#206 with Brianne Kimmel - How Venture Capitalists Make Money

if you could get into a top twenty university and you have to get going into a ton of debt it is one hundred percent worth it in that if that's the case it ain't broken i think it's doing great yeah i feel like i could rule the i know could be what i want to put at all in it like a days off on a goal less travel never looking back okay what's my basement we by the way you know when you're listening to this it's all gonna sound smooth but we've just recorded this like three times because remote work still sucks a little bit but we have brie here brie brie kim is an investor in mostly i think work work related products so maybe you could tell us why it's so hard alright let me just read three things off your little bio thing here that i think are interesting so solo capitalist so you raised your own fund by yourself after never having worked in vc before that is that correct that's correct okay great another one according to this you invested in seven unicorns already which is kinda nutty what are the seven yeah so started work life about a year and a half ago invest did in hop web flow which was an angel investment from when i was at zen pipe public a bunch of interesting companies in sort of future workspace k well that's pretty impressive okay and then another one that's on here that i think is kinda interesting then i think we should just jump in on i don't know sam do you wanna you wanna start with i i wanna start with this ant day and story but that's mine i wanna start with this that's mine brie do you know what this podcast is about i do know what this podcast is about i've actually listened to many episodes i'm a big fan great so we don't need to explain much to you so brie you and what you and go ahead and plug your new podcast you have coming out what what's it called oh we're coming in hot we're plugging the podcast already i thought that was gonna come in later no no we do have to whole and the people are we're i'm not gonna are and they'll do it yeah so we're the first podcast after this one to be part of the hubspot podcast network so myself and my best friend alexa guy she's a stand up comedian she makes a lot of tech parody videos we decided to start a business podcast with the fine folks over at hubspot who have been awesome they've given us a team we've interviewed interesting people it's it's been cool for me because you know as you mentioned i mostly do software investing and we're actually interviewing a lot of direct to consumer founders and people that i've never met before and so we have this new podcast coming out called the shake up where we interview business leaders about very specific decisions that they've made that have changed the trajectory of their company so the hang on is that a like this the vibe like comedy because she's a comedian like is this call her daddy or is this like you know how i built this or what is this it actually that's a really great that's a really great point we're somewhere between the two we wanted to make it interesting and educational and it is more of a business audience i think in this new era of working from home unless it's interesting and entertaining people don't wanna listen and so it's not corporate it's not boring one of the most challenging parts of the podcast for me is that it's very hard to get business people off script they've all gone gone through comm training they all have you know their executive coach to get them to really open up and share vulnerable moments or to be really open and authentic has been surprisingly really hard sam is really good at it he i don't know how he does it but he he breaks through that every single time but i gotta wait john you i mean i i think you're good at you're you're pretty good at that too i think we both are you're good at getting them you you're good at like getting people off the script really good at getting people off the script because sam will do something like he'll like he'll see you and he'll be like he's like like yeah he's like you're good looking i mean like not traditionally but like you're you're good looking so what and then they're like whoa what talking about and it's like kind of a compliment kind of an insult and then they're just trying to figure out like where do i take this and so then like something natural comes out or he'll be like you know ask them about i don't know some something weird that's sit that's behind them in the room or something like that and usually gets people off so i'm so so bad at this that i had to bring a stand up comedian to really like warm up the guest i i like as an investor it's a little bit robotic and you tend to ask the same five to ten questions right and so that's alexis job she's world class at getting people you know maybe flattering them a little bit maybe flattering her self maybe complementing the show but then finding ways to get people to open up and did you be a little bit less scripted is it hard to be on a podcast with somebody who's a professional comedian like i know sam struggles is just dealing with my level you my podcast are you intimidated by your your comedian coast you know it has been fun you know now that we have a producer as well you know the producer is very clear at helping us define our roles and so like i know that i'm not funny it's not my role to be funny on the show it's my role to like bring in data and research and i get to be the nerdy one which is great i don't attempt to be funny at all yeah that's my strategy by the way sean they have like producers and shit and like head like she's the big like resources like heads shots i i i call the alarm the lady who runs the podcast network at the house bob like wait b of these folks are getting like producers and shots like i've been using like eric on fiber like you had to to like rig this stuff together it's i don't even show up to the meeting so they're probably like yeah of course you don't get it you don't show up to the fucking meeting why would we give you any resource it's so for you've listened to a you've listened to a couple podcasts i wanna just so what we're gonna do is we're gonna brainstorm a little bit i know that you who've you've got a a couple ideas here that i definitely wanna talk about i wanna talk about your calendar because like when i see that i just wanna kill myself i can't believe it that's your calendar i'm welcome i'm embarrassed that you saw it actually i'm a little bit embarrassed oh my god so well i wanna talk about a bunch of stuff but before we get into can like can i tell you guys something that i've been obsessed with over the past week so there's this new anthony bo documentary i actually don't remember what it's called do you know you guys know i'm talking about a road runner it's called road road runner okay so it came out last week and it's basically about his last maybe three or four weeks of life or something like that and then talks about like details this the last four weeks of life and talks about the the this whole journey and whatever that's not the point the point is is at the end they have this amazing sound byte so basically right before he died he wrote email to someone and it wasn't like a suicide note but it was like like i'm sad type of thing and you hear him read that email well it's not actually him it's ai he never actually said that but he died you know he wrote the email and he died and this company used this technology to to read out the email and it sounds just like him if if i wasn't like a nerd and researched it i would have thought that it was him and i started i started thinking about this i started thinking about a few things and the reason i kinda impair putting all this is together is i read the story about this guy last week named josh and basically what happened was his girlfriend died and he used gp t three or g yeah gp t three and he loaded up a ton of social media messages like you know facebook messages and tweets and twitter stuff or and and and text stuff that she had said and he put it to g three and he made a girlfriend who knew she died and he could talk to her and and and and and like feel like he's still connected a do you think this is wrong and creepy be that anthony board day thing that's obviously that's gonna happen that should that's gonna happen in the future how movies are gonna are are gonna come about but three when are we gonna start talking to our dead moms fuck came in hot at the end there is this crazy like like like it like the fact that anthony board day did this do isn't it it while that we're gonna be having these conversations i don't hang around with the smart enough people to be to be who build our did you ever see that episode of black mirror where they did this basically so do you watch any black mirror sam no it's alright it's a little bit depressing but it's like too accurate also at the same time so the in in black mirror they take this to the extreme and basically this girl's living with her boyfriend and then by the you know middle or end of the episode you realize that this boyfriend is not like real is basically like an ai robot that is just like kind of like he's not perfect like so it gives her companionship because like it's like he's still here he's doing all the things it sounds like him and it looks like him but he's not actually human so it's kind of like you know the uncanny valley it doesn't seem it's not actually the real thing and so it's kind of depressing for her to be with this kind of like shadow of her boyfriend or whatever and so there's been a bunch of people trying to do this with gp three and somebody did it with our podcast i don't know if you saw that somebody uploaded my a bunch of stories i told or something like that uploaded i saw that yeah and he's like look you can ask you on a question and then like it gives a pretty real like it's like me when i just bullshit some answer it's like it bullshit it just as good as i can i'm like wow this is kind of amazing so i think we're getting we're getting we're getting closer to where that's that's like it's like the anthony bo thing where of course it's not gonna be fully accurate but damn it's like it feels like magic it wasn't that this wasn't really a thing five ten years ago b what have you seen in that space yeah i mean one point in that with the bo piece i mean what's interesting there is you know he the question is are you building a legacy and are you carrying someone's story forward i think that's really cool i think if there are sound bites or old songs or if you can take a book that was written a decade ago and then put it in the voice of someone who's already passed away that can be really cool i mean that's really like a strong storytelling angle in a way to really continue their legacy the kind of the gray area for me is you know for the guy that's created a fake girlfriend that's using previous text conversations like i'm a little bit concerned for him and in the long the long term you know i think he's maybe staying in the past as opposed to like you know going through therapy or you know spending time with family and friends and then like getting back out there again and so it probably depends on the use case in some of the scenarios for these technologies but i agree i love black mirror i've watched them all binge watched them all and it's really creepy to see that a lot of these things are actually proving to be true so then i was i was looking around at what other stuff is like this there's just lot this one called ai writer dot app and what you can do is you can look at the variety of different dead authors and dead famous people that they have and they've uploaded all their personalities and you can ask ben franklin a question it's pretty amazing anyway i just wanted to tell you all about that i've i've been ob obsessed about this so there's one that i'm gonna tell you guys about but you i i almost don't wanna tell you until i lock in my full investment but i wanna invest in this company i saw it i haven't even had a chance to talk to them yet but what they're doing is they basically made a a a version of deep fake that you can do for yourself so you can thank customers personally for for a purchase or for anything that they did so basically you record yourself once sitting in a room like i'm here right and i say oh you know thanks for leaving that review on itunes for the podcast oh or thanks for tweeting out the podcast and then what what it does is it basically takes me in that scenario and it starts it off with hey sam you saw your review just wanna say blah blah but i don't have to record the hey sam part the hey sam part the personal touch gets basically deep faked in the video and then they can insert any of the variables so like let's say it's commerce i could say hey blank name right so be like hey sam think you know thanks for thanks for shopping with us i hope you love the cast mattress that you just bought right and it'll make the whole thing sound pretty seamless and just input variables from from a database essentially and just turn it into your voice so i think that's kind of amazing to add a quote unquote personal touch that's gonna be you know it scales somehow that scalable my scott zach found it and he sent it to me i'm really excited for that use case i'm also really excited to see some of the b like i can't wait to see a person's face say hey first name last name right i was going thanks for being a customer right hey yeah asshole thanks i find sometimes the automated stuff i've tried it at some of these automated gifting services before and if the database isn't in a perfect form and first name last name isn't spelled right you end up looking like an asshole but it can be pretty funny so brie i have to ask you a question it this is gonna sound like an install which we just told you i'm apparently known he's about to do the this this is not an insult this is out of fault alright so i'm looking at work life ventures so this is this firm you start in in two thousand nineteen before that you worked at i was looking at your linkedin what was starts with the z the the big software the the best you had a normal a good job there so like you are a relatively normal person but you are investing in like the most baller companies at the earliest times how like the the let's handed compliment is like you're not really like a somebody and yet somehow you already are somebody how on earth did you pull this off this somebody i think can go we can go even even before zen before zen and i worked at a big tech company i was at ex xp went to a skit state school group up in ohio i mean we can we can cut the data anyway i'm a very normal person i love a very normal life like i'm not your like venture capitalists it's flying in private jets and you know doing all these crazy things sure you might be now yeah you're now mean might be now you said it sounds like you're about to make a killing well going back to your point thank you that wasn't insulting that's like very clearly something you can see from linkedin is like you know i i started out as a marketer started meeting startups ups on evenings and weekends started hosting dinners the interesting thing that i i don't think a lot of people truly realize until you're on the ground in silicon valley is you just end up meaning a lot of people just buy proximity like you walk into a dinner you make one or two connections you keep checking in with them you stay in touch and that's how you build your network and you know everyone there is going somewhere like you don't move to the valley pay crazy insane rent prices at to not be like in the mix and so i found that you know a lot of the things that i did early on as an angel i was really intentional about like the angel investment in web flow i had organized a go to market workshop invited web flow so i had like you know a whole day with the team which was great i hosted a couple of no code dinners just spend as much time with them as possible i try to find interesting ways to really build close relationships with a handful of companies i know we talked about you you mentioned my calendar and how insane it is i actually don't take that many meetings and i i rarely do one on one coffees with people which is really interesting and kind of a different strategy from other vcs but i try to find interesting touch points that will give me enough of an angle to invest in a company that's starting to work so what flow can i just read your schedule by the way because nobody's looking at this so let me just take let's just take a wednesday okay here's wednesday just for for people you you wake up seven am morning block what what happens in morning block are you morning my i go to the gym usually i got a gym during covid i rode my peloton but i'm i'm now back to going to the gym right okay exactly so we're going up until about eight thirty so for seven to eight thirty that's like get ready to go to the gym go to the gym it says peloton forty five alright great now we have morning block two what's happening in morning block two morning block two i send emails to portfolio companies and ask them for ways to help or sometimes there's projects specific tangible projects i have to work on for a specific company cool so thirty minutes there then okay where we are so team check ins we have a one on one with neil great email processing i little love that you're an actual machine i'm a little bit embarrassed right now this is like you're reading my diary it's like you put it on the internet nothing i know like read it period loud it makes me sound insane so thank you okay prep pitch number one that's twelve fifteen to one then we have pitch number one so you you do the research before the pitch then you take the pitch oh that's interesting usually i start the call and then they see my eyes frantically going around the screen while i'm looking for like shit did i who is this what is the deck what is the name of this company and i'll just be like let's just before we talk about your company just tell me about yourself while i go look at what company you are alright so so you're doing research you do you pitch next steps so you do immediate follow ups you do your second pitch prep second pitch second pitch follow up text triage what's that like text your text messages yeah i am horrible responding to text messages i will read them i will think that i responded and then i'll reply like forty days later and so i actually blocked time in my calendar to go through all of the techs that i'm getting throughout the day you all this i do i do and i will say for people that aren't aren't adventure or aren't doing early early stage startups a lot of thing is done over text and over phone calls it's a highly inefficient process it's not like corporate where you know everyone's on email and everyone's on slack it's mostly through one on one text so we'll just round it off so we're going email processing part two then ad hoc strategy what does that mean ad hoc strategy is so part of the the goal of work life is we help a lot on go to market and so typically we're working through various different go to market strategies for certain companies gotcha then you do a virtual dinner amazing life admin so that's like you know what laundry what is that code for laundry when i when i published this it was around the time i was i had a crazy backlog of just like random things like i woke up on morning was like my driver's license is expired my passport is expired i haven't left my house in a year like i need to get my life in order and so that was the week that this this was screenshots published there you go alright eve evening block from eight pm to eleven pm and then what at bedtime eleven pm yeah usually okay do you think that's a day we wanna get weird i have i an eight sleep as well so i could probably like throw in my sleep up if we wanna get really weird do you do you so i i i try like i say no to everything i i think sean you might be the same way but for my i try to have nothing on my calendar i don't wanna talk to anyone ever and like a meeting to me is like a really big deal like i just don't wanna do it at they gave me an ea and i was like oh so great first time having an ea what what do you do and they're were like oh like calendar i manage your calendar if you wanna book meetings i'll book them for you if put people wanna book you i'll do it and i was like oh okay alright was look you're gonna love me this is the easiest task ever somebody asked for a meeting just say hey he he asked if you could slack them instead and then if i ask you for a meeting just say are you sure and just delete all the group meetings in the next three weeks just delete them and i'll add them back in if they were important and so basically her job was just to make sure nothing gets on the calendar rather than taking things off or rather than putting these on do you think that this calendar has being this disciplined do you think it's helped you because it's i mean i'm looking at like i'm trying to find all the unfair advantages to how you got came up so far fast probably not gonna say it sucks i can tell you i can tell you pros and cons pro pros to the pros to the insane calendar is it did provide a lot of structure i felt that working from home i am not the best at working from home i will say that and so the structure has been really helpful it's been great the reason for a lot of the new routines is because i do have a team now so i have a team of five people behind the scenes and so i need to make sure that the the firm is running accordingly and so i think having that structure is really helpful i also find it does help me say no and to have specific moments throughout the day where i text founders or jump on a call just because i i had talked to a lot of traditional venture capitalists and if you ask them how they spend their week or if you ask like you know what did on friday friday afternoon like what did you do this week it would all be a blur because there's so much activity and so many things that are happening and so i found that quantifying it a little bit was a nice way for me to at least establish some of these routines like will i continue doing this forever probably not but it's at least something that was helpful when getting the firm off the ground and sam we were looking at that that spreadsheet of what do vcs make i think we should talk about that so this is what of vc you wanna this you wanna capital do yeah so the that grab the the reason why go ahead you find it sean and then i'll talk the so bring brie the one of the reasons why i'm prodding you so much is this whole vc world it it kind of i i just like i i can't tell if i'm just low iq i just it's really hard for me to understand like how the money actually gets into breeze pocket you know like how i understand you invest it i understand you invest in in in startups and you wait ten years to sell but like sometimes i'm curious like okay but how much money can you actually make and so we recently found i have no idea how we how our friend found it a spreadsheet that i think it's all user submitted salaries and carry numbers of maybe like a thousand different vcs you wanna read it read that off offline i'm trying to find is it's a little bit hard to find here while while we're while we're live but basically i don't know if you could do it sam if you could find it but basically it it broke it down by fun size so it's like alright if so you were people were volunteering their information here's what i make that's my base compensation here's what i make us a bonus and here's what my carry is and it was like you know my fund is zero to fifty million fifty million to a hundred million hundred to two hundred fifty million and then like all the way up to a two billion plus fund and and it was it's even there there's like quite a lot of variety right because not every partner has the same deal but what it looked to me like was that for small funds and you correct me if i'm if i'm wrong here but this is this is my my summary of like you know five hundred rows of data just eyeball balling it and it look like if you were at a small fund let's call it under a hundred million dollars as your fund size the good news is you know you're taking two percent of let's call it a hundred million that's two million dollars and usually it's just one or two partners maybe you know some some admin people kind of behind scenes but you can you could basically take a a large salary and you have a large percentage of the carry but you but then on the other it's a the small the small funds seem to do pretty well and then the the really large funds our like a two billion dollar fund their you know their fees itself is insane or a two percent of two billion every year that you're taking is is large number and then they're carry you know they're the multiple they're they're expecting to do on a two billion dollar fund they may they may not five x that fund they may just two x of the fund or three x that fund and so their carry expectations are different looked to me like this venture capitalists kinda have like a high paying job maybe four hundred five hundred thousand dollars a year and then if they hit winners like you seem to have hit some winners or you have some winners in your portfolio like you you you've hit a lot of winners if those pan out if hop truly does end up as a five to ten billion dollar company then you know you're gonna you're gonna have a a a big windfall which might look more like twenty to fifty million dollars can come your way if these winners pan out go public and whatnot so tell me how accurate that is or like put differently what are your expectations on like how much you can make doing this thing you're doing now yeah great question i wanted to touch on something that sam said as well what's interesting when you look at venture capital today is when i was initially starting the firm i went into this with a belief that venture is or traditional venture is on the decline i saw angel investors that were getting into really great rounds i saw solo capitalist or super angel was like i know scott be has been on the show gill is a a close friend and someone that's deploying a lot of capital i mean a capital that looks like almost a large top tier firm and so i saw that individuals were doing the work that you know a twenty to thirty person venture firm we're doing and so i think it's interesting to see like i'm a great case in point where i was in marketing i went to a state school i grew in ohio like i'm by no means a pe agreed person but i have been able to build a track record and i have been able to raise outside money and i think this is just like the very very early days for what's about to happen where there will be a lot more people that look like me and there will be a lot more people that start their own firms because i think it's one of these things where like the nature of venture is changing and my investors like smaller funds because you have one of those higher return profiles as opposed to some of the larger institutions that their multiples coming down over time and many of those lps are having a hard time getting access to those funds at all so a guy like so who what was you guy's saying lad gil is that you say same i've read a great book by him i forget operator manual i think it was called no a high growth start or something like that hi handbook handbook manual handbook yeah it was good that was a great that was a great book i had i hadn't heard of this guy but like i see him everywhere and so is this just basically an incredibly high net worth liquid person who just writes massive checks to hundreds of startups a year is that just what i mean is it as simple as that in a large case it's a combination of personal capital plus outside money as well i will say that a lot of the solo capitalist i mean even the you know my fund size is primarily my first check in i do a lot of sp and i do a lot of follow on investing and that's with a handful of lps and so many of us we kind of publish here's our core strategy and then behind the scenes many of us have other playbook that we're running as well and have you made have you had any returns so far since since you've started i have those have mostly been on the sp front you know i i'm i'm setting up a special purpose vehicles where i have one or two lps where they're it's it's primarily their capital i might write a small personal check or something small out of the fund alongside that but i'm starting to see some returns in companies however i will say i'm holding on all of those positions what do you think is a root because this is what the thing me and sam talk about which is like with investing you you have ill liquidity for a long period of time now typically right you invest in a startup it might take seven ten years for it to exit and along the way you're getting these paper markup and so i guess like give us a sense of if you are if you do go the solo capitalist and you've i would say you're like the success case of going the solar capitalist route there's a lot of people who could try it may not have the same results zoo but let's say things work out how do you think about because i think a lot of people are trying to decide do i do this do i start a business do i take a job somewhere or do i work at a fan company do i what what do i do and so what do you think realistic expectations for if it works this is what it looks like over like at seven year period right the first five years you're just taking kind your salary which might be two hundred or two thousand might be little more a little less and then like but you're hoping by your seven or ten you're able to get this this type of a personal personal win out it which makes your average over the ten years look really good i guess can you walk us through the numbers because i think for most people this is just a black box i don't really understand don't really understand how the money would what the money could look like in this if things work out yeah i i'm i'm hearing all sorts of variations to this model i mean i have friends who are running early stage start and they've raised you know five to twenty million dollars and they're deploying capital while they're operating i think that's the best case scenario i mean if you're ready to start a start up and you have ceo potential and you know exactly what you wanna build that is gonna have a much higher you know you're you're building a legacy there you have the ability to hire people like those people will even in start startups like i just think there's so many great things when ceos are active angel investors that's why i chose to raise from a lot of founders and not traditional lps or you know traditional finance financial institutions i think they have a lot more access and they have the ability to invest in startups opportunistic not as their full time thing and while they still have really great access in mind sharing the ecosystem you know for individuals like myself like you know i had ten ish years of of tech company experience i don't even wanna say start of experience because i was at a big company and then i was at a second more medium sized tech company and those scenarios you know you your investors are looking for your ability you know have you already built a track record do you have an ability to invest in really great companies and so that's one thing to consider i actually spent about two solid years of blogging tweeting you know really investing in building my personal brands so i could gear up to go and raise outside money so i think you have to build a really strong case if you wanna raise from outs from outside investors the one thing that i will say you know angel and carta have made this incredibly easy i think the forcing function venture which is caused you know the ability for anyone to become a vc or to raise their own fund is these platforms which basically connect you with investors they make it really easy to manage like your back office and you know you know don't have to do what's lawyer all that stuff right that's the you don't you dodged my question on how much money you can make but that's okay maybe you go maybe maybe you don't wanna add to that no let's go into it i think this is fun i mean this is this is the the title of the podcast i think i think we should go into it i would say so every solo capitalist does it differently some people are purely one person they're pocket all the management fees they're taking all the carry i'm actually seeing today you know if you're raising a five to ten to maybe even twenty five million dollar fund if you're doing something on angel list that's a true solo capitalist fund you can actually take two point five to three percent management fees what i did for mine is i did two percent management fees the way that i thought about it because and that this is a rolling fund it could be a traditional fund or it could be a rolling fund so the rolling fund means that structurally you're able to talk about your fund broadly you're able to market your fund which historically you know you weren't able to market your fund when you're actively fundraising you know if someone has distribution if you have a podcast you know if you're an active angel investor and you already have great deal flow you're leaving high growth startup and you have great network rolling funds are great because you can market it and you can constantly be bringing in new lps it's not something where you go out you raise money you ask a bunch of people for money you know maybe a handful of people say yes you do a first close you go out and ask more people for money you do a second close like that historically has been a really time consuming process and as a solo capitalist how you spend your time is your strategy and so you don't wanna spend the majority of your week meeting with investors and you're not meeting with startups and so it can be something that really impacts the business model and so i think that the rolling fund works well if you already have distribution if you don't have distribution you you know wanna experiment with raising outside money oftentimes the people that are doing this really well are individuals that have a valuable network i mean maybe they're leaving stripe or airbnb b or one of these companies where they have a very entrepreneurial culture and the people you know that used to sit across me at work or are likely likely to go leave and start a startup up and they're gonna be able to raise from top tier funds like that's one a strategy as well where i've seen many of them go out and raise some outside money or you know there's a lot of the startups that have been really successful in the last generation their alumni i actually have whatsapp groups and they've have created their own syndicate where you can c invest alongside the airbnb beam mafia or there's a stripe group or that's somewhere where i spend a lot of my time where i help a lot of the alumni groups build their first syndicate and that's been a ton of fun because you get to meet the whole company and you get to really you know understand who are some of the power builders i guess i would call them inside the company who are most likely to even and start something so so what would you say the the potential earning then is for solo capitalist to sean's question yeah it it depends on your goals i mean i'm seeing solo capitalists that are going out maybe you start with a ten to twenty five million dollar fund one for how quickly the fundraising climate is moving today you know in the next twelve months you could go out and raise you know a forty to sixty million dollar fund two the interesting thing is like this isn't purely a new model i think what's changed is that the types of people that are starting funds do look very different from the last generation like i look at items sand cut at fe felicia you know he was a super angel and then started f felicia ventures mike maple who's has been on the show you know mike was a super angel and then he started flood gate i think what's different today is how fast you can make money because there are sp and ways for individuals to invest in later stage companies like early stages is one thing but i think later stages where a lot of people are finding great returns in a short amount of time so you have your twenty five million dollar fund as the operator what do you expect your your your pay to be it's a good question i mean as as you said earlier i mean a lot of people are holding for the long term and so i wouldn't bank on carry you know in the first you know seven to ten years but you do get a a reasonable salary because many solo capitalists are do taking two point five to three percent management fees so two point five two point five percent of twenty five is is what i don't even know i can't do math in my head you that this great line go ahead pump on pumps podcast you goes somebody asked him this question they're like wait if somebody has a hundred thousand bitcoin bitcoin goes to seven hundred fifty thousand how much does that worth hey just guys i don't do public math think of what yeah what math they're like what what did just say because i don't do public math you don't do math in public he's like yeah i don't do public math and i just was like that's actually a great policy i don't do public math so two point five of twenty five is so you have you have six hundred and twenty five thousand dollars a year in salary off a twenty five million dollar fund and then the carry a fee sorry and then if that and if you're solo that so that yeah that's a great living and then what what what would you estimate you could do at your fund three exit four exit yeah what a target right now it's north of five x damn alright so five x so that's a hundred for hundred what i can't i don't hundred twenty five million twenty five million you pay you pay back the twenty five first so now there's a hundred million of profit of the hundred twenty hundred million of profit you keep twenty percent that's twenty million so you might make twenty million at the sort of in the in the termination of the fund basically after after ten years that's sounds amazing right it it's it's amazing it's amazing i also find i mean when once you get into this world typically you'll see that's that's the core fund and the core fund is like your v one like that's the first thing you do to build a track record into like get in the game where people start to make a lot of money and make a lot of money in the short term is what i mentioned doing sp or even buying secondary one of the things that i've been doing a lot of the last the year year and a half is one of the things that holds people back from starting a startup up is the fact that they're ill and sitting on a lot of equity at their last startup up and so there are a lot of vcs that are exploring like what would it mean to buy shares from you know employees to then put them in business and so that's another way to think about it as well i think there's different playbook that you can layer on top of each other once the fund is in a good place then you can get more creative with sp or you can get more creative with even buying employee shares and companies that still have a lot of upside you know and so i think that becomes pretty creative as well let's switch gears to ideas so what spaces is what ideas do you have that you think people should be building in or you you you see interesting stuff so give me a sense of like you can either be a specific idea or it could be kind of like a trend you're noticing what do you got yeah it's interesting i tend to look at what are the smartest people that i know thinking about are working on i consistently see a lot of people are moving into crypto and into climate change i think these are two areas that you can't really ignore and i'm also seeing people leave very well paying jobs that have a lot of equity to work on things like climate change and so i do think that there are trends that are starting to bubble up that have maybe been either underserved by venture underfunded rather and so it does seem like there's a lot of things that are happening especially during covid i feel like during the pandemic people started re examining what matters like you take away the fancy office you take away all the perks you take away the ability to you know physically see your team and so i'm i'm seeing a lot of people that are leaving to work on things that they actually care about which is really interesting not to say that won't make a lot of money but to say that there are new opportunities and new types of companies that people truly wanna build and so that's been something that i've been thinking about so what what's example some client yeah was gonna ask about climate change and climate tech that's interesting give us a a cool idea and climate change that you've seen or you have yeah i mean today it feels like it's very early days i'm i'm seeing a lot of companies that are thinking about carbon offset or they're coming up with ways for corporations to be think more think in more sustainable ways i will say i mean a lot of the stuff that's directly related to climate change i probably don't see because i do a lot of workplace in future of work stuff i think a lot i think we're gonna see more specialized firms that are focused on climate change or they're are focused on frontier tech the cool thing about being a solo capitalist and having more of a perspective on like this is my area of expertise and this is where i can add value means that when i get together for dinners with other new solo capitalists or new funds they're specialized in their own way and so i do like spending time with experts on climate change and frontier tech like there's so much happening in space right now do i have the you know the experience or the network to really dig in not at this time but i love hanging out with people that working on space tech and what in in the work life portfolio so future of work what's what's an idea that that or a company that you're excited about that that's it's not already like well known and it hasn't hasn't had that breakout moment where raises this huge round so people in tech find out or everybody's already using it like slack or something like that what what's an example of a company that you think is super cool good give us one from your portfolio yeah absolutely one thing that's not obvious about the work life portfolios i do spend a lot of time in education and res skill i think this is a really important thing where even from your earliest days like kids are brought up being asked by their parents like what do you wanna be when you grow up and i think this is sort of a question that historically you know kids have been taught to do very normal jobs they're like well you should be a teacher or you should be a doc or you should do like these very traditional things there was an interesting study that i read when i was just thinking about work life building out the first version of the pitch deck where kids today there you know kids would rather be youtubers then they would be astronauts like maybe that change that that changes today because we're now going to space and so space is very cool again but what's interesting there is there isn't really education that aligns to that you know i think the textbook education is you memorize something you take the test and you forget about it like my recall from elementary school middle school high school is zero like i studied for a test as soon as the test was done i didn't think about that topic again but i am seeing new platforms and new styles of learning that kids are being taught based on the things they're interested in i invested in a company called primer which is essentially online at education i think we're thinking about like do we call at homeschooling i think homeschooling tends to have a fairly negative or you know neutral connotation depending on who you are but the concept is can you know eight to ten kids get together and can they learn video game design can they learn about you know certain types of writing can they build their own websites like what are these tangible skills that are aligned to the hobbies and interests of kids that they develop at a very young age and can they build their own network or community of other like minded kids so they actually care about school when i so i'd be thinking about this whole school thing it's both john and i have invested in a little bit of it sean teaches a course i've taught of course of four i've been thinking about school for a little while and i've actually completely changed my opinion it was one thing now it's the total opposite the whole like i think that the the everyone talks about education broken edge it's broken this and that i think only part of it is the for the top thirty universities i think are doing just wonderful stuff and here's why sean if well you you're different i didn't go to like a fancy school b if you could have graduated if you had to graduate with a quarter of a million dollars in debt but you could have gone to harvard would you i actually think i would to be honest why think i want it i completely agree it's one hundred percent worth it it's one hundred percent worth it if you can get into a top twenty university and you have to get going into a ton of debt it is one hundred percent worth it in that if that's the case it ain't broken i think it's doing a great if someone's willing to like go into a crippling amount of debt and go ahead why like why okay okay great why do you think it's worth it because you learned so much from those great harvard classes no right that's not the reason why you don't the school is not about learning cool so you get the stamp that says i went to harvard yeah so now every time a guy likes sam or me looks at you was said oh harvard okay yeah you perk up a little bit and then the second thing is you get the network right so you're gonna bump into you know the next wink boss and zuckerberg and whoever else that's on on your campus at that moment those are the two reasons the stamp and the network yes the problem is that their schools like belmont university where i went that cost fifty thousand dollars a year and then they're like look fuck belmont i mean who no one knows what belmont is they it provides zero value like there's no point if you go to belmont you should quit right now yeah and basically the only way that we should solve education i think is by letting those businesses just go out of business and die and then keeping the top twenties the top twenty ish i agree with that i mean the liberal arts schools are hurting a lot i think the forty fifty sixty thousand dollar a year school i mean i i grew in ohio and there's no shortage of like liberal arts colleges that have a beautiful campus but you know is it the type of school that someone's going to pull your resume and put it at the top of the pile or in the era today we have ai that's scanning resumes and they're scanning specifically for harvard stanford mit like those are the people that have the one up and so i i do agree with that yeah that's nice well i think i think but you're saying you know you you you changed your pin did you think that before that harvard was a waste of money did you really think was like good to a hunting like you know like yeah you can go chatter you for like break eight eight dollars of late fees you know yada yada yeah i mean you want that romantic crap to to be true but it's not my wife went to an ivy league school i was such a redneck when she said she went to penn i was like oh is that where that football rap coach went that sucks and then she was like no it's part of the ivy league i'm like i really don't know what that means i think i've heard about that and like a harry potter book but and like then i met her friends and i was like well this is totally worth it one hundred percent worth it when i was aware that i actually i have a bit of fo i i very rarely have fo but going back to my crazy psychotic calendar the virtual dinner on wednesdays is with friends that are vcs that all went to stanford gs together and so i'm the only non gs beer on this virtual dinner we used to meet and have dinner in person we weren't always internet friends but what's interesting there is once you start having dinner and getting to know them you're like shit i could have been like hanging out with you for two years all the time like grabbing lunch hanging out whiteboard boarding coming up with startup up ideas like the whole concept to me makes a ton of sense because once you start start spending time with friends that do have an ivy league education you just feel a little bit jealous because they got to hang out a lot more when i was at college so i went to duke which is kind of like more like more like what you're talking about sam and i remember after my halfway through my freshman year or something i called my dad and i was like hey you know before i came here we had been thinking like should i go to a state school like i go university of texas or should i go to duke and like you know i'm not doing so great here like i kind of like you know like a b minus student type of thing and i was like i'm i'm at first i wasn't trying now i'm trying but i'm still be minded student even after trying because like the kids here just like everyone here is like the smartest kid from their their high school so like they're they're all smarter than me and then they all already work harder than me i'm just like learning to work hard and so i told him i like you know i feel like if i stay here i'm just gonna kinda be like in the middle of the pack and i started telling i was like he's like well why do you like you know i i think you're being hard on yourself and i like no like my friend to is like super genius and like during the summers you know i go home and play and nba a 2k and he goes and drives like an you know an ambulance on the war front in palestine and like helps people and like my other friend over here he's doing this other thing and so i was trying to say that as like you know i'm not i'm one of them i think you're wasting a lot of money sending me here like this i'm not gonna be a winner here i'm gonna be like an average or below average as far as the rest of the kids here and he goes you're not there for grades you're there because to is your friend next to you and that guy's your friend next to you and that guy's your your friend over there you being friends with these people you're not even gonna realize it but your whole what you think is normal is actually gonna be excellent because it's just gonna seem totally excellent we'll seem average to you just by spending four years with these people so don't stress yourself out about the grades don't don't worry about all that you're doing the right thing just by being by being like five feet away from all these other people and i was like man that was like you know that's like dad hits you with some wisdom and i didn't even really realize it at the time i was just like okay i guess i'm staying here but now when i look back i'm like wow that was actually like kind of a stroke of genius and on his part and and so to bring it all back whenever i hear people talk about like the future of education education is broken i'm like maybe like it's broken in the sense of like i think people shouldn't pay for this stuff unless it is of this caliber but also i think that a lot of people approaching this this this market they think like well i just need to make like a better mouse trap or like i need to just like make it so you can learn more important stuff and i'm like i don't think that's actually the right way to go about this the miss mistake man the class we're still teaching you know these classes and the we're teaching it from textbooks how boring i'm gonna teach it i'm gonna teach better subjects in a better way and the problem is that people don't choose to go to college for the classes they don't choose to go to college for the information they go because they want the stamp and they want the social experience and then they want you know the parents need that as an insurance policy and you know so college does many things and then they solve only the information problem but they don't have a credential they don't have the social experience they don't have it the other five reasons that people actually go to these places so that that ends up being a big problem great what i'm looking at your portfolio right now of all these what do you think is gonna be the biggest hit right now hop the most obvious this is a really special company you know when they initially raised their first run of funding i believe they had around four employees i caught up with johnny last week in there at eight hundred and eight hundred and twenty so i invested a little over a year ago they're now valued at five point six five b and so they're really building a a really disruptive platform i say platform because initially they started out as a way for companies and festivals and publications to host conferences online they've since then moved into streaming they're moving into all forms of virtual collaboration and even hybrid collaboration where hop is being used at in person events as well and so i feel like this is a company that has un untapped upside they're making a lot of acquisitions you know they i have only been around for two years you know johnny was initially based in london he built hop because he had an illness where he had a compromised immune system he couldn't go to networking events he was you know in his early ish mid twenties and so he built the technology because he needed it and so like the team itself is in it for the right reasons and moving really quickly and so that's one that i'm super excited about you know but there are a couple of other ones where their stealth they don't have a website yet they're building quietly behind the scenes and i'm very excited for those companies to come out as well but you can't talk about those right now i can't talk about those ones what do they do how do they do two two themes that i'm really excited about the first one is disrupting venture capital and that's controversial because i myself of of venture capitalists but a number of startups that i've invested in are non d ways for people to raise money like i think venture has a very they look for very specific things typically it's more it's more software focused business models you know typically it's founders that are in an ecosystem where there are a lot of vcs i think that's changing but it's gonna take some time for that to change what's interesting to see is i was a first money an investor in a company called pipe pipe is non d diluted capital for software companies or now any companies with recurring revenue that one that that that one's gonna make you a bundle how how do you put up as the first money in pipe does that happen yeah i i'm excited to tell you the story because it's it's it's a atypical what happened was i was in la for my birthday so my birthday is september twelfth i heard about pipe on september tenth something like that i was at drinks with friends or like you gotta meet this guy harry horse he's very charismatic he's building something in saas like you gotta meet this guy and so i had called a few investors i was emailing people i'm like hey you know how do i get an intro to harry wasn't happening wasn't happening and then finally on my birthday i tracked on his phone number i text him i'm like hey here's like here's who i am here's what i do i'm in la and it's my birthday can i come to your office and so he you know we ended up meeting in the middle he's like okay you don't have to come to our office we can go to soho house and so we we caught up on my birthday i was super excited about what he's building i committed on the spot i you know started the process to wire the money from the parking lot like i'm sitting there on my birthday late to my own birthday laptop out doing all the things to get ready to wire money for this company because i knew if i waited it wasn't gonna happen you know founders are meeting so many angel investors and so many vcs through the process where sometimes i'll talk to founders and they're like yeah room we're so excited to work with you two days later they're like oh i completely forgot because it's been a whirlwind and so i wanted to make sure that that email was sent that we started the process and that i was gonna keep bothering harry like frankly we didn't have a relationship so i was bugging the shit out of him so i could invest in the company but okay so let's take it even a step further this even though i've i lived in silicon valley in san francisco for eight years and i felt like i was you and i probably shared so many friends technically i guess i was kinda part of it but not really but it'll like this guy harry how did he even create this much hype for you to chase him down like that there were a couple things so harry it's a disruptive model i will say that you know we've seen new ways for founders to raise money but oftentimes there's mis because you'll have ways for founders to raise money but it's on unfavorable terms no to like less sophisticated investors and so for harry he the the initial concept was enough where where investors like oh we need to catch up with him and like learn what's going on here it sounds like you were the first money in but people were telling you you gotta be with this guy who people why were they even saying that if they weren't already investors in the company what was he you know who who are these people that were giving you this great tip that you were like okay i gotta i gotta meet this guy and if if they hadn't already invested because that makes sense when somebody's invested they say hey i i just invested i think it's great but you should check it out but that wasn't the case here that wasn't the case there were are a lot of people that were trying to meet pipe you know i think a lot of ways when you're fundraising for a company i always encourage founders like many of them get to garden in the beginning they're like no one cares like no one cares until everyone cares and that's how it always works like the last twelve hours of fundraising is always ms because once people once someone hears that someone else is investing or someone else is interested just all snowball into like a huge amount of text and phone calls and emails and so in harry's case he's he's a brilliant fundraiser i mean if you look at the cap table he's raised from the ceo or you know one of the cofounder of every major saas company and so i give him a lot of credit for that from the earliest days you know he had a conversation with david sacks so you know david has started and and and david was very interested in for the same reason that i was interested for me as a first money an investor pipe is a great resource where when a company hits a certain inflection point and they're thinking about raising more money it's great for me it's great for the founders it's great for anyone that's been involved from the very beginning to introduce options of non d diluted financing it's more upside for us it's better for employees like all the way around i'm like i wanna spend time with this company and ultimately get work life companies to use it when it makes sense and so that was part of it as well so then it was basically so did did he know david i believe harry meant someone on david's team that's la based i just like a cold email or something something like that so that that's kind of interesting so like i mean it's just like it's a huge game of telephone and it's fascinating it this is just a fascinating thing of what what is pipe value at two or three billion dollars north of two now yeah okay so they don't have that much revenue like everyone it's it's just crazy that you could say that they're probably gonna grow into that and become way bigger but they created all this off of like a really good story at very strategically getting in the right years and i think that's incredibly fascinating and really really cool it also just speaks to the amount of capital that's available in the ecosystem right now i think oftentimes these valuations are getting out of hand because there's so much demand from the last round or there is so much money where investors would rather pay a high pay a premium to have exposure to the company and to share in some of that upside than waiting until you know a traditional milestone or metric or moment in time where historically they would have fund raised like to give you context and i and i don't say this as someone who wants to brag by any means but when i invested in a pipe it was at like a nine post and now they're worth north of two billion and so that's not saying like wow you're a world class investor like you changed this company but it's to say that when you have a big vision you have a good team that's building it when you have a a founder that's exceptional at fundraising like investors will come to you and they'll come to you even before you know the next financing round because they wanna get in so how much gonna make off that one i'm holding it's hard to say i'm holding just what's your stake worth i don't know if i'm allowed to say that am i i'm not sure what the models are i don't know if i'm allowed to say that what's that invested in what i believe i invested a hundred and fifty k and then i'm continuing to follow on well so like there's a lot of math here that involves dilution but you just told us the you you just told us the you know the variables that we could do the math but we don't do public math if you recall we don't do public don't it for if we you can just say you're telling you the number but we don't do public math we shouldn't we you you could do like all this evaluation might be like well if it's worth two billion and you invested at ten ten million dollars i mean like in a hundred and twenty five grand like you know you could do the math it's it's a whole lot i just don't know you know don't don't get it on so on paper it has returned the fund and so i i have returned the fund in the the first year and a half which is an interesting point i i think a lot of investors are very quick to scale the fund size like they wanna go out and raise a hundred million dollar fund for fund one to raise a little bit north of ten million and to return it in the first year and a half like that's a pretty safe bet and one where i didn't over extend myself in a way where it could impact my reputation something that i do encourage people like start with where you are today and find ways to keep building concentration over time do sp buy second do whatever it takes to like hit that annual number that you need to make to be happy don't necessarily over extend yourself and go out and try to raise a hundred million dollar fund i wouldn't have been able to raise a hundred million dollar fund but i i have been able to return it on paper very quickly right oh congratulations and so should wrap it up a little bit over over time and we saw her calendar so we know we're we're eating into like a peloton class or like a church meeting or or email processing maybe we don't know exactly which one but texting triage exactly yeah i i'm only i'm behind on my text alright so we won't we won't keep you any longer alright so so brian and kim where should people find you and they should go let's is is the podcast live yet can they go subscribe on the yeah subscribe to the