Very True by Verissimo

Alex Oppenheimer (00:18.99)
Early stage venture investing is all about option betting. Whether you're investing as an angel, a fund, or a syndicate, returns are generally driven by a small number of very large successes. The conventional wisdom is that in a fund of 20 companies, one should be able to return the whole fund or more with a few others that make a modest return. And then the rest of the companies are just going to go to zero. And that's fine. That's usually how people model this if they model it at all.

Of course, going into any investment, the assumption needs to be that any or all of them could be that one big winner or that they really all could be. But you've also got to understand the statistics and know that in the range of outcomes, unlucky would mean that in that fund you have zero big winners and lucky means that you get instead of just one big winner, three to five. The ones in the middle tend to drive some return, but they're not going to be

the real game changers for your fund and for your business. Interestingly, going back to my time at NEA, I remember when the junior guys joined, there's obviously a huge 400 company portfolio when you join and you work on new investments, but you also work on a lot of existing investments. And the ones that you spend a lot of time on usually as a junior person are the ones that are a little bit challenged, let's say. And you go in and you see, they're fighting the good fight.

And the founders are great and the board meetings are not easy. And frankly, that's where you learn a tremendous amount about the business and business in general and how to be a great board member and decision-making and advice and all of that. but you got to remember that when that initial investment was made, that wasn't the assumption that that was going to be what happened, that they really all were meant to be these big high flyers. And sometimes things don't work out that way.

So there's different dynamics for angels, know, kind of SPV syndicates and funds. That's a whole different subject, but there's one assumption across everyone who's doing early stage investing, which is that you're making an option bet. It's got massive upside and it has finite downside. If you put a hundred thousand dollars into a seed stage company, you could make 10 million or more. And then you could just lose that a hundred thousand dollars or.

Alex Oppenheimer (02:36.526)
something in between, right? If you look at, you know, the ramp seed, if you put $100,000 into the ramp seed, I think it's like a 400X or a 600X or something, you make a lot more than 10 million. And, you know, for all those other ones, you know, you lose. And so, you know, four or 500, that's the math, right? Is like, could you get a 100X? Could you get a 50X? And like, how many deals do you have to do to get that? That's what everyone's thinking.

So when you're backing disruptive, innovative companies that can grow extremely quickly, like this is the business, this is the math. It's complicated, it's nuanced, it's a moving target, everything's changing, but that's the underlying assumption in venture. And I think that also does get lost sometimes. So interestingly enough, I should have given the background at the beginning, but I'm going through a post that I wrote here in December of 2022. So if we zoom back to that era, that was kind of post the 2021.

mayhem, the FOMO, the chasing, the crazy valuations, everyone doing something, tons of people starting companies, most of them probably shouldn't have. This was kind of in the moment of that come down and tons of money have floated into the industry. And it's interesting, fast forwarding almost three years, we had like a quiet 2023 and then already in like the second half of 2024 and definitely into all of 2025, like

We're back to like this hype. Now you could argue that the hype that we saw in 2021 looked more like what we saw in 1999 and 2000 than, what we saw maybe in 2016, which people don't even remember of us being hike hyped because a lot of those companies, those SAS names, they actually grew into their valuations. And we have enough massive successes that have, you know, you think about like a Shopify relative, you know, a company went public at like a $3 billion valuation, right? Like massive successes.

make us realize that like the bubbles weren't really bubbles. It's hard to call when things are just, you know, the concept I've talked about before is you can either overpay or you can just pay ahead. And at the time those look like the same thing. So you could argue now, like the numbers are good. Companies are really growing. Um, they, they back up, you know, and the multiples aren't as crazy as they were in 2021, but at the same time, the way these companies are growing again, which is a whole different subject is very different from

Alex Oppenheimer (04:57.806)
how they did, let's say, in 2016 with real annual contract, high NRR SaaS companies. going back to the math of early stage venture of this option betting scheme, which is really what it is, it's all about this asymmetric upside, meaning you've got this amount that you can lose. There's some chance that that happens. And then you've got this amount that you can gain. I was just listening to, you know,

Dan Sondheim on a podcast, one of the greatest public investors at scale in our generation. And he said, you you've got it something, you're trying to judge it and say, all right, you're doing on one side of the equation, you're figuring out what's the downside. What are the chances of the downside? How much is the downside? And then on the other side, you're figuring out what's the upside, how much is the upside and what are the chances of that upside? And he pointed out, which I love that those are very, actually very different skills. And it's hard to do that all in your head.

Bifurcating those functions I don't think often works for really high performance investing, but maybe there's some examples out there. So the two things that I point to as like the reason that this oversimplification of this, know, option-bending scheme that is early stage venture, right? The first is that, you know, these startups are run by people and those people are putting their career at stake. Some people are really successful already. Some are not. They're still earlier in their careers.

You don't really know. There's a huge array across the spectrum. Sometimes it's a kid who has a job offer from Facebook and he's going to swing for the fences and if it doesn't work out, I'll just go make $400,000 a year at Facebook. When I say kid, mean like a 21 year old or whatever. Sometimes it's a 40 year old finally for the first time starting a company and living their dream. And sometimes it's a 50 year old who has already had two exits and has $350 million in the bank. Huge array.

A lot of times there's big misalignment here and I've doubled down on this and I actually have a note in this, you know, original writing. said that founder secondaries are not the answer, but the truth is they actually might be the answer to keep maintain alignment between the investors who need really high value exits. It's less actually about the multiple that I mentioned here, but more about just the total volume of the exit.

Alex Oppenheimer (07:18.326)
And when that's the case, secondary has become a real play to maintain that alignment again. And just to clarify what I mean by that, if you've got a founder who's, you know, driving a cheap car and renting an apartment and flying coach and whatever, and they've got a company that's valued at a billion dollars, and now they're raising more money, their investors are underwriting that to five billion or at least two billion, maybe 10 billion. And if you think about who those investors are, and really again, it's just humans, where are they coming from? Who are they?

There people who are managing multi-billion dollar funds. They've probably done a lot to earn that, to be able to do that. And their fees are on a whole different scale. And the upside that they're looking for is a whole different mathematical equation. And so if you think about what a, you know, a one and a half X would be, or a one X would be for the founder in that case, versus what it would mean for that, multi-billion dollar fund and the GPs who make the decisions there, it's, just becomes very misaligned. Whereas if the founder.

way to solve that is you're not going to make those GPs happier with poor returns. But if you make the founder a wealthy individual and get them more set up to swing for the fences, then it really, it really can work quite well. So the other point, which is really kind of the main gist of what I'm talking about here is that the option betting assumptions that you put a hundred thousand or a million dollars or whatever in, that's all you can lose. But again, this is a people business. And so

If you lose in the wrong way, the after effects of that collateral damage can be a lot more than the invested capital. You know, I think that the first thing that comes to mind is, you know, the people who've committed fraud have gone to jail. the messes around them. Some of them have wreaked havoc, on the people involved, often the founders, sometimes more so than other times and sometimes not, you know, interestingly enough, and the one kind of shining example.

is probably Sequoia's investment in FTX where they published a letter, which obviously got leaked that said, we did our diligence. We didn't expect this to happen. Sorry, we lost $200 million. Now, again, this is where the fund math matters. The fund that that was in probably still performed and made everyone a lot of money. And so if you have one bad mistake like that, and again, it's a bad mistake, but you still make a lot of money across everything else you're doing, you're forgiven.

Alex Oppenheimer (09:45.582)
If you are a small fund like mine and many others, smaller than Sequoia, which is almost anyone at this point, and you have one shining star investment that you're riding and then that ends up being a fraud, I think you're in a lot bigger trouble than the guys and girls over at Sequoia who've been doing their thing so well for so long.

So, you know, I'd like to think that in my experience, my angel investing in my, you know, professional fund investing, both at NEA and elsewhere and, and, and in Verisimo, when we have had zeros, like the language that I use here, which is the most is the thing is that these, are painful processes. And each time I can pretty much say that they're handled with class, honesty, transparency, effort, and alignment. And I think that's the most important thing I kind of

sort of mention it here. Sometimes when founders fail, VCs get really nasty. Sometimes they just get despondent and unresponsive and like, okay, fine. But if you have to sign stuff, just don't be a jerk, sign it. Don't be a nitpicker. Like this is part of the model that you built that you were gonna give some zeros and we obviously didn't want zeros, but it's part of the business. And sometimes, you know.

They're just jerks and they're like critical of founders. I told you, should have done this and why didn't you do that? It's like, it's not going to work out so well. one of the things that, like, that Harry, my, my, my, mentor and boss at NEA was a wonderful person and a wonderful investor and very successful would say is whenever he was kind of like competing for a deal and founders asked for references, he would say, you know, go talk to my founders that have been failures or, or struggling somewhere in that zone.

Talk to them about what I've done for them because we're going to go into this eyes wide open. Yes, we think this will be successful and we want this to be successful and we're all on the same team and on the same page, but let's be adults and realize that like there's a decent chance this fails and how you act in the trenches matters a lot when things are nasty because also by the way, a lot of successes as most people know, they're not as glossy as you know, tech crunch might make them seem.

Alex Oppenheimer (12:06.904)
They had a lot of ups and downs along the way. had to go through team members. had, you know, rough quarters, even rough years where they missed their numbers or lost money or almost ran out of money and everyone to cut salaries and switch to equity. I mean, there's so many things along the way of these, these storied companies, which truthfully often get lost in the mix. lot of really successful founders in a very healthy, psychological way for themselves have a way of, I don't want to say whitewashing, but

you know, doing the appropriate editing tools, which is what a psychologist would say in their own mind to reframe some of these really difficult experiences, which, again is a, is a strength and an ability and it's important and it's good. but when you're actually not that person and you're a little bit on the sidelines and frankly, again, it's a more okay when it fails, you see a lot of the pain. and then again, when some of those painful scenarios turn into successes,

Again, it gets, it's, it's all in the name of success. So it's okay. Well, sometimes those were pretty nasty, difficult scenarios. So, I'm going to jump in now though, to my, what I call my four different ways of being wrong. And then I'm going to actually add a few more because I think they're really important. So the first example I have is what I call the right ways to be wrong, which again, it's built into the model. It's, it's what we count as a, bet on a team that's going after an emerging market. And then due to unforeseen circumstances,

that market or frankly that team has some major shift that's like nobody's fault. It's just like a complete like against their will. No one could have seen this coming. Whatever if it's a black swan event. I mean it could be anything from like you know, unfortunately like the death of a of a key executive to just like you know a major player like Microsoft doing something that nobody thought they would do because it made no sense for them to do or sometimes it's not as extreme and like

Again, the market just shifts. I've got a few companies like this, but either way, sometimes like the team can kind of recover and pivot and move through it. And sometimes they can't, but either way I call this, this is a good mistake. And in that sense, it's not really a mistake at all because you did all the right things and it didn't work out. But as I point out here, sometimes these are the most painful because you're really excited about these. Everything seems right. They got tons of potential and it just.

Alex Oppenheimer (14:28.492)
It doesn't play out and it hurts to see and it hurts to be part of, because you just had such high hopes, but that's okay. And the truth is though, these sort of companies and these sort of founding teams and markets, they're rarely actually zeros. I think what you'll find often is because of how compelling these founders are and the markets are and how kind of locked tight it is, it just didn't grow at 30 % a year like we were hoping to, it only grew at 3 % a year. They end up getting acquired in really nice exits.

And, they become tuck in, you know, they become tuck in acquisitions inside a private equity platform or whatever it may be. And so you actually often do end up making money if you're early and most people end up making, getting their money back. And the founders usually do better than even just landing on their own two feet. So that's, that's one. Number two is what I call an okay way to be wrong, which is that you bet on a team and you, you, you think they're great. And the market they're in is great, but

After maybe a year or two, you realize that maybe that team, you were maybe a little bit too optimistic about their abilities, if they really had what it took to scale, and really if that market could come to fruition or not, and it just kind of doesn't. And you got to look and be honest with yourself for the positive and the negative in these scenarios that it really could have. So much of this business is luck, is random.

Again, it is a people business. People change, people don't change. Sometimes, sometimes I'm changing as the issue, sometimes I'm not changing as the issue. And you don't really know what you're going to get, but you know, oftentimes there's just, there was a little bit too much competition and you kind of let that slide in your, in your diligence maybe because they had so much potential on this one front. or, or maybe like they weren't, they had to really execute perfectly. And maybe that was an unrealistic expectation, or maybe the challenges were like,

Yeah, there's only like a 2 % chance that there's like this platform risk with this big player and then it hits and you're like, maybe there was more than a 2 % chance. Maybe there's more like a 30 % chance that that happens. And like, again, those are okay. Oftentimes they are kind of, I'll use the word salvaged, salvageable. Maybe they get acquired as a stock deal. Maybe they're money back situations. Maybe it's early enough that it's just an acquihire. But maybe it's just like a painful road down. Those are the ones where it's often hard to like.

Alex Oppenheimer (16:50.038)
sit a founder down and be like, look, we all thought this was going to play out in way X and it's playing out in way Y. Maybe we should just like realize it's not going to happen and fold it up. Now, again, as an investor trying to be rational, maybe that's not that hard. As a founder, you actually would hope that they're like, no, screw you. We're going for it. didn't get in this thing to give up. But at a certain point, it's like sometimes the writing's just on the wall and it behooves everyone to just...

You know, Hey, I'll back your next company. You know, maybe it was the wrong team dynamic. Maybe it was the wrong market. Maybe it was just not the right time or the right underlying tech to go after. I'll just, I'll back your next company. And I heard a great thing recently that like, I read it. I don't remember who said it as a partner at some VC fund that he said, one of the frameworks he uses is, you know, if this company fails, will I back this founder again? Which obviously you don't know until you get there. Cause you learn a lot of things about people on these challenging roads, but

I think it's a great, uh, you know, remove the person from the strategy and the product and the rest of the team and say, like, would I back the CEO again, doing something totally different? And I think that I use that a lot and I've done that a handful of times and it matters. So now the third way though, is what I call the not great way to be wrong, which is that frankly, when you're a diligence in the company, you just miss something. Sometimes it's competition, sometimes it's product, sometimes it's underlying tech.

Sometimes it's a deficiency in the team. Oftentimes you figure it out pretty quickly or plays out pretty quickly, even though you kind of don't admit it to yourself. And you usually want to mulligan on that one. And that happens. I, I haven't figured out a way to avoid it. Maybe some people have. I've maybe, maybe, you know, maybe some people really have figured out a way to avoid those, but.

I think that there are ones you go in and you're always, there's nothing perfect about these companies at the early stage. I'm talking like pre-seed seed, know, maybe there's a product, maybe there's customers, big maybes. Maybe the team's fully formed, maybe it's not. And so you always, you're always have to look past things. And that's part of what you're doing is you're trying to look past deficiencies in a story, in a company, in founders.

Alex Oppenheimer (19:10.39)
into what the opportunity can be. It's, you know, it's what we call in the Jewish world, ayantova, which means having a good eye and really looking for the good. actually means the exact same thing as it does in baseball, which is you're, looking, you have a good eye, which means you let a ball go, which means you're really, you're good at looking for the strikes. And that's what you're focused on. And you've got to let things go. Right. It's easy to poke holes in a, company with no customers and barely any, or no product. That's easy. Anyone can do that. it's can, can you see that opportunity? And you know, sometimes,

Again, this is kind of what your job is as an investor is to be a fiduciary and to try to de-risk these things and not make these mistakes. But inevitably they still happen. And I have here, it's like your LPs might want you to explain a little bit, but they're probably not going to come after you with torches and pitchforks. But now we get into the fourth way to be wrong, which is what I call the catastrophic way to be wrong, which is, you know, where things get ugly. And, you know, oftentimes it's

Just again, it goes back to the people thing. Sometimes they're committing fraud. Sometimes they're just nasty, nasty people. And when you get backed into a corner, they, they lash out and they, you know, speak badly about people and they either indirectly or, or directly, you know, cause damage to your reputation as just an investor, as someone who touched it, who's involved in it. sometimes these are very, very public things. Sometimes these things hopefully stay private, but not always. And, know, as I say here, sometimes, you know,

your LPs will come after you with torches and pitchforks. and going back to my example earlier with like the Sequoia FTX thing, the fact that they wrote a letter is about as bad as it gets for them, you know? And that says something, you know, they're in rarefied air, tons of respect for that. And they've earned the ability to just have that be their biggest issue. But you know, for everyone else down the totem pole of early stage investors,

It may be really damaging for them. Now, sometimes yes, sometimes no. Sometimes founders end up being total megalomaniacs and wackos and fraudsters. And sometimes it's like, well, they just stepped one bit too far, but we really do want the, know, megalomaniac founder, because those are the people that start $50 billion companies. Maybe yes, maybe no. So, you know, I'll add in a couple other ways of being wrong, which I think are,

Alex Oppenheimer (21:37.102)
painful, which I've developed in the last three years that I've seen. you know, one way is that you invest in a company early and then other people invest in the company and the company grows and you go out and you market the heck out of that winner. And, you call it a winner. Obviously that's what people call it. That's the, that's the, that's how people talk in this industry. And then it ends up just crashing and burning. Now either it crashes and burns.

catastrophically. Sometimes again, the market just changes. Sometimes you get your money back. Sometimes zero. In either case, you're kind of coming back to your investors and your network with your tail between your legs. And they're going, well, whatever happened to that company that you used to talk about all the time? yeah, this is what happened. Those are tough. Again, maybe it's probably not the worst way to be wrong. It happens. I think that the takeaway there is sometimes you look at a company. Well, I'll get into it.

more of what I should have probably started with this, why this is actually useful exercise to think about. So the other way to be wrong, that's painful, is obviously by omission. You know, the anti-portfolio. For me, this is like so, so painful. I'm not even gonna list all the names. There's so many that I've had the opportunity, have been asked to, whatever, invest in. It's easy to focus on those, you know, like the Michael Jordan syndrome, I call it, where, know, you always, I focus on the shots that I...

miss, not the ones that I made. think that's, you know, gets to the philosophical question of do you learn more from your successes or from your failures? You got to look at the successes critically, you got to look at the failures nicely. That's probably the best method and not be too critical of yourself. Again, especially in a business where being wrong is part of it. You know, if you don't take any risk, if you're kind of right on everything, then you're never really going to be really, really right, which is obviously what we care about in this business the most. So

you know, those misses the missing by omission. There's two kinds, right? The example I give is like, you know, I'm sitting here in Israel. I invest in my network in the US and in Israel and a tiny bit in Europe, but you know, someone's like, did you see that? You know, grocery delivery startup in Indonesia? Like, no. Yeah. I mean, someone sent it to me, but like, I, it's just, I have no connection to that. Why would I, you know, why would I do that? No, I don't have any coverage, let's say.

Alex Oppenheimer (24:03.244)
responsibilities now. Again, if you're a multi-billion dollar, multi-stage platform, then you have coverage everywhere for everything. Yes. But like, you got to know who you are and what your network is and what your coverage is expected to be and what your investors, you know, expect of you. So those are not such a big deal. I actually saw one of those big Indonesian things early and I'm like, I'm a mostly like enterprise software investor sitting in Israel. Like, no. And so part of it, one of the frameworks actually I use for investing is, am I going to look

like a jerk for not doing this deal? Or am I going to look like a jerk for doing this deal? Now, obviously, what that means is if you do the deal and it is successful, nobody asks questions. If you do the deal and it fails, are people going to be like, well, why the heck did you do that deal? You're out of your own way. Like it doesn't make any sense. Now, sometimes people say, I don't care. I had a feeling I went for it. Great. But you also have it again, somewhat of an issue if if you're a

Israel US focused enterprise software fund and you do a African farming deal and that is the only deal in your fund that returns money and you end up three X in your whole funders on that deal. Again, no one's going to complain about that fund, but you're going to have some explaining to do when you go out and fundraise for your next fund because you're enterprise software, Israel US, and instead you got this African farming deal that is the only thing that you've ever made money on. So anyway, these are kind of weird problems, good problems, who knows.

Um, but there are certain deals which get really tough where when someone's really connected to you, like if you're, if your childhood best friend or your college roommate, uh, starts a company and you didn't know it happened or you said no, or it's like, those are the ones where you could argue where you could be wrong, right? Like my, he wasn't my roommate, but we lived across all from each other. We roommates after we graduated and I didn't invest in either of his two companies.

that he started and wow, huge mistakes. And, you know, I didn't know this at the time because I was 22, 23, and I didn't really understand what it meant to be an investor in this business. But, you know, I didn't understand like the, hey, I didn't, I didn't, I didn't take full consideration of the fact that if someone was one of the smartest people I knew at Stanford, that's probably in an indication that they're one of the smartest people in the world. And if they're doing

Alex Oppenheimer (26:28.622)
stuff like enterprise software or early days fintech, and they worked at some of the best companies in the world before that, that's kind of enough to take a flyer without even knowing what they're doing. So that's, you know, that's again, the other way of being wrong was by omission. Again, there's some good ways and there's some bad ways. The other way of being wrong that I'll touch on is the financing mistakes where it's the right company and it's the right outcome.

at the end of the day, but these are long journeys and somewhere along the way, either in the initial financing that you did or in some interim financing, it got lost. on the, on the initial financing, can mean like you invested in a company at a $250 million valuation. And yes, it became a $500 million company, which is wonderful, but they raised a bunch of money and you end up getting like a 1.2 X on that. And if you think about the risk reward there,

Yes, you didn't lose money, but that was probably not a good trade, all things considered. And that's like, again, not a terrible situation. Some other ones, again, you, you could invest really early at a $5 million valuation or $10 million valuation, and you could own your chunk. then like companies do, they have ups and downs along the way. It gets recapped by some nasty, you know, weird PE growth equity player that you've never heard of. And you decide not to play because.

That's not what you got in this for. You want, you know, a tier one fund doing your follow-ons and that's where all the returns are and you get wiped out. then sure enough, five years later, the company gets acquired. Yes, the private equity fund makes a killing. Founders still makes a lot of money, but you got washed out and you, cause you didn't participate because you know, maybe you were focused on the wrong things. Maybe you didn't dig deep enough into it. and that's a tough way to be wrong. another way is, is just,

again, not a full incorrectness, but let's say, you you don't have the guts, you write too small of a check, or you don't take your full follow on money or whatever it may be. These are hard decisions to make, right? The allocation decisions because, you you want to have ownership and that matters. And if you can't get the right ownership, do you just walk away or do you go know what, you know what, even though I'm investing a quarter of what I want to be investing, I think this is worth four times more. Now, again, in the moment, it's all emotion.

Alex Oppenheimer (28:54.7)
Right? Like there's no way to really underwrite these things from the really early stages. So you're going on gut, you're going on experience. Sometimes you got to pull the trigger. You know, I was tweeting with a friend the other day who said, yeah, ownership matters, da da da. And truthfully, this is what LPs push. And they push this because the data shows that the funds that make a dent for them have really consistent and high ownership in the companies that matter, which is just simple math. It makes sense. But if think about your motivations as a GP, your motivation is to stay in business. And so

If you normally write 500k checks or $1 million checks and you get a 150k allocation in Elon's new company, are you doing it? Like, yeah, just do it, right? Like you just do it. And if you lose, you lose fine. But you have to understand like what I call is upside protection and how much upside is there really? Because, and it's hard to be able to say it's more like, this could be a hundred X, this could be a thousand X, this could be a $10 billion company, this could be a $20 billion.

Like no one really talks like that. I actually know a certain investor who I have a ton of respect for who's been in several billion to $50 billion exit several enough that he could sit here and claim that he has the pattern recognition to know what it takes to build that. And he doesn't, he doesn't say that. He says, I look for 10 X's like that's it. What's a clear path to a 10 X. I don't say, Oh, this could be a $50 billion. So where do you flex on your rules? It's hard to say.

But being like, well, I could have put a small check into that and yeah, now that's cursor. Well, probably should have, you know? And so that's a tough one. Those are tough to be wrong on. Sometimes it's a deal that's down the middle though, where it's not overvalued and the allocation isn't tight. You just don't have the conviction and you write a tiny check and then it gets interesting and you can't put more money in and that's fine. But you know, sometimes you can. So there's just so, so many variables. It's hard to simplify it enough.

but, I will, I'll bring it back though, to, a line that I heard back in 2012, which has stuck with me since. And, he probably doesn't remember telling it to me, but I'll quote him anyway. It was an interesting scenario where I was in investment banking at Morgan Stanley and my dad was looking at joining a new company as their CFO. And it was in a space that was the company was older.

Alex Oppenheimer (31:24.054)
It hadn't quite been recapped, but it was kind of like a, you know, the company was already like 10 years old. was on a second or third CEO in like a little bit of a weird space that was just not that exciting and not something you'd really think about, especially again, back in 2012. And there was a guy that I worked with at Morgan Stanley named Paul Kwan, who I always say now he's a general catalyst. I haven't caught up with him in years, but I always say he figured out banking. He really did. And he covered this.

sector. I asked him, my dad asked me to ask you if you know anything about this company or this sector, is it interesting? And he, with this great amount of humility said, I don't know. Like, we don't know. It could be. It could not be. But what we do know is who the other people in the room are. And if the people in the room that you're joining are people that you would feel comfortable being in the room with when the stuff hits the fan,

those are probably gonna be the same people that you're with, you know, ringing the bell at the New York Stock Exchange. And that really stuck with me again, was 13 and a half years ago or whatever that he, you know, he told me that and it's stuck with me is it does come all back down to the people. This is a people business through and through. You could argue that at the later stages, the people matter a little bit less. You're gonna argue that they matter a little bit more.

And at the early stage, it's mostly about the market. And at the late stage, it's mostly about the execution. There are so many different things at play. A lot of it is right place, right time. There's no two ways about it. my general takeaways on all this stuff, and I've probably invested in 130 companies now, I got into financial services in 2011. started an institutional venture in 2013.

You don't really know how these things are going to shake out. Freak things happen. I mean, I had an experience at NEA, which I'll share, which gives me chills to even think about, which was, you we hadn't been invested in this company already for years when I joined NEA and I, you know, became a board observer and got close with the, with the founder who was an amazing founder and a really impressive enterprise product builder. and we hired someone as a COO who was

Alex Oppenheimer (33:45.816)
previously a public company CEO and was extremely commercial. And he came into the company and within a quarter, he re-engineered with just incredible elegance and clarity with everyone on board. He re-engineered the entire go-to-market strategy of which segments we should focus on and how we should price it and all these different things. And we had an emergency board meeting because that guy had just died in a fire.

And I mean, it was just absolutely tragic. but those are the moments that you remember because it's like everything can go right. at a minute things can change, for the worse. And we try to make as many things go right as possible and do everything we can and put our best effort forward. But you never really know how these things are going to shake out. So, you know, in summary, don't beat yourself up too much. Think about what things will look like if and when they go wrong as you do the scenario modeling.

but know that we're not really in control for w except for the, know, to the extent that we can, we can control for the people. And that's why, you know, me personally, I invest a lot in people that I've known for a long time, or there's just, there's a handful of people, less than 10 people that if they've known the person for a long time and they vouch for them, then I will trust them. but, yeah, it's a people business looking forward to, sharing more with people soon.

Happy to take any feedback on this format, on the style, on the subject matter. Be in touch.