Skip to content
YC Root AccessYC Root Access

Lecture 9 - How to Raise Money (Marc Andreessen, Ron Conway, Parker Conrad)

Lecture Transcript: http://tech.genius.com/Marc-andreessen-lecture-9-how-to-raise-money-annotated Sam leads a panel Q&A on Fundraising in this lecture with Marc Andreessen, Founder of Netscape and Andreessen Horowitz, Ron Conway, Founder of SV Angel, and Parker Conrad, Founder of Zenefits. See Ron Conway's slide, and readings at startupclass.samaltman.com/courses/lec09/ Discuss this lecture: https://startupclass.co/courses/how-to-start-a-startup/lectures/64038 This video is under Creative Commons license: http://creativecommons.org/licenses/by-nc-nd/2.5/

Sam AltmanhostRon ConwayguestMarc AndreessenguestParker Conradguest
Oct 21, 201450mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 4:40

    What makes investors say yes: founder traits and the “outlier” mindset

    1. SA

      Um, so I wanna start with, uh, a question for, for Mark and Ron, which is by far the number one question. Probably gonna be a lengthy answer. Um, what makes you guys decide to invest in a founder or a company? Either of you can start.

    2. RC

      Go ahead.

    3. MA

      No, no, no, no, no.

    4. RC

      You go ahead.

    5. MA

      [laughs] You first.

    6. RC

      Um, well, we have a slide on that. [laughs] We have, we have an app for that.

    7. SA

      They're bringing some-

    8. RC

      Um-

    9. SA

      Mark can start while we try to get your slide up.

    10. RC

      Okay.

    11. MA

      [laughs]

    12. SA

      Yeah.

    13. RC

      All right.

    14. SA

      We're bringing in AV guys, so...

    15. RC

      So s- say the question again.

    16. MA

      Go ahead.

    17. SA

      What makes you decide to invest in a founder or a company?

    18. RC

      So what, what makes us invest in a company is based on a whole bunch of characteristics. I've been doing this, uh, since 1994, right before Mark got out of, uh, the University of Illinois. So SV Angel and its entities have invested in over 700 companies. So to invest in 700 companies, that means we've physically talked to thousands of entrepreneurs, and there's a whole bunch of things that just go through my head when I meet an entrepreneur, and I'm just gonna talk about what some of those are. Um, and literally, while you're talking to me in the first minute, I'm saying, "Is this person a leader?" You know, is this person rifle focused and obsessed by the product? Um, I'm hoping, 'cause usually the first question I ask is, "What inspired you to invent this product?" I'm hoping that it's based on a personal problem that that founder had, and this product is the solution to that personal problem. Um, then I'm looking for communication skills because if you're gonna be a leader and hire a team, assuming your product is successful, you've gotta be a really good communicator, and you, you have to be a born leader. Um, now some of that, you might have to learn those traits of leadership, but, but you better, you better take charge and be able to, to, to be a leader. Uh, I'll switch back to the slide, but let's let Mark...

    19. MA

      Yeah, I, I agree with all that. I guess, and there's a lot of detail to this question that we could talk about, um, and we may be even a little bit different than Ron in that-- W- where we are different than Ron, that we actually invest across stages. So we invest at the seed stage, venture stage, growth stage, um, and then we invest in a variety of different business models, consumer, enterprise, and a bunch of other variations. So there are kind of fine-grained answers, you know, that we could get into, uh, if there are specific questions. Uh, two general concepts that I would share. Um, so one is the venture capital business is 100% a game of outliers. It's extreme exceptions. Uh, right? So the conventional statistics, uh, are, you know, on the order-- is on the order of 4,000 venture fundable, uh, companies a year that wanna raise venture capital. Uh, about, you know, about 200 of those will get funded by what's considered a top-tier VC. Um, about 15 of those will someday get to $100 million in revenue, um, and those 15 from that year, uh, will generate something on the order of 97% of all the returns, uh, for the entire, uh, category of venture capital in that year. Um, and so venture capital is such an extreme feast or famine business. You're either in one of the 15 or you're not, uh, or you're in one of the 200 or you're not. Um, and so y- the, the big thing that you're just looking for, no matter, you know, which sort of particular kind of criteria we talk about, they all have the characteristic of you're looking for the extreme outlier. Um, the other thing I'd highlight that we think about a lot internally is we have this concept, invest in strength, um, versus lack of weakness. Um, and at first, that sounds obvious, but it's actually fairly subtle. Um, which is sort of the, the default way to do venture capital is to kinda check boxes, right? So, you know, really good founder, really good idea, you know, really good, uh, you know, uh, products, uh, really good initial customers. Check, check, check, check. Okay, this is reasonable. I'll put money in it. Um, but what you find with those, those sorta checkbox deals, and they get, they get done all the time, but what you find is they often don't have something that really makes them really remarkable and special, right? They don't have an extreme strength that makes them an outlier. On the other side of that, the companies that have the really extreme strengths often have serious flaws. Um, and so, uh, so one of the cautionary lessons of venture capital is, if you in-- if you don't invest on the basis of serious flaws, you don't invest in most of the big winners, and we could go through example after example after example of that. Uh, but that would have ruled out almost all the big winners over time. Um, and so at least what we aspire to do is to invest in the one-- in, in the, in the startups that have a really, really extreme strength, uh, along an important dimension, and then be willing to tolerate some other, uh, you know, set of weaknesses.

    20. SA

      Ron, we got your slide up.

  2. 4:40 – 5:55

    Nailing the one-sentence pitch and founder execution habits

    1. RC

      Okay. I, I don't wanna over-dwell on, on the, uh, the slide, but, um, when you first meet an investor, you've gotta be able to say in one compelling sentence that you should practice like crazy what your product does, so that the investor that you're talking to immediately can picture the product in their own mind. Probably 25% of the entrepreneurs I talk to today still, after the first sentence, I don't know what they do. And as I get older and less patient, I say, "Back up. I don't even know what you do yet." Um, but so try and get that perfect. And then I wanna skip to the second column. You have to be decisive. The, the only way to make progress is make decisions. Uh, procrastination is the devil in startups. So no matter what you do, you gotta keep that ship moving. If it's, uh, decisions to hire, decisions to fire, y- you gotta make those, uh, quickly. Uh, all about building, uh, a great team. Once you have a great product, then it's all about execution and building a great team.

  3. 5:55 – 9:15

    Parker’s fundraising journey: from repeated rejection to “be the Twitter guys”

    1. SA

      Parker, could you talk about your seed round and how that went and what you wish you had done differently as a founder raising money?

    2. MA

      [clears throat] Sure. So, um-

    3. PC

      Um, y- um, actually, I think m- my, my seed round, uh, most of the stuff with my current company felt like, uh, from a fundraising perspective, felt like it came together relatively quickly. Um, but actually one of the experiences that I had, I, I started a company before this that I was at for about six years, and my co-founder and I pitched, um, [clears throat] almost every VC firm in Silicon Valley. I mean, we literally went to, like, 60 different firms, and they all told us no. And we were constantly trying to figure out, you know, how do we, how should we adjust our pitch, and how should, you know, how should we do the slides differently, and [clears throat] how do we tweak the story, and that sort of thing. And at one point, there was this sort of key insight that, um, someone gave me when I was pitching, actually someone at Coastal Ventures. Um, and, um, the, this VC said, "Guys," you know, he was looking for some very particular kind of analysis [clears throat] that we didn't have on hand, and he was like, "Guys, you don't get it." He was like, "You know, if you guys were the Twitter guys, you guys could come in and you could just be like, 'Blah, blah, blah, blah, blah,' and like, you know, put whatever up here, and, like, we would invest in you. But, like, you guys aren't the Twitter guys, so you need to make this really easy and have, like, all this stuff ready for us and all this kind of stuff." And I, I took, like, the exactly opposite lesson of what he, I think, wanted me to take away from that with, which was like, "Geez," like, "I should really just figure out a way to be the Twitter guys." [laughs]

    4. MA

      [laughs]

    5. PC

      And, like, that's, that's the way to do this. Um, and so, so actually, like, one of the reasons I, I started my current company, or one of the things I, I found very attractive about Zenefits is [clears throat] as I was, as I was thinking about it, it seemed like a business. I was so frustrated from this experience of having tried, you know, for, like, two years to raise money from, from VCs, and then sort of decided, like, to hell with it. You can't count on there being capital available to you. Um, and so this s- the business that I started seemed like one that, like, it, like, actually just maybe I could do it without raising money at all. Like, there might be a path [clears throat] to kind of, you know, there was enough cash flow, it seemed compelling enough that I could, like, do that. And it turns out that those are exactly the kinds of businesses that, that, that investors love to invest in. Um, and, and it made it incredibly easy. Um, so I, I actually think, like, I mean, Sam was very kind and said I was an expert fundraiser. The reality is, like, I don't actually even think I'm very good at fundraising. Um, [clears throat] it's probably something I'm, like, less good at than, than, you know, sort of other parts of my job. Um, but I think if you can, if you can build a business that's, you know, where everything is, like, moving in the right direction, if you can, like, be the Twitter guys, like, nothing else matters. [clears throat] And if you can't, like, you know, be the Twitter guys, it's very hard for anything else to make a difference, um, for things to kind of come together for you.

    6. MA

      So-

    7. RC

      Why, why did that VC say be like the Twitter guys when the fail whale dominated the site for two years?

    8. PC

      [laughs]

    9. MA

      'Cause it kept growing anyway.

    10. RC

      'Cause it worked.

    11. MA

      Yeah. [laughs]

    12. RC

      The other point I wanna make is bootstrap as long as you possibly can. I met with one of the best founders in tech who's starting a new company, and I said to her, "Well, when are you gonna raise money?" "I might not." And I go, "That is awesome." You know, never forget the bootstrap.

  4. 9:15 – 11:19

    Marc’s core fundraising truth: make the business better, not the pitch

    1. MA

      So I was actually gonna close on, on, on, on this, but I'm just gonna accelerate it 'cause Par- Parker I think just gave you the most important thing you'll ever hear, uh, which is what I was also gonna say. Uh, which is, so the, the number [laughs] number one piece of advice that I've ever, uh, read and that I, that I, that I tell people, uh, on these kinds of topics is always, uh, it's from s- the comedian Steve Martin, [clears throat] who I, I think is an absolute genius, uh, wrote a great book on his startup career, which obviously was very successful. The book's called Born Standing Up, and he, literally it's a short little book, and it describes how he became Steve Martin. And the heart of the book is he says, you know, what's the key to success? He says the key to success is be so good they can't ignore you. Uh, right? And so in a sense, like, all this, it, you know, we're gonna have this entire conversation, and I'm sure we'll keep having it about how to raise money, but in a sense it's all kind of beside the point. Um, because if you do what Parker's done and you build a business that is going to be a gigantic success, then investors are throwing money at you. Um, and if you come in, you know, with a theory and a plan and no data, um, um, and you're just one of, you know, the next thousand, um, it's gonna be far, far harder to raise money. Um, the other, so that's the positive way to put it, is kind of be so good they can't ignore you. In other words, you're almost always better off making your business better than you are making your pitch better. Um, the other thing the, the, that's the positive way of looking at it. The negative way of looking at it or the cautionary lesson is that, um, and this gets me in trouble every single time I say it, but I'm on a ton of flu medication, so I'm gonna go ahead, uh, and just let it rip. Um, raising venture capital is the easiest thing a startup founder is ever going to do. Um, y- as, as compared to recruiting, right? As, as compared to recruiting engineers in particular, as, as compared to recruiting engineer number 20, um, is far harder than raising venture capital. Um, selling, uh, to enterprise customers is harder. Um, getting viral growth going on a consumer business is harder. Getting advertising revenue is harder. Um, almost everything you'll ever do is harder than raising venture capital. Um, and so I think Parker is exactly right. If you get in a situation in which raising the money is hard, um, it's probably not hard compared to all the other stuff that's about to follow. Um, and it's very important to bear that in mind. Um, you know, it's often said raising money is not actually a success. It's not actually a milestone, uh, for a company, and I think that's true, and I think that's the underlying reason. Um, it just, it puts you in a position to be able to do all the other harder things.

  5. 11:19 – 14:00

    Risk and cash: the onion theory for milestones, rounds, and burn

    1. SA

      Related to that, um, w- what do you guys wish founders did differently when, when raising money? Um, and specifically Marc, you know, you mentioned this relationship between money and risk and how that applies here, so maybe we could start with that.

    2. MA

      Yeah. So the single biggest thing that people are just missing, um, and I think it's all of our faults that we're all not talking about it enough, um, but I think the single biggest thing entrepreneurs are missing, both on fundraising and how they run their companies, is the relationship between risk and cash. Um, so the relationship between risk and raising cash, and then the relationship b- with risk and spending cash.Um, so I've always been a fan of something that Andy Rachleff taught me years ago, uh, which he called the, he calls it the onion theory of risk. Um, which basically is you can think about a startup, like, on day one, um, as having every conceivable kind of risk, right? And you can basically just make a list of the risks. And so you've got, you know, founding team risk. You know, do the founders, are the founders gonna be able to work together? Do you have the right founders? You're gonna have product risk. You know, can you build a product? You'll have technical risk, right, which is maybe you need a machine learning breakthrough or something to make it work. Are you gonna be able to do that? Um, you'll have, you know, launch risk. Will the launch go well? You'll have, you know, market acceptance risk. You'll have revenue risk. Uh, a, a big risk you get into in a lot of businesses, uh, that have a sales force is can you actually sell the product for enough money to actually pay for the cost of sale? So you have cost of sale risk. Um, if you're a consumer product, you'll have viral growth risk, where you get this thing of viral growth. And so a startup at the very beginning is basically just this long, [laughs] this long list of risks, right? And then the way that I always think about running a startup is also the way I think about raising money, which is it's a process of peeling away layers of risk as you go, right? And so you raise seed money in order to peel away the first two or three risks, right? The founding team risk, the product risk, maybe the initial launch risk. You raise the A round to peel away the next level of product risk. Maybe you peel away some recruiting risk, 'cause you get your full engineering team built. Maybe you peel away some customer risk, 'cause you get your first five beta customers, right? And so basically, the way to think about it is you're peeling away risk as you go. You're peeling away risk by achieving milestones. And then as you achieve milestones, you're both making progress in your business and you're justifying raising more capital, right? And so you come in and you pitch somebody like us, and you say you're raising a B round. You know, the best way to do that with us is you say, "Okay, I raised a seed round. I achieved these milestones. I eliminated these risks. I raised the A round. I achieved these milestones. I eliminated these risks. Now I'm gonna raise a B round. Here are my milestones. Here are my risks. And then by the time I go to raise a seed round, here's the, here's the state that I'll be in." And then you calibrate the amount of money that you raise and spend to the risks that you're pulling out of the business. Um, and I, I go through all this, in a sense this sounds kind of obvious, but I go through all this 'cause it's a systematic way to think about how the money gets raised and deployed, as compared to so much of what's happening, especially these days, which is just, "Oh my God. Let me go raise as much money as I can. Let me go build the fancy offices. Let me go hire as many people as I can, and just kinda hope for the best."

    3. SP

      Great.

  6. 14:00 – 15:41

    Fundraising process mistakes: NDAs, ego, speed, and getting commitments in writing

    1. RC

      Uh, I'm gonna be tactical. Um, uh, for sure don't ask people to sign an NDA. Uh, we rarely get asked anymore, 'cause most founders have figured out that if you ask somebody for an NDA at the front end of the relationship, you're basically saying, "I don't trust you." So the relationship between investors and founders involves lots of trust. Um, the biggest mistake that I see by far is not getting things in writing. You know, the, my advice on the fundraising process is do it as quickly and efficiently as you possibly can. Don't obsess over it. For some reason, founders get their ego involved in fundraising, where it's a personal victory. It is the tiniest step on the way, as Mark said, and it's, it's, it's the most fundamental. Hurry up and get it over with. But in the process, when somebody makes a commitment to you, you get in your car and you type an email to them that confirms what they just said to you. Because investors have, a lot of investors have very short memories, and they forget that they committed to you that they were gonna finance, or they forget what the valuation was, or that they were gonna find a co-investor. You can get rid of all that controversy just by putting it in writing, and when they try and get out of it, you just resend the email and say, "Excuse me." Um, and hopefully they've replied to that email anyway. So get it in writing. Um, i- in meetings, take notes and, and follow up on what's important.

  7. 15:41 – 20:13

    How seed and Series A decisions really get made (SV Angel vs. venture firms)

    1. SA

      I, I wanna talk a little bit more about tactics here. Um, just how does the process go? Can people email you guys directly? Do they need to get an introduction? How many meetings does it take for you to make a decision? How do you figure out what the right terms are? When can a founder ask you for a check?

    2. RC

      You wanna?

    3. MA

      That was about, that was like, that was like six questions.

    4. SA

      That's a lot of things.

    5. MA

      Yeah, okay, good.

    6. SP

      [laughs]

    7. RC

      It's the process.

    8. MA

      Why don't you describe, why don't you describe, 'cause you'll describe seed, and then I'll, I'll describe-

    9. RC

      Yeah, yeah. So yeah, so, uh, SV Angel, it, you know, invests in seed stage startups, so we like to be the very first investor. We normally invest today at around, it's a million to two million. Uh, it used to only be a million. So if we invest 250K, that means there's five or six other investors in that syndicate. Um, SV Angel has now a staff of 13 people. I do no due diligence anymore. I am not a picker anymore. I just help on major projects for, for the portfolio companies that are starting to mature. But we have a whole team that processes. We, at SV Angel, end up investing in one company for every 30 that we look at, and we end up investing at about one a week. Uh, I think what's interesting is we don't really take anything over the transom. Uh, our network is so huge now that we basically just take leads from our own network. Uh, we evaluate the opportunity, uh, which means you have to send in a really great, short executive summary. And if we like that, we actually vote, although I'm not in this meeting anymore, but the group actually votes on do we make a phone call? That's how important time is in this process. And if enough of the, of the, uh, of the team at SV thinks it's interesting, then they appoint a person to make a phone call to that founder, usually somebody on our team who has domain experience. If the phone call goes well, bingo, we wanna meet youIf SV Angel asks you for a meeting, we are well on our way to investing. If that meeting goes well, uh, we'll do some background checks, um, backdoor background checks, uh, get a good feeling about the company, the market that they're going after, uh, and then, and then make the commitment to invest, and then start help, start helping get other value add investors to be part of the syndicate. Because if we're gonna have an equal workload, we want the other investors in this company to be great angel investors as well.

    10. MA

      So I'll talk a little bit about the venture stage, kind of the ser- the series A stage, you know, that follows. Um, so to start with, I think it's fair to say at this point that all, the top tier venture capitalists, um, pretty much only invest in two kinds of companies at the Series A stage. One is if they have previously raised a seed round. Um, and so it's, it's almost always the case when we're doing a series A investment if the company has a million or $2 million from seed financing, you know, from, from Ron and, and, and folks that he likes to work with. Um, almost always, by the way, Ron, just to be clear, um, and folks he likes to work with. Um, so first, either they have a, a seed round. So if you're going to raise series A, the first thing to do is raise seed, 'cause, 'cause that's, that, that's generally the, the, the, the way the se- uh, the progression works at this, at this point. Um, every once in a while we'll go straight to A, uh, on a company that hasn't raised a seed round. Really the only times though that that happens are when it's a founder who has been a successful founder in the past, um, and is almost certainly somebody we've worked with in the past. Um, so we actually, we have an announcement, we just, we just did one of these we'll announce in a few weeks, um, where it's a founder who I was an angel investor, actually I think Ron was also, uh, in, uh, the team's company in like 2006. Um, and then the company did its thing, and then ultimately was acquired by another big company. Um, and then that team now is, is starting their new thing. So in that case, we're just gonna jump it straight to an A, uh, 'cause they're so, they're so well known and they have a plan all lined up for it. But, you know, that, that's the exception. It's almost always, uh, proceeded, um, uh, proceeded by a seed round. Um, the other thing is, uh, yeah, I guess I, I mentioned this already, but we, we get, similar to what Ron said, we get, uh, 2,000 referrals a year through our referral network. Um, a very large percentage of those are referrals through the seed investors, and so by far the best way to get the, the, by far the best way to get the best introductions to the A stage venture firms, uh, is to be able, is to work through the seed investors, uh, or to be able, or to work through something like Y Combinator.

  8. 20:13 – 23:43

    Terms that matter: choosing seed investors, valuation thresholds, and negotiation reality

    1. SA

      Uh, speaking about terms, um, what, what terms should founders care most about, and how should founders negotiate? Maybe Parker we can start with you on this one.

    2. PC

      Sure. Well, I think, um, probably precisely because of what Mark said, the most important thing at the seed stage is, is picking the right seed investors because, um, they're gonna sort of lay the foundation for future fundraising events. You know, they're gonna make the right introductions. And I think there's a enormous difference in the quality of, of an introduction. So if you can get a really good introduction from someone who a venture capitalist really trusts and respects, um, you know, the likelihood that that's gonna go well is so much higher than sort of like a, a, you know, a much, kind of a, a much, a much more lukewarm introduction from someone they don't know as well. Um, so at the seed stage, probably the best thing you can do is find the right investors. Um, and then, um-

    3. SA

      How, how does a founder know who the right investors are?

    4. PC

      Well, I think it's really hard. I mean, so one of the best ways, I mean, you know, not to give a plug for YC, but, um, you know, YC does a very good job of telling you exactly who they think those people are, um, and, um, and can really direct you towards... And, and I actually have found it to be, like, pretty accurate in terms of, like, who you guys said were gonna be the best people. Like, they ended up being the most helpful, um, as, as we were raising subsequent rounds, sort of, you know, really provided the best introductions. And the people who maybe I thought were, you know, seemed okay, but were not, you know, like, were not as sort of highly rated by YC, like they, they, that ended up being the case that they were kind of, like, real duds, um, in the seed round. Um-

    5. SA

      Someday we're gonna publish our list of these people.

    6. PC

      Oh my God, there are gonna be a lot of upset people when we do. [laughs]

    7. SA

      Um, so how, how do you think about negotiation? How do you figure out what the right valuations are for a company and what other terms?

    8. PC

      Well, so I started out, I mean, uh, like, when I was raising my seed round, I really didn't know. And, and I mean, we had conversations about this. I, I probably started a little too high on the valuation side. Um, and, uh, the, so as you guys know, like, Y Combinator sort of culminates in this thing called Demo Day, where, um, you get sort of all of these investors at once who are looking at the company. Um, and I started out, um, trying to raise money at, like, a 12 or a $15 million cap, um, uh, whi- which is, like, not quite the same thing as a valuation, but, but sort of rou- roughly equivalent. Um, and everyone was like, "That's crazy." You know, "That's, that's completely nuts." They're like, "You're, like, too big for your britches." Like, that, "That's completely, just wouldn't work." And so I ended up sort of walking it down a little bit and, and within sort of the space of a couple days said, "Okay, well, I'm gonna raise it nine." And then suddenly, for whatever reason, that had sort of hit some magical threshold on the seed, seed stage that it was below 10, that it, it seemed like there was, like, almost infinite demand for the round at a, at a, like, at a 9 million cap. So no one would pay 12, but at a $9 million cap, um, it felt like I probably could have raised, like, $10 million. Um, and the, the round came together, um, you know, in, in, in roughly about a week, um, at that point, once I kinda hit that threshold. And so there seemed to be, and they probably fluctuate over time, but there seem to be these sort of, like, thresholds, particularly for seed stage companies that, that, that investors will think of as, like, this is what, y- you know, like, above this level is, like, crazy. That, like, doesn't matter, and there's sort of like a rough kinda range that, um, that people are willing to pay. And so you just kinda, like, y- you, you have to just kind of figure out what that is. Um, get the money that you need. Don't, don't raise any more than you need, and, and, and just kinda get it done. And, uh, you know, at the end of the day, like, whether, whether you raise it 12 or 9 or, like, 6, it's not, it's not a huge deal, um, for the rest of the company.

  9. 23:43 – 26:28

    How much to sell and cap table health: avoiding demotivation and “broken” ownership

    1. SA

      Is there a maximum amount that the company you think that founders should sell in their seed round and A round, beyond which problems happen?

    2. SA

      For any of you

    3. RC

      Feel like that's a better question for you [laughs]

    4. PC

      Well, gosh, I don't know. I mean, um, y- y- you know, I think, um, on, on, I, I mean, I don't, I don't know the rules on this stuff. I think, um, the, the tricky thing is, is, I mean, it seems like they're kind of rough, particularly for, like, a series A. Um, you're probably gonna sell somewhere between, you know, 20 and 30% of the company because, um, you know, below, v- v- venture capitalists tend to be a lot more ownership focused than price focused. Um, so you might find that it's actually, sometimes when companies raise r- really big rounds, it's because, you know, the investor basically said, "Listen, I'm not gonna go below 20% ownership, but I'll pay more for it." Um, and so, and, and, and above 30%, probably sort of weird things happen to the cap table, like it gets hard, you know, down the line to sort of, um, you know, for there to be an affirm on the cap table for everyone. And so everything seems to come in in that range. Um, so, uh, y- you know, that, that probably just is what it is, um, in most cases. So at, you know, at the seed stage, w- I mean, what I've heard, there doesn't seem to be any magic to it, but it seems like 10 to 15% is what, what people say. But the, the, I, that's mostly just what I've heard. I- I'm curious in you guys' thoughts.

    5. RC

      Yeah, I, I, I, I agree with all that. Um, I think it's important to get the process over with. Um, but I think it's important for the founder to say to themselves in the beginning, at, at what point does my ownership s- start to demotivate me?

    6. PC

      Mm-hmm.

    7. RC

      Um, because if there's, like, a 40% dilution in an angel round, I've actually said to the founder-

    8. PC

      Mm-hmm

    9. RC

      ... "Do you realize you've already doomed yourself? You know, y- you're gonna own less than 5% of this company if you're a normal company." And so these guidelines are important, the, the, the, you know, the f- the 10 to 15%, because if you keep giving away more than that, there's not enough left for you and the team, and you're the ones doing all the work.

    10. PC

      Yeah.

    11. MA

      We'll actually, we'll walk, we've, we've seen a, we've seen a series of interesting companies in the last five years that, where they just, y- we just walk, oh, simply on, we won't, we won't, uh, bid simply on the basis of their cap table's already destroyed. Uh, outside investors already own too much. Um, there's a company we really wanted to invest in, um, but the outside investors already owned 80% of it when we, when we talked to them. And it was still a relatively young company. They had just done two early rounds that had just sold too much of the company. Um, and literally we were worried, a- and I think accurately so, that it was gonna be demotivating for the team, um, to have that structure.

  10. 26:28 – 33:10

    Most successful investments: Ron’s Google (1999) and Marc’s Airbnb growth round

    1. SA

      One more question before we open it up to the audience, um, for, for Ron and for Marc. Could you guys both tell the story of the most successful investment you ever made and how that came to happen?

    2. RC

      Other than Zenefits, of course.

    3. SA

      Other than Zenefits, right.

    4. RC

      Yeah, other than-

    5. PC

      [laughs]

    6. RC

      Other than Zenefits.

    7. MA

      That was gonna be ours. [laughs]

    8. RC

      Uh, uh, for me, clearly it was the investment in Google in, uh, 1999.

    9. PC

      [laughs]

    10. RC

      Uh, and we got Google return out of it. Um-

    11. PC

      [laughs]

    12. RC

      ... but, uh, uh, funny enough, I met Google through a Stanford professor, David Cheriton, who's in the School of Engineering. Uh, he's still here. Uh, he was actually an angel investor in Google and an investor in our fund. And kinda the quid pro quo we have with our investors in the fund is you have to tell us, uh, about any interesting company that you see. And we loved it that David Cheriton was an investor in our fund 'cause he had access to the, to the computer science department's deal flow. And we were at this party at Vivek Ranadive's house in full tuxedo. I hate tuxedos. And Da- have, anyone here know David Cheriton? 'Cause you know for sure he does not like tuxedos, and he was in a tuxedo. But I went up to him and we complained about our attire, and then I said, "Hey, what's happening in, at Stanford?" And he says, "Well, there's this project called BackRub, uh, and it's search, and it's search by page rank and relevancy." And back in, today, page rank and relevancy, everyone says, "Oh, you know, that's so obvious." In 1998, that was not obvious, that engineers were designing a product, uh, based on this thing called PageRank, wh- and all it was was a simple algorithm that said, "If a lot of people go to that website, um, and other websites direct them there, there must be something good happening on that website." That was the original algorithm. Um, a- and the, the motivation was relevance. So I said to David, "I have to meet these people." And he said, "You can't meet them till they're ready." Uh, which was the following May, funny enough. I waited, I called them every month for five months and, uh, finally got my audition with Larry and Sergey. And, um, right away, they were very strategic. They said, "We'll let you invest if you can get Sequoia. We don't know Sequoia, but they're investors in Yahoo, and because we're late to market, uh, we want an OEM deal with Yahoo." And, and I, so I earned my way, uh, into the investment in Google.

    13. SA

      What about you?

    14. MA

      So I'll tell one on the other side, which is, which is Airbnb, um, which we actually were not early investors in. We were, we, we did Airbnb as a growth round. Uh, we did the first big growth round in Airbnb, um, yeah, at about a billion dollar valuation in t- 2011.

    15. SA

      11.

    16. MA

      Um, and I think that will turn out to be, I believe that will turn out to be one of the spectacular growth investments of all time. We'll see, but I think it's gonna be. I think this is really gonna be one of the big companies. Um, so I'll tell that story because it's, it's not a story of pure genius. Um, it's a, um, we, we, we passed. We didn't even meet with them. I don't think we met with them the first time around, or maybe one of our junior people did. But it was one of these, it's, you know, I said earlier that venture capital is entirely a game of outliers, right? One of the key things with outliers is the ideas often seem completely nuts up front. Um, and so of course, the idea of a website where you can have other people stay in your houseUm, if you just, like, made a list of the ideas that are, like, most nuts, that would be, like, right there at the top. Um, and then, um, and then-

    17. SA

      I got a very nice email from you about that.

    18. MA

      Do you? Yeah. Good. Good.

    19. SA

      Very-

    20. MA

      'Cause hopefully I was very courteous in my stupidity.

    21. SA

      [laughs]

    22. SP

      [laughs]

    23. MA

      Um, well, the second most stupid idea you could possibly think of is an, is, is a website where you can stay at other people's houses. Um, and so the, Air, Airbnb uniquely combines, uh, both of those bad ideas. Um.

    24. SP

      [laughs]

    25. MA

      [laughs] So of course, it turns out they've unlocked an entirely new way to basically software as real estate. They've, they've unlocked this, just gigantic network effect. It's a gigantic global phenomenon. It's gonna be an enormously successful company. So part was just coming to grips with the fact that we had whiffed on our initial analysis of the idea, um, and that the numbers were clearly proving that we were wrong, and, and the customer behavior, uh, was clearly proving that we were wrong. Um, so one of our, one of our philosophies at our firm is we're multi-stage. The big reason for that is so we can fix our mistakes, um, and we can pay up to, uh, to get in later when we, when we screw up early on. The other thing I'll highlight, though, is, uh, the other reason why we pulled the trigger at a high valuation, um, when we did was because, um, of our, we had spent time at that point with the founders, um, with Brian and with Joe and with Nate. And there's, a friend of mine in private equity has this great line. Egon Durban has this great line. He says, um, when pe- as people progress through their careers, they get bigger and bigger jobs, and at some point they get the really big job. And it's, uh, some people, about half the people, um, grow into the big job, and about the other half of the people swell into it. Uh, right? And you can kinda tell the difference. Um, there's a point when people just lose their minds. Um, and one of the issues with these companies that are sort of super successful, hyper growth companies is, you know, you, you, you know, these... And this, Airbnb was sort of the classic case of these super young founders who hadn't run anything before. So, how are they gonna be at running s- you know, this sort of giant global operation? And we just were tremendously impressed, and are today every time we deal with all three of those guys, uh, how mature they are, how much they're progressing. Um, you know, it, it's like they get more and more mature, they get better and better judgment, and they get more and more humble, um, as they grow. Um, and so that made us feel really good that not just was this business gonna grow, but that these were guys who were gonna be able to build something a- a- and be able to run it, uh, in a really good way.

    26. RC

      Y- you know, people always ask me, uh, w- why do you think Airbnb is such a great company? It's funny we're obsessing over Airbnb. But, uh, and I say to people, "It's because all three founders are as good as the other founder." That is very rare. In the case of Google, two founders, one of them's a little better than the other one.

    27. MA

      [laughs]

    28. SP

      [laughs]

    29. RC

      But, but hey, he's the CEO. Every company has a CEO.

    30. MA

      I think, I think we just got the TechCrunch headline.

  11. 33:10 – 36:48

    Audience Q&A: raising money for exits, capital-intensive startups, and using debt

    1. SP

      So obviously, the conventional wisdom about why you raise money is because you need it. Um, but the more I get off the conventional wisdom, the more I'm starting to hear another story about why you raise money, and I'm actually hearing founders say it's more to facilitate the big exit.

    2. RC

      Mm.

    3. SP

      Or in the worst case, to facilitate the acqui-hire instead of just fizzling out into nothing. To what extent is that accurate thinking or flawed thinking?

    4. SA

      Does raising money help you, uh, with an exit or an acqui-hire?

    5. RC

      Well, if you, if you pick good investors who have good Rolodexes and domain expertise in what your company does, they're gonna add a lot more value than the money, and those are the types of investors you should be looking for.

    6. MA

      Um, yeah. So the answer to the question is clearly yes, but also, in a sense, it doesn't matter. Um, 'cause you can't plan these things according to the downside. Um, and so I mean, that's the scenario you are not, or obviously are not hoping for. Um, and so while the answer is yes, probably that shouldn't enter into the decision-making process too much. Uh, it might on the, it might enter into which investor to raise money from. It probably doesn't enter into the whether to raise money, uh, question that much, I don't think.

    7. SP

      Um, I didn't intend to start a business which is fairly capital intensive.

    8. SP

      [laughs]

    9. SP

      You still wanna end up with some equity. Do you guys have any advice about how to deal with the extra amount of demotivation and so on? Not everything's like you start some software, it's viral or whatever else.

    10. SA

      What should founders do, uh, for capital intense companies to still retain ownership?

    11. MA

      So this is, um, I would, I would double down on my previous comments on the, the onion theory of risk and, and the staging of risk and cash, which is the more capital intense the business, the more intense and serious you have to be about exactly what's gonna be required to make the business work and what the staging of milestones and risks are. Um, 'cause in that case, you wanna line up, you wanna be very precise of lining up b- uh, because the risk is so high that it'll all go sideways, right? So, like, you wanna be very precise what you're gonna accomplish with your A round and what's gonna be a successful execution of the A round. Because if you raise too much money in the A round, that'll seriously screw you up, right, later on down the road in the, you know, 'cause you're gonna raise the C, D, E rounds, you know, and then the cumulative, uh, dilution will get to be, will get to be too much. And so you, you have to be precise on every single round. You have to raise as close to the exact right amount of money as possible, and then you have to be as pure and clean and, and precise with the investors as you can possibly be about the, the risks and the milestones. But this, by the way, is a big thing. This, this is actually, I'm really glad you asked the question. It kinda goes back to what Parker said. Like, look, if, if you walk in, if you walk into our firm and you've got Twitter or you've got Pinterest or you've got something, and it's just viral growth and it's just on fire and it's just gonna go, like, those are the easy ones. Like, it's just like, let's put money in it and let's just feed the beast, and off it goes. Um, but if you walk in and you're like, "I got this really great idea, but it's gonna take $300 million staged out over the next five years, probably across five rounds," you know, it has a potentially very big outcome, but boy, like, this is, this is not Twitter. Like, this is gonna be serious heavy lifting, uh, to be able to get there. Um, we will still do those, but the operational excellence on the part of the team matters a lot more. Um, and one of the ways that you convey the operational excellence is in the quality of the plan.Um, and, and, and so back, and back to the Steve Martin thing, be so good they can't ignore you. The plan should be very precise.

    12. RC

      And there are way, if you're capital equipment intensive, there are ways of borrowing money-

    13. MA

      Yeah

    14. RC

      ... in addition to venture capital.

    15. MA

      Yeah.

    16. RC

      So.

    17. MA

      You, you can kick in, right, you can kick in a venture debt and then later on lease financing. But again, that, that underlines the need for operational excellence, because if you're gonna raise debt, then you really need to be precise on how you're running the company, because it's very easy to trip the covenants on a loan and it's very easy to lose the company. Um, and so it's, it's a, it's a thread-the-needle process that demands a h- just sort of a more advanced level of management than sort of, you know, the next Snapchat.

  12. 36:48 – 40:50

    Choosing investors is like marriage: red flags, trust, and long-term board dynamics

    1. SP

      What are some bad signs for investors that you shouldn't work with for your company?

    2. PC

      Yeah, this is a good question. How do you know when, what's a sign that you should avoid a particular investor?

    3. RC

      Well, i- it's the inverse of what I said about a good investor. I- i- if it's an investor who has no domain expertise i- in your company, does not have a Rolodex where they can help you with introductions, both for business development and in helping you do the intros for Series A, you should not take that person's money, especially if they're in it just to make money. Uh, and you can suss those people out, you know, pretty quickly.

    4. MA

      Yeah, I would, that, that, m- I'm glad you asked that question. I bring up sort of a broader point, which is, um, if e- if, if your company is successful, you know, we're talking about a, you know, I think generally s- at least the companies we wanna invest in are the ones that wanna build big, independent franchise companies, so we're talking about a 10 or 15 or 20 year journey. Um, you know, 10, 15, 20 years, you may notice, is longer than the average American marriage. Um. [laughs]

    5. SP

      [laughs]

    6. MA

      This is significant. Uh, the choice of key investors, in particular investors who are gonna be on the board, uh, for a company, I think is just as important as who you get married to, which is extremely important. Um, these are people you're gonna be living with and partnering with and relying on, um, and dealing with in position, uh, you know, in, in, in conditions of great stress and anxiety, uh, for a long period of time. And I, the, the big argument I always make is, um, uh, and I, I make this, make this all the time, sometimes people believe it, sometimes they don't. Which is, like, if everything just goes great, it kinda doesn't matter who your investors are. Um, but almost never does everything just go great, right? Even the big, successful companies, even the big, you know, Facebook and all these big companies that are now considered very successful, you know, along the way, all kinds of shit went s- you know, shit hit the fan over and over and over and over again. Um, and there are any number of stressful board meetings and discussions and late night meetings with the future of the company at stake, where everybody really has to be on the same team and have the same goals and be pulling in the same direction and have a shared understanding, and have the right kind of ethics, um, and the right kind of staying power, um, you know, to be able to actually weather the storms that come up. Um, and one of the things that you'll find that is a big difference between first time founders versus second time founders is almost always the second time founders take that point much more seriously, um, after they've been through it once. Um, and so it really, really, really matters. I, I always thought, and I believe that it does, it really matters w- who your partner is. It really is like getting married, and it is worth putting the same amount of time, maybe not quite as much time and effort into picking your spouse, but, um, it is worth spending significant time really understanding who you're about to be partnered with. Um-

    7. RC

      Yeah, I-

    8. MA

      ... because that's way more important than, you know, did I get another $5 million in the valuation, or did, you know, did I get another $2 million in the check.

    9. RC

      The marriage analogy is great. I know at SV Angel, uh, our attitude is when we invest in an entrepreneur, we are investing for life. Because we want to invest in, if we made the right decision, we're gonna invest in every company they start. And once an entrepreneur, always an entrepreneur. So w- we, we actually do consider it a marriage. We're, we're investing for life.

    10. PC

      One, one thing that I, that, uh, which is another way of saying what Mark just said, is I always look for, um, in that first meeting, um, do you feel like you respect this person, and, and do you feel like you have a lot to learn from them? 'Cause sometimes you, you meet with, with VCs, and in the initial meeting you kinda feel like, man, they're just, like, slow on the uptake, or they don't get it, or they don't see it. And sometimes you walk in and they have this, like, just such an incredible amount of insight into your business that you walk out of there being like, man, I don't, even if these guys didn't invest, that sort of hour that I spent with them was such a great use of my time. I felt like I came out with a much clearer picture of what I need to do and where I need to go. Um, and that's such a great microcosm of what the next couple years are gonna be like. Um, you know, like, don't, i- if, if you feel like you would want this person to be really involved in the company, even if they didn't have, like, a checkbook that they, that they brought with them, that's probably a really good sign. And, and if not, that's probably a, a really, a really bad sign.

    11. SP

      [clapping]

  13. 40:50 – 45:18

    VC constraints and opportunity cost: conflicts, bandwidth, and why firms pass

    1. SP

      What's the constraint on the deal-making activities of angels and VCs? The time, money, or the lack of company?

    2. PC

      What, what's the constraint on how many companies you guys can invest in?

    3. RC

      Uh, SV Angel's kinda gotten comfortable with o- one a week. Uh, you certainly can't do more than that, and that's a staff of 13. Um, so it's, it's really the number of companies.

    4. MA

      Ron, if you had, if, if you all worked twice the number of hours, would you invest in twice the number of companies?

    5. RC

      Uh, I, I would advise against that. I would rather just add value, more value to the existing companies.

    6. MA

      Maybe you could, uh, I'll take the role of questioner for a second. Um, maybe you could, uh, could you talk a little bit about conflict policy?

    7. RC

      Uh-

    8. MA

      Or not, or not conflict policy.

    9. RC

      Well, SV Angel actually does have a written conflict policy. Um, but most, when we ha- end up with a conflict, it's usually because one company has morphed into another space. We don't normally i- i- invest in, in companies that have a direct conflict. If we do, we will disclose it to the other company, to both companies. And keep in mind, at our stage, we don't know the company's product strategy anyway. We probably don't know enough to disclose. But our conflict policy also talks about this really important word, which is trust. I- in other words, we're off to a bad start if we don't trust each other. And an- and with SV Angel, the relationship between the founder and us is based on trust.And if somebody doesn't trust us, then they shouldn't, they shouldn't work with us.

    10. SA

      Mark, will you invest in companies?

    11. MA

      Uh, yeah, so this is actually... So let me go back to the original question, then I'll, I'll come back to that. So the original question is, this is the thing we talk about most often in our firm. So this is kind of the, the, the question is at the heart of, I think, how all venture capital operates, um, wh- which is the question of constraints. So the big constraint on a top-tier venture capital firm, the big constraint is the concept of opportunity cost. Um, so it's the concept that basically everything you do means that there are a whole bunch of other things that you can't do. Um, and so it's not so much the cost... A- and, and we think about this all the time. It's not so much the cost of we invest $5 million in a company and the company goes wrong and we lose the money. That's not really the loss that we're worried about, because the theory is we'll have the winners that'll make up for that, in, in theory. Um, the cost that we're worried about is every investment we make has, has two implications for how we run the firm. Um, every investment we make, uh, number one, rules out conflicts. Uh, and so our policy for sure on venture and growth rounds, um, is that we don't invest in conflicting companies, and so we can only invest in one company in a category. And so if we invest in MySpace, and then Facebook comes along a year later, like we're out. We can't do it, right? Um, and so w- we basically lock... Every investment we make locks, locks us out of a category, right? And, and the nature, that's a very complicated topic when you're discussing these things internally in these firms because you only know the companies that already exist, right? You, you don't know the companies that haven't even been founded yet, right? And God help you, had you invested in, you know, an early company that was not gonna be the winner, and you were locked out by the time, you know, the, the, the winner emerged three years later and you just couldn't make the investment. So that's one issue is conflict policy. Um, the other issue is opportunity cost on the time and bandwidth of the general partners. Um, and so going back to the concept of adding value, um, you know, we're a firm, typical, typical firm. We're a fairly typical firm of eight general partners. Um, each general partner can maybe be on 10, 10 to 12 boards in total if they're completely fully loaded. Um, so it's basically, Warren Buffett talks a lot about investing as you basically wanna think of it as a ticket that you have a limited number of holes that you can punch, and every time you make an investment, you punch the hole. Um, and when you're out of, when you're out of holes to punch, like you're done. You can't make any new investments. Um, and that's very much how venture capital operates. And so, um, the way to think about it is every open board slot that one of our GPs has at any given point in time is an asset of the firm that can be deployed against an opportunity. But every time we make an investment, it takes the number of, of slots that we can punch down by one. So it reduces the ability for the firm to do new deals. Um, and so every investment we make forecloses not just the competitive set, but other deals where we will simply run out of time. Um, and so, a- and this is sort of a big thing of like, well, it just goes back to what I said earlier, like this company's pretty good. It seems fairly obvious that it's gonna raise venture funding. Why didn't you fund it? Well, on its own, if we had unlimited capacity, we probably would have. Like, it'll probably make money. But relative to getting blocked out of the competitive set and relative to not having that open board seat for, for an even better, uh, opportunity, um, we pass on that basis a lot.

  14. 45:18 – 50:08

    Pre-product investing and ideal board structure: what really matters

    1. SA

      Um, it's pretty widely agreed that, that, um, it's easier than ever to build an MVP to launch, to get traction. Um, at the same time, we know that there are C deals that happen pre-MVP or even pre-launch and pre-traction. So in those instances where you do do a C round company that either doesn't have a product yet or doesn't have it launched, gotten impressive traction, what do those deals look like, and what do you make that judgment based on?

    2. SA

      What convinces you to invest with no product and traction?

    3. RC

      Uh, what would convince us, which is what usually convinces us, is the founder and their team themselves. So we invest in people first, n- not necessarily the product idea. The product ideas tend to morph a lot. So w- we will invest in, in the team first. If it's, if it's pre-users, the valuation's gonna tend to be corresponding lower unless one of the founders, uh, you know, has a, a success track record.

    4. MA

      Yeah, for us, it's almost always, if there's nothing at the time of investment, then it's almost, other than a plan, um, it's almost always a founder who we've worked with before or a founder who's very well known. Um, by the way, the other thing worth highlighting is you kinda, in these conversations, in all these conversations, you kinda, the default assumption is that we're all starting consumer web companies or consumer mobile companies. Um, there are, you know, other categories of companies, capital intensive is one that's been brought up. But, uh, I'll just say, like, for example, enterprise software companies or enterprise these days, SaaS, you know, application companies or cloud companies, it's much more common that there's no MVP, right? It's much more common that they're a cold start. Um, and it's much more common that they build a product in the A round. And there's no point to having an MVP 'cause the customer's not gonna buy an MVP. The customer actually needs the full product when they first start using it. Um, and so the company actually needs to raise $5 or $10 million to get the first product built. Um, but in almost all those cases, that's gonna be a found- a founder who's done it before.

    5. SA

      I think we have time for one more question. Yeah.

    6. SP

      Can you talk about the ideal board structure and like investor perspective and founder perspective on that?

    7. SA

      Could you guys talk about the ideal board structure? You first.

    8. PC

      Um, gosh, um, uh, I think, um, so, so in, in our board, um, we're fortunate that we have, um, there's myself and my co-founder and, um, a, a, a partner from Andreessen Horowitz, um, which, um, I think probably re- removes the fear, probably creates a, a little more trust 'cause it sort of removes the fear that like, you know, uh, someone's gonna come in and just like fire you arbitrarily because like it's time for a big company CEO kinda thing. But i- in most cases, I think if you, if you trust, if you trust the people that you're working with, um, it, it shouldn't really be an issue, um, 'cause there are so, there are so few-- I mean, things almost never come to like a board vote, and by the time that they do, it's like something's deeply broken at that point anyway. Um, and, and most of, and most of the, the, the power that VCs have comes outside of the board structure. It's protective covenants that are built into the financing round. So it's like you can't, you know, take on debt. You can't sell the company. You can't-- There are certain things that you can't do without them agreeing to it anyway. Um, so it's probably like a less of a big deal than, than people make it out to be. What, what I found sort of is, is that, uh, it seems to me that as a founder, if things are going well at the company, you have sort of unlimited power vis-a-vis your investors, like almost unlimited, like no matter what the board structure is and no matter what the covenants are in the round, like if you say, "Listen, I wanna do this, and I think this is what we need to do," a- and even if it's like a good investor or bad investor, even the bad investors will be like, you know, like, "Let's, let's, let's make it happen," because they wanna like ride this rocket ship with you.

    9. MA

      Yep.

    10. PC

      And when things are going badly, it does not matter what protections you've built into the system for yourself. Like, you know, at the end of the day, like you need to go back to the trough to get more money, and, um, you know, if, if, if like things aren't going well, like they're gonna have all, all of the cards in their hand.

    11. MA

      And they're gonna get to renegotiate all the terms.

    12. PC

      And exactly, they'll change all the terms.

    13. MA

      This is what happens actually when a company gets in dire straits. Uh, the, uh, the, it actually doesn't matter what the terms of the prior rounds are. They all get renegotiated.

    14. SA

      Uh, uh, this is, I think, the fundamental rule of raising money, uh, other than to never have a down round, is that if things are going well, the founder's in control and it's company gains more money, and if things are going badly, the investors are in control.

    15. MA

      I've been on boards for 20 years, public and private. I have never been in a board vote that mattered. It's always been-

    16. PC

      Never. Never a vote. Um, many discussions, many controversies, many issues, uh, never a vote. Um, it's, the decision has always been clear by the end, um, and it's either been unanimous or very close to unanimous. Um, and so I think it is almost all around the intangibles and almost not at all around the details.

    17. SA

      Okay, thank you guys very much for coming today.

    18. RC

      My pleasure. [audience applauding]

    19. SA

      Uh, okay.

Episode duration: 50:10

Install uListen for AI-powered chat & search across the full episode — Get Full Transcript

Transcript of episode uFX95HahaUs

Get more out of YouTube videos.

High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.

iOSAndroidClaudeChrome