Mike Lazerow on Why How You Operate As a VC Is More Important Than Who You Are and What…

Thanks for having me, and, you know, congrats on so many episodes, almost 2,700. Really amazing. That

Yeah. The simple answer is timing. I found myself at Medill Northwestern’s journalism school in 1993. This was the eve of the collapse of classified ads, which were the lifeblood of newspapers. And at the same time, I was fortunate enough to land internships at several newspapers, Fort Lauderdale, Sun Sentinel, Roll Call. And around the same time, the commercial Internet, so Netscape and Yahoo and all these companies took off, and I was immediately enthralled by this new thing called the Internet. And it was obvious to me at the time that the future of ad based media was not that bright, and it was even more obvious after my internships that I wasn’t the greatest journalist.

So I just focus on the Internet. I started a company at Northwestern called University Wire. We ultimately merged it with a company called Student Advantage and went public in 1999. So was one of those Robbie Stevens deals, 60,000,000 on 300 valuation, basically like a series b these days. And then I went on to start golf.com with Kass, my wife, my partner, my best friend. We sold that to Time Warner and moved to New York. And ultimately in New York, we started Buddy Media, which purchased by Salesforce about six years after we started.

And I spent close to four years, you know, learning from the best team in software at the time and today, you know, for what it’s worth. And so the transition to investors started really around 2010. We’re fortunate to have amazing entrepreneurs as close friends. We started investing in their companies. Many of them became big companies. And so fast forward, we’ve done 75 deals, and, you know, Velvet Sea Ventures is the vehicle in which we are transforming all of what we have accomplished as entrepreneurs, as investors into what we believe is a scalable business that we’re gonna do for the rest of our life.

And although the product is different than anything we’ve done before, it feels like every other business we’ve started. So investors. We’ve successfully raised money. We, you know, created a product that seems to be well received by our customers, the entrepreneur. And so although investing seems different, and I would never compare it to how difficult it is to growing a tech startup. Kass and I, at least, feel like we’re using many of the same muscles that we built starting companies.

Yeah. You’re really going back far. You’re going back to embryonic, Mike. I was born with a congenital heart defect. I had what’s called a ventricular septal defect, a hole in between the two ventricles. Luckily closed up when I was born, and I was asymptomatic for much of my life. When I was 19, they decided they needed to go in to fix it. And when they went in, they saw that my valve needed replacing and, basically, you know, my heart needed to be rebuilt in many ways.

And so I had two open heart surgeries within eight days of each other. After the first one, my aortic valve burst. I had zero blood pressure, and I had two hours to get into the Operating Room and get it fixed. And, really, I emerged out of that process when I was 19, you know, before my junior year at Northwestern, a pretty changed person. Before that, I was kinda stressed out. I stressed about the little stuff. Afterward, I was fearless. I felt like I was playing in overtime.

I shouldn’t have been there. I should have been dead if it weren’t for great doctors. And timing, I would have been dead. And so I came out of it saying, what’s the worst thing that could happen? I’m alive. That’s really all that matters.

Great question. I’ve been working on tech startups since 1993, 1994. So I’m coming up on thirty years, and, you know, it’s hard to understand cycles without either living through them or working in crypto crypto for three months. You understand kind of ups and downs. And so on Friday, what was it? April 14, I’ll never forget this date, 2000, the Nasdaq, which is where all the tech companies were, fell 9%. And it ended a week in which it lost, I think, 25, 30% of its value. I was 25, newly married, a new house, millions of dollars of stock in a company that I’d taken public.

So had merged with student advantage that lost 80% of its value. So here I was a young guy on paper, seemed to be worth a lot and now not really worth a lot. And so I learned a few lessons the hard way, and I think those lessons still drive me today both as an entrepreneur and as an investor. You know, as I think about raise more money than you think you’re gonna need. As an entrepreneur, figure out how much you need to execute your plan, and then raise two times that number, one and a half times that number.

It almost always takes more money and more time than you think. Because you’re an entrepreneur like me, you’re internally optimistic. And so just make sure there’s some padding too as fundamentals matter. No matter how hot your company is, it’ll eventually be valued based on fundamentals. So sales, profits, growth, net cash retention, whatever your key metrics is. You know? As I say often, losing money is a short term tactic. It’s not a long term strategy. And the last is that just big businesses emerge from crises. You know, my stock from the UI or IPO was crushed, but that’s the same year I started golf.com, and that turned out to be a bigger win.

Without that win, I wouldn’t have moved to New York. I wouldn’t have done Buddy Media. And then Buddy Media was founded in 2007 at the beginning of the two thousand seven, two thousand eight global financial crisis. If you just look at what happened last year, the world shut down tech businesses, you know, or accelerated some great startups, went from zero to unicorn status. So, you know, raise more money, focus on fundamentals. And when there are downturns, it’s a great time as an entrepreneur to start a business, and it’s a great time as an investor to deploy capital.

Well, I think what I meant is that money in today’s market is fungible. You can get it anywhere. Experience and reputation are not. So in venture, if you look at the great returns, experience and reputation drive results for the funds, and entrepreneurs wanna work with experienced and great investors of great track records and great reputations. And so as a serial entrepreneur and now investor, I’ve had the benefit of knowing so many great investors. And I felt what it’s like to work with the most respected investors.

And so when I sit here today, it’s hard for me to tell you all the specific things, Roger Ehrenberg, Karen Klein, Howard Linzin, Ian Sigalow, Jeff Richards, Jules Malts, you know, many others did to help me as investors and Buddy Media. I really don’t remember what they did. However, I can tell you without thinking how they interacted with me, how they showed up to meetings, how intently they listened to me, how they made me feel during good times and bad, how seriously they took my asks.

And so being a great investor is part therapy. It’s part adviser. I find that many of the entrepreneurs know the right answer. They just need someone to talk to. And so when I look at what we’re doing at Velvet Sea Ventures, I don’t judge Velvet Sea by the total assets we have under management. Even though we’re happy with what we have, I care much more about how we show up, how successful we are at, you know, transferring some of our experience, our reputation to the entrepreneurs, especially early stage, so we can produce outsized results for everyone, including the entrepreneur.

There’s nothing better than seeing an entrepreneur come into wealth that will change generations of their family. It’s really an awesome feeling as an investor. Investor.

So the early home runs, you know, both investing out of our own balance sheet and now Velvet Sea Ventures, really boiled down to three things that I think we all know, but we forget often. One, team. Obviously, it’s always about the people. Does a team have a track record of winning? Is the team the right team to tackle the problem they are addressing? You know, winners win. And I see it again and again. You know, winners figure it out. And so it starts with that. Even though we’re entrepreneurs, we don’t wanna run the company.

You know, we wanna support the company. We wanna be called when there are big issues that the founder wanna wants to work through, but, you know, they’re the ones who are building the business. Second one is market. It’s hard to change pilots mid flight. It’s even harder to change the market you’re operating in. Basically, will the market be large enough to support several massive growth companies? I’ve never seen a large company emerge in a tiny market. And so the market is so critical. And then the third is just networks matter.

It takes a village to grow these businesses no matter what the company is. You need to have people around the table. And so I look at the companies that really have hit it out of the park with Velvet Sea, and, you know, it’s Walter Driver at Scopely and, you know, Yoni at eToro and Dan Seper Lee at Leo Labs. Those are people who have built networks around the company that support them, support the company. And so we always look at kind of who are the co investors, where do employees work before joining the company, who is in the year of the founders.

And when we do a late stage investment like we’ve done with some of the companies I just mentioned, we look at it as we’re a welcome addition to the party. We’re not party crushers. And so my two questions to every entrepreneur is what are your top three areas of focus? What do you need to do this year to win? And number two is how can I help? And those are my two questions.

Well, first of all, serial entrepreneurs, you know, produce great results. And the reason is you learn so much in the success or the failure. And so sometimes when you lose, you’ve done all that you can, but market turns against you. For whatever reason, it didn’t work out. That’s the easiest way. And I just feel it myself. The first company was really hard at Northwestern. Second one was easier. Third one was easier. They’re all hard, but you stop making some of the big mistakes, and it’s easier to raise money.

The only way a company goes out of business is they raise money. Show me a failed product and 20,000,000 in the bank, they still have a shot. Show me a successful product that can’t raise money, and, you know, they’ll go out of business. And so I think it gets back to one of something it’s hard for me to do, but I have to continue to do it. Your gut reaction is usually right about people. And so that first gut reaction that you have is so critical.

The problem is the next two weeks, you try to talk yourself out of that gut reaction. So you say, oh, like, this isn’t feeling great, this pitch or this person or whatever it is. And then you start justifying why they’re great and why you’re wrong. Right? And so I think kind of winners have a few characteristics. One of them is they can build networks and teams and get people on board with their mission. So, you know, Michael Jordan, incredible basketball player. He didn’t win until he started really putting together the team.

I don’t think there’s anyone better in sports than Tom Brady in crafting a team. What he did last year was incredible. So there are a lot of other ways to do it, but I think it’s one of those things that, you know, winners just put the diamond on the table and say, this is what it is. Everyone else kind of explains it away. Oh, this is why it didn’t work. This if only this.

Well, the biggest gift of my professional life has been Kass, my partner. We have a very healthy and when I say healthy, to some people, it may seem aggressive, but a very healthy process debate stuff. So what’s the process? Well, the process is I come with a thousand ideas. I love entrepreneurs. Everything’s great. And she was the operator. She was the one who made the trains run on time and built the culture and really focused on how do we build the organization. And so it’s a combination of in order to win in venture, you need a great vision of where the world’s going and the ability to execute to get there faster.

And so you need both. If it’s a bad vision and you’re executing the wrong thing, it’s not gonna work. If it’s a great vision with no execution, it’s not gonna work. And so as we look at investments, we are a firm that is unanimous. They’re four partners, and so it’s a family firm, Kass and me, John, Gianpettrone, and Matthew Gianpettrone. We’re all in with deals that we like. I have to first convince myself that I like the deal. Kass has to convince herself if it’s her deal.

You then have to convince everyone else. And so that process helps us weed out deals that maybe we shouldn’t do. Now we’re an early firm. It’s an extension of how Kass and I always operated, but we don’t think that there’s Kass deals or Mike deals or John deals or Matthew deals. They’re Velvet Sea Venture deals, and we’re all in when we do an investment. All of us.

You know, Kass is a special person. And so she’s intuitive. She’s empathetic. She’s compassionate, and she has an ability to sense things, which which I can’t. And so we have a partnership that I think is the greatest founder partnership that I could ever have, which is we do exactly different things. I’m much more like sales external, you know, for our companies, raise money, product, and she’s much more internally focused. And so although we’re partners, we don’t overlap. We have complete trust. And when you start a company with the cofounder, usually, you’re not married to them.

Even though there have been great results from married cofounders, you basically are getting married. I mean, you’re spending more time with your cofounder than you are with your spouse. And any two thinking people who are smart and thoughtful are gonna have disagreements. And how you work through those disagreements, how you emerge stronger is really important. So when we have, you we have three kids and three dogs and we’ve done all these companies and now this fund, we know how to make decisions. We know how disagreements, and we know how to, you know, go to bed not upset with each other, which is key.

How do you not

So there’s trust, and there and we’re all in. So there is no difference between work and life. Kass is Kass. Mike is Mike. I tried to retire after leaving Salesforce. I did an awful job at it, and this is what we do. We build businesses. We invest. We feel very fortunate to do it. And so when we have a disagreement, we’re not passive aggressive. We’re aggressive aggressive. We work through it, and we get to a better place. And after you do something with someone for twenty we’ve been married twenty two years almost, and we’ve been together for twenty five years.

You learn how to take care of the me, take care of the we personally and that business, and we’ve just been very fortunate. Having said that, it’s not always been easy as in all of our board members and anyone who’s worked with us knows. Like, any cofounders have disagreements, but we think we are incredibly lucky having what we have. And, you know, we’ve built just amazing not only success in business, but with the three kids and the life that we, that we’ve built.

So I, you know, I loved painting. I got a studio. I was, yeah, a little burned out traveling the world. Frankly, Salesforce is an incredible company. I was working, you know, probably harder at Salesforce than I was at Buddy Media, and I was working really hard at Buddy Media. You know, traveling all over the world and Dreamforce and, you know, it’s always on. And so when I left, I just wanted to take a little time. And what I realized is that hobbies are things that you love, but you’re not gonna do that.

And so I found myself just getting frustrated trying to be an artist and gravitating back to what I love, which is entrepreneurs and tech. And very soon, we started ramping up our investing activities and took a little time to understand that it’s just what we do. So what we do is venture, and it’s a part of who we are. It’s our friend group. It’s our support group. It’s our love. And we feel so lucky to be able to do it for a living. I mean, the fact that we get to learn about new companies, meet entrepreneurs, and make money in the process, we are so lucky in so many ways.

Money was never the reason I started the companies. So when I was at Northwestern in 1993, you do not start an Internet company because you wanna make money. There are 13,000,000 people on the Internet. There are no viable business models even though you see them coming. You have no examples of huge companies that have emerged. I mean, this is like pre, you know, Mosaic browser. Right? I think what it represented for me is the money became my ticket to freedom. So I didn’t have to go be a reporter at the Delaware State News, which is where one of the internships I had.

I didn’t have to go get a job in finance or anything else. This became my way of not getting a job. And what became not getting a job, all of a sudden, I was the most experienced person in the room. Because there’s no Internet. No one’s an expert in the Internet. So all of a sudden, you have these 22, 23, 24 year olds who had lived in the Internet in the same way that you have these crypto rich entrepreneurs who have just grown up, you know, trading and in this decentralized world.

And I think what we realize is the money provide a few things. Security, peace of mind, health insurance for us, you know, as I said, had the heart issues, and the ability to have experiences that have really changed our life, whether it’s through philanthropy or taking the kids to Africa or, you know, other places. That’s really all that matters. We don’t buy stuff.

It’s hard. I didn’t grow up in New York City, first of all. I didn’t grow up around money. Our hope and this is a work in progress. So our kids are you know, we’re talking about nineteen, seventeen, and 14. So by no means do we think we have nailed this, but we think that if we model the behaviors that we think are important, that’s the only way to learn. There’s nothing we can say to them. You know, we can’t say be a good person. We can’t say to them, you know, any of these traits that we would love to give to them, self awareness and compassion and empathy.

You can’t talk about them. You just have to show it to them. Part of that is being there for them. And, you know, I used to say every night before my kids go to bed, and I still do if they’re around, you know, love you. I’ll always be here for you, and everything will be okay. Right? Like, kids wanna be supported. They wanna have guardrails up, and they wanna learn, like, what does it mean to, you know, to have a meaningful life to be a good person.

I think the only way to do that is to model it. Unfortunately, if you model it on the other side of not doing those things, that’s where you see a lot of, you know, kids spiral out of control. But it’s hard for kids these days with, you know, social media always on, external validation. It’s a little more difficult than when I was a kid.

easier, you know, with founders. And the reason I say that is we have experience doing what they did. We can share our ideas. If they listen, great. If they don’t, great. Right? We don’t wanna run the companies. We love entrepreneurs. If the entrepreneur isn’t happy, if they’re not feeling supported, if they’re not comfortable, they’re never gonna succeed. And so we do not have a heavy hand. And, you know, the second that we come in with guardrails, with any sort of parental type heavy hand, it kills the relationship.

I didn’t like it when entrepreneurs when investors tried it with us. Having said that, I love robust conversation disagreement. Our board meetings were combination at Buddy Media, WWE, and Hugfest. Yeah. We had strong opinions on our board. We had Eric Hippo and Ian Sigelow from Graycroft and Jeff Richards and Karen Klein. These are big brains, big personalities, and we just went at it, and then we all hugged at the end and moved on. And so kids, I can’t say I have experience as parents. This is our first time.

Right? Your kids, the default position is you’re wrong. Founders, the default position is maybe you’re right. Founders respect you. Your kids are like, you’re embarrassing me. You’re goofy. You make weird sounds. I don’t want you to see my friends.

So I don’t think the board membership matters to the fund. So we don’t say we need a board seat. We don’t say that we don’t need it. And so if an entrepreneur invites us on the board and we think we can contribute, we’ll be on the board. And so I’m on some boards right now, but I don’t look at startup boards. And when I say startups, really pre IPO, as anything other than the sounding board and the guidance that the entrepreneur needs to push forward. Now there’s a comp committee.

There are certain things that are just nuts and bolts you have to do, the audit committee. But those are kind of like working groups in the company. Venture, if there’s a decision that you have to make at a venture company that everyone isn’t on the same page, it’s usually an issue. Right? You know, venture’s kind of binary. These things go or they don’t. And if you’re really looking at financial engineering and your control provisions and all this stuff as your downside protection and you’re actually gonna activate it, it usually means something is messed up.

And, you know, all I can say to other investors is, you know, the most important thing is to listen. You know, I go into board meetings saying, I’m gonna say very little, but what I say, I would like to count. And so it’s really, you know, listening to what’s going on. And in the cases where I am on the board, because I’m so different than just the typical investor board member, I actually will have a conversation with the founder before the board meeting. And I’ll do a deep dive like, hey.

Let’s talk about what’s going on, and I’ll help you figure out, you know, how to structure the meeting. There’s nothing worse than showing up to a meeting, they’re just regurgitating information you could have read beforehand.

Yeah. So board meetings for the investor, I don’t think are as important as the entrepreneur. And so for the board meeting, I treated it as a way for me there was a forcing function to step away for a second. Usually, I did this on the weekend, and I would all of my, you know, direct reports would provide me their information, so financials and marketing plan. And, you know, a lot of it I had, but I was you know, I wanted them to present to me as if I was the board of, like, you know, what are you focused on, and what are the key metrics, all that stuff.

I would then take it in, synthesize it, and then put together you know, it was usually much longer than two or three pages. I mean, it’s usually 10 pages, you know, sometimes longer than that. And my belief is that if I can’t clearly articulate where the company is, where it’s going, and the resources that we need to get there, no one in the organization’s gonna know it. And so if I can’t convince myself that what we’re doing is right, it’s definitely not right. And even if it is right, if we’re just kind of meandering in a directionally correct way, no one on my team knows is gonna know what’s going on.

And so creating and I learned this more from, I think, you know, Marc Benioff with his v two mom and how he you know, a lot of people said, you know, Salesforce has a lot of off sites. And but, you know, Marc really drove home the idea that there are only eight to 10 things we’re gonna do as a company. Each one’s gonna have an owner. Each of the owners gonna have metrics and obstacles, you know, associated potential obstacles. And so the board meeting for me was kind of my way to communicate to the board, this is what’s going on.

I’m not gonna present to you. And I would, like, drop stuff in the letters, as Jeff probably told you, that I would ask about, like, totally random stuff. Right? There’s no way that they would know, like, personal stuff about me, and I would ask someone in the board meeting just to see if they read it because there’s nothing worse than an investor shows up to a board meeting, like, unprepared in my mind.

it? Well, most of them did, because I think after the first meeting, they were scared. You know? Because, you know, the good investors look at entrepreneurs as their customers. If they didn’t, I probably would have been like, dude, not cool. Or I mean, it wouldn’t have been Karen Klein. She’s, like, reads everything and will call you and, like, be so great about her discussion.

Communicate clearly. Communicate regularly. Communicate the wins. Communicate all of the shit sandwiches that are going on. There’s not one company that doesn’t have just stuff blowing up every day. Let’s just say great venture investors have no problem with bad news. Our day is loaded with bad news. We have a huge problem with surprises. Don’t tell me your rate you’re gonna run out of money next month. Don’t tell me after the fact, like, three months that you lost the biggest customer. Share all of the good news, the bad news, not in a way that you’re trying to paint it a certain way.

And, typically, it comes in like, here are the wins, and here’s what I’m worried about. Customers. We lost these employees. Our net promoter score is down 20%. Whatever it is. Right? We didn’t hit our revenue numbers. It also feels good because bad news eats you inside. If you don’t get it out, if you don’t share it with someone, it will just stack on top of each other like really heavy books you don’t wanna read and then eventually fall over and either create disastrous effects for the business or disastrous effects for your health.

You know, founder depression is really a big issue. A lot of it is because of the gap between what they think the expectations are and the reality of their situation.

Any relationship that’s worthwhile is just communication. It’s over communicating. I feel like as the entrepreneur who now is an investor, it’s up to me to share expectations. And my expectations is keep me posted, be real, good news, bad news, What can I help with? Which is like which are issues that are important. I don’t wanna run the business, but if you get an offer from a company to buy you, who else are we gonna talk to? And I can help set up those conversations. Right? If you’re gonna raise money, I can start making introductions a year before to great investors.

A lot of the people who we’ve spoken to, just sharing the expectations that I wanna be a partner. I don’t wanna be your boss. Now I have the benefit of having Kass on my side, and Kass is the best CEO whisperer whisperer I’ve ever met. Because she’s doesn’t take board seats for the most part, and there is a dynamic as an entrepreneur that your board investors, you feel that they have more weight than your investors who are not on the board. You know, it’s natural as a human being to feel that way.

And so sometimes there are issues that they don’t come to me, and I don’t want them to. I’m on, you know, super rare NFT art marketplace. I’m on the board. John Crane has a great relationship with Kass, and Kass has helped on hiring and structure and processes. I look at, you know, Dan separately over at Leo Labs who has worked with Kass to find a general counsel and a CFO and help do the deck for the series b, and then we made the intro to insight that led this with us, $65,000,000 series b for, you know, the low Earth orbit, you know, company.

Those are relationships that maybe it’s not a board level thing, but having this person who is empathetic, who has been in their seat, picking up some of their work, and just helping them. Like, it’s not easy for first time entrepreneurs to find world class CFOs, CROs, you know, chief customer officers, you know, VP of finance.

So I didn’t have a ton of insecurities when we were investing out of our own balance sheet. We did about 60 deals, you know, with our own money. We never raised outside capital. And so when we decided to, you know, partner with Jim Petronis and do Velvet Sea Ventures, you start asking yourself questions like, okay. I’ve gotten 250,000 to a million dollars of, like, personal allocation for all these deals. Can we get 10,000,000? Can we get 20? Can we get 50,000,000, which is, you know, the largest deal that we’ve done?

Are we kind of like a cute addition to the cap table, or are we like a strategic investor? Because we want to work at the highest levels of venture with the best co investors, the best entrepreneurs. I had all these other insecurities that I hadn’t felt since I started really UI at Northwestern. You know? I think everyone, no matter what they’ve done, you know, has this kind of impostor syndrome. And so although I’m friends with all these VCs and I’ve made all this money on the investments and I was pre IPO and all these companies, including, like, Facebook and Tumblr and what, like, can I do it for a living?

And so as we come out of, like, our first fund and we’ve been able to, you know, invest in 15 companies, you know, the most important thing to me is we’ve product market fit. We are people who at least 15 entrepreneurs have said, I really want you, and many of which wanted us to lead. And there’s no better honor that we could get of getting a yes from an entrepreneur. You said it early on. It is so competitive. And so we can just be who we are.

I can’t show up and say we have a forty year track record and blah blah blah. We could say, hey. We’re husband, wife. This is what we do. This is what we believe. Here’s our track record. Love to work with you. Here’s every entrepreneur we’ve worked with. Go call them. Do

So that was one of my big fears. And so the way we’ve gotten around it is being who we are, which by nature is collaborative. If we don’t have sharp elbows, optimize for the long term and not any deal, there’s not one deal which, you know, we’re gonna go to the mat and say, we need the whole allocation. We need this, this, this. As soon as we start talking about, like, we need, we’re done. Like, it’s not about us. It’s about the entrepreneur. Most of the terms are pretty standard these days.

So it’s like, we don’t even have to negotiate that many terms. And so I just look at what we’ve got today. And, you know, if I look at, you know, a company that I helped seed way back when, Scopely, you know, he didn’t have to open up allocation for Velvet Sea. And few rounds ago, we got a really big allocation because we’ve, I think, been helpful. I look at Sutra, which is a startup in the fitness space, and that’s one I collaborated with Jeff Richards on.

Right? I look at Leo Labs that I just spoke about. I sent it to Devin Parekh, one of my idols in the investing world, who is also on our board, and we co led it together. And so we keep our funds relatively small. We have iconic business builders, you know, our investors and LPs. There’s plenty of money to go around. More and more LPs are saying that, you know, venture actually is an asset class, and let’s ship more dollars to it. And so it’s not like for us, it’s about, you know, the super rare company, which I talked about.

We cut back our allocation significantly in order to make room for Marc Benioff and bunch of our friends who wanted to be investors. Right? So it’s how it gets back to that first comment. How you operate is so much more important. No one cares that I’ve led all these rounds and that we made all this money. They care that we’re, like, gonna be with them during good times, during bad times, and we’re gonna be who we are. That’s all we can do.

So my biggest misses were really as a personal investor. You know, sitting in a hotel room in 2011 with Kevin Systrom and Travis from Uber and, you know, having the opportunity but not raising my hand and saying like, hey. I’d love to invest. Right? I think my biggest mistakes as a venture investor has involved selling too early. And so when you’re investing your own money, you know, you kind of wanna recycle capital. And I look at some of the deals in which we took money off the table, and it’s like, oh, that was a mistake.

You know? I was concentrated in Salesforce stock. I sold some of that. I have companies that I seeded that I took money off the tee. You know? One of them, you know, Braze is going public. I helped get that company going. Miles was one of my top partners at Buddy Media. Incredible company. Right? And so what I’ve learned, which I wish I knew at the beginning of venture, is just hold on and keep investing in the great ones. And that’s what Velvet Sea is all about.

It’s all about like, oh, you’re raising another round. We’re putting in more. Right? Like, we put $15,000,000 more into Leo Labs because he’s doing such a great job creating the data service that makes sure that satellites don’t crash into, like, nuts and bolts. And so it’s like, he invited us in because we’ve been so helpful. Right? I’m not selling Leo Labs maybe ever.

Yeah. So we’re registered investment advisers. So we don’t talk that much about the structure, but we have funds which, you know, we invest out of. And all of our partners, including us, you know, often want more allocation in certain deals, so it’s very easy to spin up other entities to do more of a single purpose investment. We just believe in meeting entrepreneurs wherever they are. We’re multistage. And if we can help with larger check, we’ll do it. But we’re not interested in just kind of putting together massive there are only four partners right now.

We’re not interested in putting together massive funds that would be hard for us to deploy right now.

I can’t wait. This is my favorite part of your show. Oh, it’s my favorite too. And I really hope I don’t screw it up, but I’m a little nervous for this, but I’m ready.

My favorite book by far, and not even close, is Viktor Frankl’s Man’s Search for Meaning. It was a book that I’ve read many times. I’ve given it away to many of your listeners. You know, it captures Viktor’s years as a prisoner in Nazi concentration camps during World War two, and it’s really about the most important part of being human, which is identifying your purpose. Identifying something that gives you purpose no matter how miserable the circumstances are. Something to feel positive about, something to immerse yourself into, and it’s been just an inspiration for me.

And I don’t have any right here at my desk. In New York City next to my desk, I have just a stack of these. And when I think someone needs it, I send it to them. Tell me, what lie do rich people tell themselves most often? Biggest lie is I know the answer. What I found was the day we made money or the day most people make money is the day people think they know all the answers. You know, everyone around you thinks you know the answers, and more dangerously, it’s the day you start to think you know all the answers.

Just because you made money doesn’t mean you’re an expert in anything, let alone everything. It usually means you worked hard and got a little lucky. You know, be careful not to think that you know all the answers.

I mean, I hinted at this earlier. It’s just trust your gut. Like, at least for me, my gut is always right. Trust it. Tune into it. Believe it. You know, there’s something about, like, intuition and experiencing all these things that that first reaction is the right reaction. Every other reaction is typically bad. Now if your gut has gotten you in trouble, like, ah, I shouldn’t listen to my gut. It really is awful. Then don’t listen to it. But I most people, the gut is really where the truth lies.

I mean, really, what matters is not what deals you miss. It’s easy to sit back and look at all the success that your friends are having. You know, what matters is what deals you do, and that drives how you spend your day. And most importantly, it drives the size of your returns. Whether another fund does better or worse, doesn’t matter. You just have to do the best that you can do. And don’t sell too early.

You You know, know, I’ve I’ve now now talked about this company a bunch. You know, Leo Labs, is our last one. We just announced it. $65,000,000 series b funding. Velvet Sea led the round with Insight Partners. We’ve now you know, we’ve made three investments as a fund into the company. My partner, John, was one of the early investors in the company as well. I mean, it’s extra sweet because there aren’t many more confident or nice people than Dan. You know, Dan separately, who is the founder, CEO.

You know, we made the investment because they’ve been executing. We think it’ll be one of the most important companies in one of the largest emerging markets, which is low Earth orbit, which really is where the action is in commercial space. And they basically make the business of space possible. We are so excited to be a partner with

No. I love the show. I’m so honored to be here in your first 3,000 guests. I try to be the first 3,000 guests of podcasts, and you’re a true, you know, legend in venture, you know, I really appreciate everything you do.