if you know Nancy Pelosi, she is always prompt and has told me to be prompt.
- JAJack Altman
We will not be late. And, uh, we're gonna get to that type of thing as one of the sort of your superpowers. So everybody, uh, knows who you are, but, um, as I was thinking about this conversation and this audience, we have a bunch of seed investors here in, you know, various forms of the job and various stages in their career. And you are sort of the person who is the kind of archetype of angel investing. You've been sort of, um, almost embarrassingly successful investing in, like, Stripe and LinkedIn and Facebook and Google and PayPal and Airbnb and Pinterest and almost more than, uh, it's, like, reasonable to name. And so what I kind of wanted to do was to try to open up how you've made that happen and have you kind of look back over the decades of your investing and try to glean what an investor in twenty twenty-six can learn from you and your success and try to, you know, take, take for
- 1:50 – 8:39
From semiconductors to AI
- JAJack Altman
themselves. I think the place I wanted to start was, like, if you could try to kind of give your own narrative of your own career, starting from when you first got into investing and, like, what played out over time, just to sort of ground us in, like, what your sort of professional life has been all about.
- RCRon Conway
Well, I think it all starts with age and seniority. And speaking of age and seniority, uh, your mom is here, and I wanna recognize her.
- JAJack Altman
My mom's young.
- RCRon Conway
What?
- JAJack Altman
My mom is young. There's no age and seniority.
- RCRon Conway
Well, hey, I view myself as young too.
- JAJack Altman
Yeah, that's good. Yeah.
- RCRon Conway
But, uh, I wanna recognize that Mom is here. Uh, and we had a good time at Sam's fortieth. And this is why I bring up age. Because I've been through every technology cycle, starting with semiconductors, which is where I started my career. I did not like school. I couldn't wait to get the hell out of school. Uh, so I left San Jose State, and the next Monday, I started work at National Semiconductor in the Santa Clara Valley when there-- when most of Santa Clara Valley was fruit orchards and an occasional semiconductor factory. So I went, you know, I've been through the semiconductor phase, which kind of gave way to the computer phase, that gave way to the software phase, and then into the nineties with the internet boom, and then today, the AI boom. The AI boom is bigger than all of those combined, I swear to God. Uh, it's, it's hard to fathom. It's, it's hard to keep up with, but I think we all have that problem because there's so much change happening at once. Even in the internet boom, you, you could kind of keep track of things. You know, Netscape was mission central. Netscape's the one that allowed you access to all of this corpus of information on the web. And from that, you know, we, we, we got the internet boom. So I was fortunate to go work at National Semiconductor. A few people at National went off and started, started a company called Altos Computer. They asked me to join. This is when the microcomputers were disrupting DEC, Data General, Prime, Wang. Does anybody remember these names? But this little Altos computer was upending them. Uh, so it's, you know, technology is all about disrupting, so we were disrupting the mini computer companies. And I love it because I, I interviewed sitting on the floor. There are no desks, nothing. I, I was the head of sales, uh, on Walsh Road in, in, uh, Santa Clara, literally, like, five blocks from National Semiconductor. Um, and I, because I was the sales guy, and justifiably so, technology companies are engineer-driven. And our engineering, uh, CEO, Dave Jackson, who had more charisma, you know, this, this Brit just eked charisma-
- JAJack Altman
Mm-hmm
- RCRon Conway
... and helped me close anything that was hard to sell. "You're the sales guy. You sit next to the copy machine next to the factory."
- JAJack Altman
Mm-hmm.
- RCRon Conway
Which is just fine with me because I was traveling a lot anyway. So we, we, we built Altos. Altos went public. We had a, we had a very successful IPO.
- JAJack Altman
And what year was this?
- RCRon Conway
I wanna say eighty-six.
- JAJack Altman
Okay. Mid-eighties. Yeah.
- RCRon Conway
I'm gu-- But, but our stock went public at twenty-one. We had our closing dinner at Club twenty-one in New York. I told my wife when I left, "This is not a normal business trip. We're going public."
- JAJack Altman
Mm.
- RCRon Conway
"At the end of this week, we're gonna be what we call wealthy."
- JAJack Altman
[laughs]
- RCRon Conway
And she said, "You are so full of shit." And she happened to go to the bank the day we went public, and y- I sold some stock. And the guy goes, "This is the, like, the biggest deposit we've ever had." And she, she called me up in New York and said, "What in the hell is going on? You've done something bad." I said, "No, no, we j- we just went public."
- JAJack Altman
She's like, "You need more IPOs."
- RCRon Conway
What?
- JAJack Altman
She's like, "You need more IPOs."
- RCRon Conway
Yeah, yeah. [laughs]
- JAJack Altman
"This is great." Yeah.
- RCRon Conway
So, so I ran Altos, um, but we ran into bumpy water 'cause along came... You know, if you don't disrupt yourself, you will be disrupted. That's one of my, you know, benchma-benchmark, your new company. One of my benchmark sayings. If, if you don't disrupt yourself, you will be disrupted. And we, we were complacent. We had a great IPO. King, you know, we thought we were king of the hill. And along came this little thing called the PC connected to the Ethernet, which replaced these multi-user systems. So we had to sell the, we had to sell the company to Acer.The value of our real estate, and I told the Stays when I was selling them, "This real estate's worth a hundred million, so it doesn't really matter what you pay for anything else," and it's on Trimble Road. That real estate's now probably worth half a billion. So then I was out of a job. And Don Valentine was our lead board member. Everyone knows Don Valentine, the founder of Sequoia Capital. He came on the board very soon, was the only investor, came on the road show with us. And Don, uh, he, he has two sons and a daughter. Like any father with... You know, I'm gonna see where that daughter goes. He picked Altos out of his whole portfolio 'cause he liked our culture. And another thing that a founder has to do is build the culture. Some companies have bad culture. They allow philandering, et cetera, et cetera. That's not a good culture. That's... Those people are not role models. I'm just not gonna name them. Um-
- JAJack Altman
We can name a couple if you want, but they-
- RCRon Conway
But, but culture's important, and he knew, you know, that we built a great culture, and we had all these young kids. You- uh, Dave Jessee's kids worked there. It, it was a really cool place. And our motto was, "Play hard, work hard." There, there was alcohol, but it was on Friday night, and then Monday everyone back to work. So Don says to me, "What the hell are you gonna do?" And I said, "Let me tell you, I don't like managing people." I found that out-
- JAJack Altman
Yeah
- RCRon Conway
... 'cause there were close to a thousand people, and you just become an HR director, in my opinion.
- 8:39 – 11:46
Two investments that changed everything
- RCRon Conway
et cetera.
- JAJack Altman
Was there a moment in your early angel investing journey where something important happened? Like, was there a seminal investment that changed everything for you? Was it a slow build? Like, how did you go from just, you know, sitting in that first board meeting to, like, getting the traction that you got?
- RCRon Conway
We made a bunch of investments and a lot of them failed. Our very... The very first angel investment I ever made was a company called Natural Language Incorporated, Berkeley, California. Natural Language.
- JAJack Altman
Sounds like AI.
- RCRon Conway
AI.
- JAJack Altman
Yeah.
- RCRon Conway
My first investment ever. I'm not exaggerating. Now, I dredged this up after the AI. Uh, who would care five years ago? But, um... And it was run by, by, by, by two guy- John Manfredelli and Ginsburg. I forget his first name. That says my synapses are working right now.
- JAJack Altman
[laughs]
- RCRon Conway
Way too early for AI, so guess what we did. We had to l- like all good founders, let's go find a home for ourselves. We went up to Microsoft, and Bill Gates already was all over AI, and he wanted the team. So we brought the team up. We, we didn't tell him, but we, we were out of payroll. A- and, um, he, he goes, "I'm gonna buy the company," and I said, "Well, you gotta, you gotta buy it today." And he goes, "Hey, I'm gonna buy the company." I said, "No, we're gonna do it today, 'cause otherwise I- I'll go sell to somebody else." He got really furious and, uh, down came, uh, the guy who, who now owns the Giants, who was the general counsel, 'cause I said, "You can't leave until we sign the deal." And he goes, "Well, how about..." It became a game. "How about if I bring down my general counsel and he doesn't leave until the deal's done so I can go run my company?" I said, "No, that's good." Manfredelli still works at Microsoft. But the investment that kind of got the clock ticking and things going was Ask Jeeves. Um, Ben Rosen and I... Ben Rosen, um, w- was, uh, a, a Morgan Stanley star analyst who loved and covered Altos Computer. Morgan Stanley always... Altos was always a buy.
- JAJack Altman
Mm.
- RCRon Conway
B- we, we all loved each other. He went and started Rosen, Sevin Rosen Partners. Compaq and Lotus were his wins.
- JAJack Altman
Hmm.
- RCRon Conway
He retired from there when I was getting started and he said, "Ron, let's, let's go do this together." Just investing our own money together. Nothing formal. And, but Ben sourced Ask Jeeves, not me.
- JAJack Altman
Hmm. Hmm.
- RCRon Conway
The guy on the East Coast sourced Ask Jeeves in Berkeley. And him and LJ Sevin, they each had private plane. This is years ago, but they each had a private plane. I would pick them up at the airport and we'd go... W- we wouldn't have a board meeting. We'd have a build the company meeting, and the three of us, with the founders of Ask Jeeves-
- JAJack Altman
Right
- RCRon Conway
... built that company together, and it was so much fun. The funnest part was in the car, me, much younger than the two of them, chauffeuring these two, who were pretty old at the time, and the shit that they would say and the stories they would tell. And it was all about, we're gonna, we're gonna make Ask Jeeves a huge
- 11:46 – 14:57
Nonpassive angel investing
- RCRon Conway
company.
- JAJack Altman
It's, it's interesting hearing you talk about this 'cause you've used the language around, like, building companies a lot, and I know also in a lot of the companies you've been involved with later, like Airbnb and OpenAI, like I know you really get in there. I think there's like a reputation a lot of people associate with angel investors that is extremely passive, and I don't think you think of it that way. Like, have you... What is, what is your experience of what angel investing looks like when it's done well? Like, is it passive or should it be active?
- RCRon Conway
Well-
- JAJack Altman
What's the boundary?
- RCRon Conway
Well, with SV Angel, y- y- you're all in or don't bother. Uh, and we've always taken the approach that, you know, if SV Angel had a moniker, it would be Advocates for Founders. But, but how we approach investing is a holistic approach.
- JAJack Altman
Mm-hmm.
- RCRon Conway
We want to help the whole founder. We wanna help them-advance their career, 'cause, you know, when they start, they have no experience whatsoever. We want to help them build their team. But along the way, they're gonna run into all kinds of stumbling blocks, and we are afraid of no stumbling block. But these are unusual stumbling blocks. I get the call, um, uh, "My mom just got diagnosed with stage four breast cancer. How am I supposed to run this company and help my mom?" And off we go. We have formed a very close partnership with UCSF in San Francisco, one of the best medical centers west of the Mississippi. We know every department head. They make us go through procedures. Occasionally, I, I violate those and go directly, like, to the head of neurology, like I did last summer for a luminary in this valley. And I wanted, uh, I'm digressing here, but his name's Andy Josephson. I was in Venice. I got a call i-in the middle of the night from your brother, hint, hint what company it was, and I went to work. And before morning, Andy got the hint. 'Cause I said, "I wanna know what doctor you're going to assign." And he said, he gave me a bunch of names and shit, and I said, "Well, g-give me a name, give me a name." He goes, "How about if I am the attending?" The head of all neurology of UCSF. I said, "Andy, took you a while, but you got it right. Okay. He's in the car now coming to see you." I don't want anyone less than... So what we do is, is brings some comfort to the founder and the family.
- JAJack Altman
You're talking about the ability to do that-
- RCRon Conway
[laughs]
- JAJack Altman
... and, you know, right after this you are, you know, you're, we're leaving on time 'cause we're gonna go see Nancy Pelosi. And part of, you know, my experience with you when you invested in my company, Lattice, was somehow, and I knew you were involved in a lot of companies, but, like, if I called, you answered, and you, like, connected me to, like, Mark Benioff, and then he took it. And so-
- RCRon Conway
Now, don't ask me to do that now.
- JAJack Altman
I won't. One time. It was a one-time ask.
- RCRon Conway
We don't have troops, and I don't talk to Benioff.
- JAJack Altman
That's-- Well, we'll, we're g- politics comes in 20 minutes. Um, I, but
- 14:57 – 18:00
Becoming a relationship broker
- JAJack Altman
part of, I think, what allows you to do what you've done must be having the ability to be a power broker and to sort of have these connections. And I feel like in some ways, you know, there's firms now who have kind of like built a brand around that, like Andreessen comes to mind. But you obviously have done that on your own, and you've been able to be in touch with the right regulators so that you can help, you know, a marketplace that is running into issues with the city or, you know, just things like that with the hospital or CEOs of big companies. What did it take to get to a place that let you have those relationships where you could help companies in a real way with a small amount of your time? 'Cause I feel like that's the only way that this works.
- RCRon Conway
First, SV Angel, everyone in the firm has an attitude of, we are always on for founders. We're advocates for founders. We're always on. If they have a problem at 2:00 in the morning and I'm in Venice, I'm picking up the phone. But instead of the word power, I would swap in the word relationship. SV Angel has built a relationship network no VC comes close to. Andreessen Horowitz has tried a-a-and succeeded. They, uh, Mark and Ben take tiny salaries, and they have the huge service org. But some of it is organic. For me, it's because I started my career at National Semiconductor. Guess what Steve Jobs did when he started his P- you know, first it was semis and then the PCs. When Jobs started the PC, the only place he had to go to find executives was the semiconductor companies. So he went and got Mike Markkula to be the chairman, and he got Mike Scott, who was the head of hybrid semiconductors at National Semiconductor-
- JAJack Altman
Hmm
- RCRon Conway
... to be the president of Apple. I'm sitting in Mike Scott's office one day and he goes, "I'm going to Apple." And I said, "What the hell is Apple?" And he goes, "Well, it's this microcomputer thing, and I'm sick of building semiconductors." Uh, th-then, uh, Jobs came back to get Floyd Kvamme to be the first VP of marketing of, of Apple. So then, based on National Semi, I had two relationships at Apple Computer. And then just imagine that flywheel going for forty years, 'cause then I went into software. I got to know every single software executive. A bunch of them peeled off and went to internet companies. So when our founders need help, I have this Rolodex, uh, some of them are getting old, but I have this Rolodex of-
- JAJack Altman
Yeah
- RCRon Conway
... any company. And, and now what was fortunate is we ended up investing in some of the defining companies like Google, Twitter, Meta-
- JAJack Altman
Which creates more relationships
- RCRon Conway
... that a lot of our founders need r- uh, distribution deals from.
- JAJack Altman
Yeah.
- RCRon Conway
And we built the management teams of those companies. Those are very easy calls to call Chris Cox and say, "Hey, I'm sending somebody over."
- JAJack Altman
I assume you think that, like, being a relationship broker is, like, very important to being a good seed investor. What do you-
- RCRon Conway
It's our most valuable asset.
- 18:00 – 24:48
Building authentic relationships
- JAJack Altman
What, what, what do you do to nurture-- 'Cause, like, obviously, you know, it couldn't have happened without some of those early relationships, but there's a lot of other people who have early relationships like that, that don't turn into a relationship broker the way you have. So I'm curious if you can, like, talk about some of the things that you've done to, like, authentically build those. I've, like, watched, you know, you at sort of like an event where you're thinking about making... You, you pull two people together at a party and say, "You guys should talk." You're like, "I'm not gonna get anything immediate out of this," but I see you constantly brokering these sort of relationships. So, like, what's going through your head as you navigate the world to cultivate this?
- RCRon Conway
Well, first of all, you have to have a, a, uh, aA personality where you enjoy meeting new people. I love meeting new people. Uh, uh, my wife hates meeting new people. I would imagine forty percent of the population hates meeting new people. They're shy, they're not interested. There's various reasons. I happen to love meeting new people, so I love gathering people. If you don't have that trait, it's gonna be harder for you. Um, and then I love connecting people. You know, Marc Andreessen calls me the human router. That's a compliment. I love connecting people, uh, because something's good is gonna happen. I mean, if I made a list of all of them, it'd be a long list.
- JAJack Altman
So you're obviously not keeping track, though. You're of course just doing this, and you're just who knows what'll happen.
- RCRon Conway
Well, I-
- JAJack Altman
That's the mindset.
- RCRon Conway
I keep track of the big ones.
- JAJack Altman
Actually, do you? You have that-
- RCRon Conway
I keep track of the big... I, I, I keep-
- JAJack Altman
So tell me about that. You keep track in a big way.
- RCRon Conway
You know, very key intros.
- JAJack Altman
Yeah.
- RCRon Conway
Uh, yes. There's just... Somebody yesterday was telling me, I wish I could remember. But, but they were bragging about this thing, and I said, "Who do you think did the original intro?" And they kept talking, and I said, "I did that intro." And then they looked at me like I was nuts.
- JAJack Altman
Mm.
- RCRon Conway
And then I just described-
- JAJack Altman
Got it
- RCRon Conway
... it exactly, and they go, "Oh, yeah, you, you obviously put that deal together." I said, "Yeah, we put-- But then I moved to the next one."
- JAJack Altman
Yeah.
- RCRon Conway
We have a lot of founders. [chuckles]
- JAJack Altman
Yeah.
- RCRon Conway
And there's a lot going on.
- JAJack Altman
So is it a constant background function for you as you're meeting people of who could I be connecting here?
- RCRon Conway
Oh, hell yes. And we, we love helping all founders.
- JAJack Altman
Yeah.
- RCRon Conway
Oh, now the synapses are going to sleep.
- JAJack Altman
Yeah.
- RCRon Conway
Cloudflare.
- JAJack Altman
Yeah.
- RCRon Conway
Cloudflare. That company had all kinds of problems-
- JAJack Altman
Mm
- RCRon Conway
... in the early days. I helped that company because they were part of the ecosystem.
- 24:48 – 29:19
Going deep with OpenAI and Airbnb
- JAJack Altman
There, there's a few times where I've observed you going really deep with a company, that maybe you made a small investment in early and then you, you might have invested more, but, you know, you take these really deep engagements. I know you've worked with my brother at OpenAI. You've... I think you've gone deep with Airbnb. How do you think about that work as it relates to like the business of angel investing or seed investing? Like, is that something that you think is, looking back, has doing that with a small number of companies been important? Was that just fun? Is it both?
- RCRon Conway
SV Angel always gets involved at what we call inflection pointsUm, and we tell founders, "We're not gonna bother you, we're not gonna look over your shoulder, but if you're at an inflection point where it's kind of a life and death, that's kind of the shit that we're good at. So you come to us when you're at an inflection point." COVID hits, and Brian Chesky's board tells him, "Jesus, have, have we got a company?" And poor Brian was, was struck by that and calls me, and I said, "You, you, you bet your ass we have a company. You're gonna have to make some hard decisions." He already knew what they were. He was gonna have to lay off half the company. He-- These founders are smart. Um, but, but that was a crisis where h-he was being told th-that the game was over, and I was like, "The game is not over. The game is just starting."
- JAJack Altman
Mm.
- RCRon Conway
It was so bad, I said, "Hey, this is COVID. COVID's Armageddon. When the three of you are free, Joe, Nathan, a-and Brian, you call me. I don't care if it's three in the morning, but I'm, I'm gonna give you a little, little lecture about who's in charge here. You're in charge of your own destiny. I know we can go raise..." I forget, we, we raised a couple of hundred million. They were told that they could not raise anything. Zero. "Do not bother to raise money. You can't raise money. There's this thing called COVID." I said, "You're being given a bunch of shitty advice, and we're gonna go raise the money." And in ten days, we had the money. We didn't have it where I thought we were gonna get it, but that didn't matter. We got it from Silver Lake in some fancy instrument.
- JAJack Altman
Mm-hmm.
- RCRon Conway
God bless Silver Lake. And Silver Lake's quite happy right now with-
- JAJack Altman
[chuckles]
- RCRon Conway
... with, with that. So these inflection points, they're kind of ob... They're kind of ob-obvious. A founder who's really in need-
- JAJack Altman
Oh, they matter so much to a founder.
- RCRon Conway
And we're-
- JAJack Altman
Yeah
- RCRon Conway
... we're gonna put all of our stuff to the side and go help. The, the, um, Silicon Valley Bank crisis, which hit the day of our, um, founders summit three years ago, was definitely the most consequential project I've ever worked on, and probably the most consequential.
- JAJack Altman
Mm.
- RCRon Conway
And I never thought about that, thought about it till just a couple of months ago 'cause of having dinner with Wally Adeyemo, Deputy Secretary of Treasury under Janet Yellen during SVB.
- JAJack Altman
Mm.
- RCRon Conway
He said to me, "Do you understand, like, what you did and how it came down and-"
- JAJack Altman
What happened.
- RCRon Conway
"You got really nasty at the right time." Well, the government wasn't doing anything, and all we... All they needed to do was guarantee the deposits.
- JAJack Altman
So what'd you do?
- RCRon Conway
But well, I've... Well, I didn't sleep for three days, but by Sunday morning, about six hours before the Tokyo stock market opens, we had to have this solved, or there was going to be a worldwide, uh, financial crisis. And we had people in Washington, D.C., who, who just didn't get it. So by Sunday morning... Now, uh, and Sherrod Brown's one of them, the head of the banking committee. The... Hey, we can't spend too much time on this. But the FDIC, which is the one who had to process, "Hey, we're gonna guarantee, we're gonna guarantee the, the deposits," uh, they wouldn't budge. And I didn't realize it. They only report to Congress. It's very unusual, 'cause I'm like, "Who's your boss? I'm gonna go talk to them." And Nancy Pelosi, everybody. Their boss is Sherrod Brown and Maxine Waters. Sherrod in the Senate, Maxine in the House. So I was talking a lot to Sherrod and Maxine, and by Sunday morning, I got very, very firm with them. Like, "You're gonna be responsible for a worldwide crisis. I don't know what the hell you're doing, but get off your duffs and make the announcement."
- 29:19 – 31:39
Fighting for founders
- RCRon Conway
[chuckles]
- JAJack Altman
It's an interesting thing about you 'cause I feel like you, like you said, you love people. You're incredibly supportive of people. You're there for them in their times of need. But this story is an example, and there's a lot of other examples too, where you're also not afraid to fight and you're really willing to fight. Can you talk about, like, an investor's role in those situations? Like, you know, I think there was a story recently where Neil at Green Oaks was, you know, in a real fight with the government for a founder and, um, I think, you know, that's really important to do. You've been willing to do it. But it's sort of different than the sort of, you know, I love people, I'm going around and meeting pe- You know, it's like it doesn't naturally show up, I think, from you. It's coming from a place of, "I love my founders, so I'll fight for them." But can you talk about the mindset that lets you go fight?
- RCRon Conway
Well, you, you have to have conviction a-and know how to wiggle your way into to, to s- to solve that, to solve that problem. The, the, the OpenAI coup, you know, when Sam-
- JAJack Altman
Yeah
- RCRon Conway
... was asked to leave was a good example. I had conviction that the founder had been mistreated, and w-we, we were gonna make that right, and w-we were taking no prisoners, and we did... W-we knew what we had to do, and we went and did it. Um-
- JAJack Altman
Do you, do you think in general Silicon Valley, like, lacks the toughness needed in a lot of cases? 'Cause I feel like other industries often will do this sort of tougher work at a higher rate. Do you feel like enough of it happens in tech?
- RCRon Conway
Probably not. There's a, there's a lot of companies that, that go out of business because they shouldn't. The other thing, this might sound trivial, but I do not like losing. I am competitive.
- JAJack Altman
You have to be okay with being disliked or-
- RCRon Conway
Yeah
- JAJack Altman
... having people mad at you.
- RCRon Conway
Well, I think i-if you're fighting for a founder, you have to be fearless. You know, if I had a g- g- g... What do they call it? Gravestone. Just fearless for founders. That, that's what we're about.Because founders do get abused. I mean, what happened to Sam is unconscionable. But this, this does happen. And when that happens, we don't like it, and we get the blinders on until we fix it.
- JAJack Altman
I love it. One other investing topic I want to ask you about, and then I want to talk a little bit about politics.
- 31:39 – 33:20
Remarkable returns at seed
- JAJack Altman
I want to hear about the way you think about sort of building portfolios, and, um, SV Angel's had remarkably good returns. You've taken like, I think, a pretty diversified approach in general. Like, you've made a lot of investments, and then you've hit some really big companies. And it sounds like throughout your career you've invested in a lot of companies. Like, what's your mindset when you think about like what seed investing should look like in terms of concentration or exposing yourself to enough na- you know, companies and all these things?
- RCRon Conway
Yeah.
- JAJack Altman
Yeah.
- RCRon Conway
Well, today it's kinda easy because everything's AI.
- JAJack Altman
Yeah.
- RCRon Conway
But if you go back, um, you know, forty years ago, SV Angel has always been thematic investors. I like what I do because it's interesting, and I watch founders succeed. Jack Dorsey. Wat-watching Jack Dorsey go through shit at Twitter, resurrected Square. It, it, it's like the best thing that you could ever witness. We're always thematic, and we're thematic because it's interesting. So when I first started, I said, "What, what the hell do we think's gonna explode? Oh, you've got Yahoo and Ask Jeeves and Lycos." There were ten search companies. Something must be going on in search. Let's... So search became a theme.
- JAJack Altman
Mm.
- RCRon Conway
B2B became a theme. We've always been thematic. We have this piece of paper if I had it. We're always looking at probably six themes. Any company in that theme that comes in the door, we're gonna at least take a look at. If it doesn't fit those themes, we pretty quickly turn them down. So we-- SV Angel is very thematic-oriented. Now, within AI, we have to be thematic within AI because everything's AI. But, but we've, we've always been thematic investors.
- 33:20 – 37:17
The state wealth tax
- JAJack Altman
I know we don't have that much longer, and I really wanna talk to you about, um, politics. I know it's something that's important to you. You talked about how it's really important for you think people in tech, companies in tech to be engaged. I know right now you really care about what's happening in like the state, um, and in particular, I actually would love to start by talking about the, the wealth tax that is being proposed, and I know you've been fighting, and you care a lot about it. Can you talk about like why you think it's a bad idea?
- RCRon Conway
One more, one global. SV Angel's always been civically engaged and encouraged founders to be civically engaged, so that you know your local politicians, so when you have a crisis, you have a relationship. W-we're also philanthropically engaged. We believe founders, y-you want to give back. Guess what? You have this byproduct that morale explodes when the company is also has a philanthropic bent. But right now o-on this state wealth tax, w-you know, I hate to be pessimistic, and I'm not normally pessimistic, but we have a crisis where we have one SEI union that's associated with healthcare who has, uh, who has a ballot proposition. They need nine hundred thousand signatures for it, which is possible, and when they get that, it will go on the ballot. On top of all the other taxes we pay, it's a five percent wealth tax on every asset that you have. So i-if this happened, they would go through your house, appraise every piece of art, appraise your car, and whatever that is, you pay five percent. What makes it worse is if you have voting control, uh, like Larry and Sergey do. Larry and Sergey, let's say they own ten percent of Google today. They have eighty percent voting control. Uh, Zuckerberg has the same thing. A lot of founders have this. This h-horrible piece of legislation says your tax is based on whatever that top number is. So even though Larry and Sergey own ei- own eighty percent of Google, they wanna tax them for eighty percent of the market cap of the company. That is why Larry and Sergey had to leave. They didn't have a ch- It wasn't multiple choice for them.
- JAJack Altman
Mm-hmm.
- RCRon Conway
Um, so this is one of the most onerous pieces of proposed, you know, uh, a ballot initiative. Uh, our job is to get Gavin to negotiate this so that it doesn't get to the ballot. So maybe they don't get the signatures.
- JAJack Altman
Because you think if it gets to the ballot, it's got a good chance of c-going through?
- RCRon Conway
It could. We, we can't let that happen, in my opinion, and Gavin knows that, and Gavin's with us on that. So if they get the signatures, there will... A-and they have, they only have money for the signatures. They don't have money to even run a campaign. So, you know, they're not thinking that well. So at that point, there needs to be a negotiation to keep it off the ballot. That's why there are counter ballot initiatives against this also getting signatures. We need a couple of those to get the nine hundred K signatures as well, 'cause that will give Gavin some bargaining chips. The other labor unions are furious at the healthcare guys. Imagine what the teachers union thinks of this?
- JAJack Altman
Right.
- RCRon Conway
And all the other unions.
- JAJack Altman
This is all driven by the healthcare union?
- RCRon Conway
It's just one isolated healthcare union. There's even other healthcare unions. Th-this is just one, one guy who is self-appointed. Uh, so the other unions, you know, they're watching what's going on. Their blood pressure's going up. So that will be another, another negotiating, uh, lever that Gavin has. We must keep this off the ballot.
- JAJack Altman
Mm.
- RCRon Conway
So a whole bunch of work has to happen for,
- 37:17 – 40:59
Tech and politics
- RCRon Conway
for that to happen.
- JAJack Altman
So obviously you're putting a lot of work in now. Were you doing this work earlier in your career as well, or is this like something that you've gotten to like later in life as you've accumulated more influence?
- RCRon Conway
No, no, no, no, no. We started with SOPA/PIPA when music first came to the internet.Um, uh, I hate to say it, Orrin Hatch and Dianne Feinstein. Uh, all the media people said, "Oh, they're gonna take all of our music away." Also Napster, we were the first investors in Napster. And so w-we got involved in SOPA/PIPA when they, they tried to outlaw media, media generated by the internet on the web.
- JAJack Altman
Yeah.
- RCRon Conway
This is crazy. Topher will remember this. I said to... And, and so I, I was the rookie, so all these other lobbyists were telling us what the hell to do. I said, "What the hell do we do? We gotta stop this. This is crazy." "Well, you should go down to city hall and stand on a soapbox." I said, "Oh, I've heard that saying all the time." And they said, "No, no, no, we're not kidding."
- JAJack Altman
Literal.
- RCRon Conway
"Try it." And we were in the middle of our weekly meeting, and I... And they said, "Get down to city hall. There's a whole bunch of cameras down there. You go down and you get o- literally get on a soapbox."
- JAJack Altman
Wow.
- RCRon Conway
"We'll meet you there, and you give your speech. A lot of good shit's gonna happen." I felt like a fool. I got on the soapbox, gave my lecture, lots of cameras, and we started, we started to turn the tide.
- JAJack Altman
That's crazy.
- RCRon Conway
And, and O-O-Orrin Hatch, uh-
- JAJack Altman
Yeah
- RCRon Conway
... Sean Fanning helped a lot with that. I remember Sean Fanning happened to be with Orrin Hatch that day, and I said, "Sean, whatever the hell you're talking about, stop talking about that and tell him about this." He was the first senator to say, "I'm voting against this," my pal Sean Fanning.
- JAJack Altman
Yeah, I mean, it kind of goes back to the thing I said earlier about your willingness to fight. I think a lot of people don't do this even if they believe certain things, 'cause they're like, "You know, I gotta go, I gotta go have a lot of people mad at me, and I might... You know, if I'm running a company, a lot of, you know, things internally are gonna come up, or just, you know, the media's gonna say things, and I'm tired, and I've got a family, and I'm busy." And so I think a lot of people don't do it, not 'cause they don't care, but it's takes a lot of, like, courage and energy to do it.
- RCRon Conway
You gotta recognize the problem, want to solve it, and have conviction, and want to win.
- JAJack Altman
Yeah.
- RCRon Conway
And off you go. In my later years, uh, because I'm the one doing it, and I've done enough of these, I can-
- JAJack Altman
Yeah
- RCRon Conway
... I can call people up now and say, "You wanna do it the hard way or the easy way?"
- JAJack Altman
[laughs] God, I would hate to get that call from you.
- RCRon Conway
[laughs] Well, I did a, I did one today. I, uh-
- JAJack Altman
That'd be tough
- RCRon Conway
... I d- I did one today.
- JAJack Altman
That's, that's, that's tough. You mentioned Topher. You, um, you have, you know, three kids and work with, you know, kids over the course of your career. I think that's, like, a beautiful thing and, um, I've got kids and something I've thought about. I'm just curious what that's been like for you. Like, it seems, seems awesome.
- RCRon Conway
Um, it, it, it, it's been awesome. I did not ask my sons to get in the investing business. I thought it was interesting, but I, I don't tell people it's interesting. Uh, but one by one, they all left jobs in, in LA, 'cause they all went to UCLA, and, and came up and said, "Hey, this looks pretty interesting." Topher left his job in LA and said, "I just wanna come find a place to work, so I'll sit in your weekly meetings and pick a company and start interviewing at a bunch of companies." Uh, and like three weeks later he goes, "I, I, I don't wanna interview. This is like... It's interesting just sitting here."
- JAJack Altman
It just seems like a, such a good way to, like, have adult ongoing relationship with your kids.
- RCRon Conway
Of course. And we all operate out of the, the same office.
- JAJack Altman
That's awesome.
- RCRon Conway
Ronnie has A Capital, Danny has Symphony, and we love Founders.
- JAJack Altman
So good. Well, Ron, thank you so much for doing this. You're a total legend. I love learning from you. Thanks for making time for it.
Episode duration: 41:00
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