How to pitch when you're at the inception stage | TechCrunch Disrupt 2025

So, we're going to talk about how to

raise your first check and how to pitch

at inception. Wesley, I understand you

were the first check into some very very

seinal companies. Tell me what it is

about them that you found interesting. I

think it's Gusto, Flexport, Robin Hood,

and what's the

>> and Plaid. Yeah, I was very lucky. Um,

you know, it's uh it's very fascinating.

I was uh very very fortunate to have

started my career out as one of the

first uh four founding partners of uh GV

or Google Ventures and uh I helped them

build out their seed program back when

they were doing seed and you know back

then we were just looking for amazing

founders you know folks that reminded me

of Larry and Sergey who had a vision for

the world that it would change if

whatever they did came true and so that

was one of the things we were looking

for back then you have no information

most of gusto most of plaid most of flex

were all ideas on the back of a napkin

so that made it really really fun to

just sort of banter with him and truly

understand how they thought the world

would change. And so, you know, when

they when they described this vision of

of Gusto where everybody could have $4

payroll, that was amazing because the

payroll experience was terrible at that

point. And so, you know, I said like

let's let's find a way to work together

and we wound up writing them their first

check uh through Google. So, uh very

fortunate to sort of meet these amazing

folks with great visions.

>> Charles, you invested preede. So, this

is this is exactly what you do. What do

you look for in founders?

>> You know, about twothirds of the people

we back are first-time founders, which

feels very kind of against the current

moment where I think everyone's obsessed

with repeat founders, but most of the

people we back, firsttime founders,

pre-product market fit, pre-launch, as

we say at at work, pre- everything. So

Wesley's one of the few people I know

who has the courage to continue to back

people at the earliest stage. But I'm

usually looking for a couple things. A

founder who knows something special and

unique about the problem they're

solving. um also someone who has zero to

one startup experience. So it works a

lot better if you spent time at a

startup with 25 or fewer people before

you do zero to one. And then there's got

to be a market where it feels like

there's some inflection point happening.

>> I I'm going to interrupt here because I

actually like what he said. You have to

be able to really truly understand zero

to one. Most people say, "Oh, I'm I'm

I'm I got this grand vision at the end,

but at the beginning they're like, I

don't know how to get started. I need an

investor's help." And that's that's a

challenge, right? don't ever want to be

investing at least I don't invest in

founders that come and say I need my

investor's help to run my business.

Yeah.

>> And and that zero to one stage is really

important. So what Charles said really

about somebody that has a clear vision

and a clear ability to articulate what

it takes to get from zero to one and

then for me from one to 100 or 100 to a

billion. That's where like you I really

lean in and say like look you've got

this figured out. Let's how can the

money turbocharge your business? I mean,

we've learned the hard way, as in we've

lost money, by backing people who've had

amazing careers at really large

organizations where they have all of

this ability to navigate politics and to

figure out systems and get their hands

on resources. Then you put them in a

room with no management, no

instructions, no PRD, no OKRs, and a

whiteboard and say you figure it out.

And it's paralyzing for them because all

of the things that made them successful

in their really fancy big job don't

apply to zero to one.

>> And then there's another challenge which

I've noticed uh when investing very

early on is that folks from larger

companies, there's a lot of

infrastructure that's solved that for

them. like all these folks that you know

come to me and say like hey I worked at

Google for for 10 20 years or I was

there like working and managing this

product they sort of assume that there's

distribution right Google has incredible

distribution that was solved in the

early days and I I got to play a very

fantastic role learning how to solve

distribution but like you ask them about

hey how will you get a 100 users 100,000

users 10,000 users or even a million

users and then you know the

infrastructure just isn't there and so

you know I think that zero to one stage

as you pointed out is a very very

complicated thing and it doesn't work

well for people who haven't had the

ability to go build that or learn it

from the start.

>> What do you do you say to a Google

employee of or meta employee who want to

start a startup given everything you

just said? Like how can they get there?

>> I think it takes and maybe this is like

a little meta like no pun intended. It

takes a certain amount of self-awareness

to say I can appreciate all of the

resources I had at Meta. I had the

brand. I had other people around. I had

an IT department when my laptop broke. I

had access to all of this distribution.

And to be able to say, I recognize to

Wesley's point, I'm not going to have

all of these advantages. And I think you

also have to care. I've met I've met a

lot of people who are doing very well at

big companies like, well, I want to do a

startup, but like I kind of want to make

75% of what I make as an L whatever at

this big company. And I and I'm like, do

you want comfort or do you want an

adventure? Because starting a company

from scratch is like not comfortable. I

don't want to display it is not easy. It

is not comfortable, but it's an

adventure. So, usually I'm trying to

find out, does this person want to go on

an adventure and anyone who's been on

adventure, adventures are not up and to

the right. Adventures are up and down

and sometimes the down is really hard.

And I've frankly met a lot of people at

big companies where at the end of the

meeting I'm like, I think you would be

happier if you stayed where you were.

The resources you have available to you

at your company are pretty significant

and I don't know that the idea that

you're talking about is worth walking

away from all that. Wesley, would you

bet with on somebody who's coming out of

Google or or Meta or one of the large

companies?

>> So, so there the answer is yes. And

there's actually one exception uh on on

on on generally you know what what

Charles said which is you know sometimes

people are too comfortable at large

companies. There's a they've worked on

something where they have a unique

insight about why the thing is

completely broken. Like that's actually

what what what I look for is what unique

insight do we have? I was very very

lucky to have backed Canva at the series

A uh when 111 people said no. You know,

nobody knew what they were building and

back then the product looked like a

print shop, right? Like you would go use

it to make a set of business cards or

you'd go use it to make a brochure for

something and then you not use it again.

Their churn was very very high. But both

Cliff and Mel totally understood what

the unique insight was about why tools

the incumbents were all broken and they

basically said look you know people

under 35 like they grew up with a phone

in their hands. It's image first.

there's a camera built into the phone.

The tools that are available to people,

the things that we were trained on like

Office or like Photoshop, they're like

text first, right? Like it's called

Microsoft Word for heaven's sake. So

they basically said like we needed to

build something that is design and image

first. That piece needs to happen. And

it wasn't until social media and they

had the integration, the Canva Pro where

they turned on monetization and where

people started using it constantly for

both social media and their homework

because they nailed the distribution and

they got people using it. But that

unique insight was so clear in their

head that nobody else understood. Most

investors said, "There's no way you're

going to like ever disrupt Microsoft

Office. There's no way you're gonna

disrupt disrupt these tools I was

trained on for 35 years." And what they

didn't understand was the next

generation was growing up going, I want

design. I don't want to spend four years

in yearbook class learning how to use

Adobe tools so I can go into them. So

that's the piece I look for. You've

worked on something with such a unique

insight. And that unique insight says, I

this is broken. This my company will

never solve it. There's too much going

in the way. It's the same reason I was

very fortunate to be on the team that

helped to buy YouTube for Google. I

looked I was on the I was on the ads

team at that point and we looked at it

and that you know Google had its own

tool but Google was building it for

pleasing all of the people that were

like running media companies. They had

DRM. It was such a frictionful tool to

use. That's so much friction. And then

comes YouTube where they had unique

insight where you can upload any videos

cat videos, piano videos, whatever you

want and there was no friction in doing

it. And Google said like oh that's the

right approach and that's why you know

that that deal went through. So, we look

for the unique insight and this is the

piece that I I care deeply about is like

what is it that's broken that you feel

that your company or that you're so

motivated to go fix that you have this

unique insight into. Can I

>> add one thing? Um about half of the

founders in our portfolio are are

spinning out of a company where to

Wely's point they encounter some

friction. Sometimes it's a project that

they really wanted to build and

management didn't give them the

resources and so we look for people

who've kind of banged into that problem

and oftentimes those people are not

seuite people they're individual

contributors they're product managers

they're engineers they're not leadership

so we're always on the hunt for people

who are actually in the trenches

building stuff who are encountering

problems and saying wow I think this

problem is bigger than my boss and my

boss's boss realized and this is

something we could take out of our

company and maybe build it for the

industry

What do you look for founders where

there's no product and no traction?

>> That's like 90%.

>> Yeah. 90% is like everything at the

conception stage. Like client had no

product, no traction.

>> But do they have do they have like an

MVP? Do they have something? Because

it's so easy to build these things now

to

>> Well, it's easy. It's easy now, but it

wasn't easy 10 years ago. And that's

that's perfectly fine. I'd rather have a

person that understands clearly what the

insight is and what they're doing is

going to change the world than a person

who has an MVP that's still trying to

discover a bunch of things and figure

out why why they're going to have

product market fit.

>> I think it's maybe useful to

contextualize like what Wesley and I do

every day.

We're going to meet thousands of

companies a year, each of us, and we're

going to meet most of them for I don't

know about you, 30 minutes for a first

meeting. And usually in the first seven

to 10 meeting minutes, I kind of know

does this p is this person interesting?

Do they have insights on this problem

that feel novel? And I I hope I can

leave you all with this idea of like

novelty. Sometimes people present me

ideas and I'm like, okay, I'm a

generalist. I knew nothing about this

idea when the meeting started. You tell

me the problem. My brain starts going

through, well, how would I solve this

problem as a generalist? If I don't

learn anything new that wasn't kind of

obvious that a smart person could reason

their way through, I go, "One of two

things is probably true. Either this

person hasn't studied the problem deeply

enough to understand an interesting

angle that sounds different than the

other 10 people who pitched me on it or

this is a trivial problem to solve and

there's no big business to be built

here."

>> Yeah. The the one caveat I'd add to that

that I care deeply about and this is a

very big first principles thinking for

our firm. Everyone at my firm needs to

argue this when a when they want to go

bring a deal through, which is how is

your company going to be monopoly,

right? Like, you know, it's a dirty word

for people say antitrust and everything

else, but like monopolies are great,

especially if you're a natural monopoly

or a government granted monopoly. Some

of my best companies that I've been very

fortunate to back at the seed stage were

biotech companies, but it's a natural

monop I mean, it's a government granted

monopoly. You have a patent on the drug.

If the drug makes it through clinical

trial, you get whatever 17 years minus

the time it takes you to get the drug

through clinical trial is a government

granted monopoly. It's why drug prices

are so expensive because you control the

pricing. There's no other competitor.

And so it's, you know, Google became a

sort of a natural monopoly, right? Like

it's just the product that it built. But

most people don't understand that

monopoly matters because if you have 40

competitors and you you're one of 40

legal AI companies, for example,

suddenly the pricing goes down to zero.

You don't control the pricing or the

distribution.

>> And I'm sympathetic. I think sometimes

as an investor, you will see 40 of the

same idea and the founder knows of three

people doing the same thing. So there's

this weird asymmetry of information

where the founders like well we have

some competitors there's people out

there doing it and he was as an investor

like I've seen 10 times as many people

doing this as you think are doing it.

>> So do would you bet on somebody who is

one of the 20 companies that going after

the same use case. We're seeing a lot of

this in AI happening right now.

>> I I haven't succeeded on this but you

know I might be a an idiot.

>> It's really hard. We've certainly gone I

mean you'll hear VCs say oh it's a red

ocean you know it's a crowded

competitive environment where lots of

people have lost money. We've certainly

gone into some of those markets and been

successful. I think you have to

understand well what is it that this

company understands that those other

companies don't. And oftentimes the

answer is nothing. They all actually

think the same thing. And I have a

really hard time investing if I'm like

everybody believes the same thing

because it means everybody's going to go

after the same distribution channels

with the same business model. all of

their marketing copy is going to feel

the same. But sometimes you do find a

really disruptive interesting company in

a space that people have kind of either

written off or assumed was solved. But

it's really hard. I wouldn't wish that

life on anybody in this room.

>> So by not betting on one of the 10

companies going after whatever is the

use case, I couple weeks ago I saw I

think it was three or four companies

that pitched me on customer research. It

was the exact same use case. Like all

the series A investors, they all went up

for the use case because it's probably

very promising.

But if you don't bet on it, does it mean

that you think there's only going to be

one category winner? I mean,

theoretically, there could be several,

right?

>> There could also be zero.

And I think this is the thing people

forget. Everyone's like, well, we're

gonna Some categories don't produce a

winner either because competition drives

everything down to zero. It's a race to

the bottom. Sometimes there's no winner

because it turns out the unit economics

for the business don't work for anyone.

Like you just there can be no winner. I

mean I still remember I mean history

repeats itself a lot right during the

pandemic when everybody thought that

we'd be stuck indoors forever and I mean

there were a hundred different

conferencing companies you know remember

all the online conferencing companies

all the conferences are going to move

indoors this this this thing where we're

all together in the same room was never

going to happen again and all of them

didn't do well right there was no winner

and then I still remember on every block

in New York City there was a 50-minute

grocery delivery company we're full of

these people of ebikes and people were

raising at these outrageous valuations

there's one company that pitched to me

going I don't even remember the name and

it's like oh are raising at a four bill

in valuation for 15-minute grocery

delivery. And I kind of look out at my

door going like, well, there's like 10

of them on my block, right, with like

little warehouses. All of them are like

kind of like gone. So, sometimes there

are no winners in in folks where there's

a lot of hype and no monopoly and

intense competition because the not the

you just can't make money off of it.

Also, we're not like perfect

forecasters. If you had told me that

Zoom would have an integrated meeting

recording function like literally built

into the product with a button you could

push and that you would have Otter,

Fireflies, Granola and a bunch of AOMA I

could go on that there would be a robust

ecosystem of meeting recording tools

when the leading meeting platform had a

literally like a big red button there. I

would have said there's no way you can

overcome the embedded distribution that

Zoom has with the product. they are the

meeting platform for most people and it

turns out that there's a lot of other

people who want more functionality or

different things and there are so many

of those kind I don't know every time I

join a meeting I'm like oh this is a new

meeting assistant I've never seen this

one before there's so many of them and

that to me like would have defied

initial logic that there were meaningful

businesses to be built there

>> so Granola and Otter and and Firefly are

examples of

>> the the the same company I mean the same

use case they're just going after it in

a different way. So maybe maybe founders

could try a different flavor of whatever

is the

>> tech dour and we have lots of tech dour

right now. Um what what are you looking

like is there a specific industry that

you're looking for right now like is

what is I know I know biotech is very

interesting for you but in in software

AI what are you looking for?

>> Oh man I mean like as a generalist I

look for you know founders of unique

ideas. I like still remember doing

Canva. I remember meeting them in Sydney

and it was one of those things where I

wasn't looking for a productivity

software tool. In fact, I was told to

run away from the space. There were

hundreds of people doing slide slides

share slides for sales like Thoxen type

things and I sat there going like I

don't need another productivity company.

But one of my founders I had invest I

was very lucky to have been on the board

and invested said these guys are

exceptional thinkers just take the

effing meeting. So I I did I was like

blown away by their like unique vision,

their insight and like what they were

building and just like really like saw

their hundred-year plan, right? Like

this is something I look that the best

founders have hundred-y year plans and

really truly understand why they wanted

to go build something where the world is

so fundamentally different in five

years, 10 years, 100 years. Larry and

Sergey who I had the good fortune of

working on working with very early on. I

joined Google uh when there were

hundreds of people there like they had a

hundred-year plan, right? their vision

was just so so so so just crystal clear

but also so grand and so that's that's

that's that's what I look for as

founders with that and it could be in

any sector whether it's life sciences a

drug for cancer it could be a knee

replacement drug that there somebody's

working on like these things just sort

of pop out of nowhere and so I always

keep my mind open for what that

hundred-year plan you know thing that

changes the world in five or 10 years uh

is so there's there's nothing I really

sit there and go like oh I won't do I'll

always take an interesting pitch when

and again there needs to be some signal

from somebody usually that I know that

tells me this founder has such a unique

insight on this like you should take the

meeting that you know I always keep an

open mind.

>> Charles, are you also a generalist?

>> I'm a generalist too and I this is my

word I don't actually know what I'm

going to like until I get into a

meeting. People say what should I send

you? I'm like to Wesley's point like

send me great people. So at the end of

the day I'm not really an expert on any

technology area. I'm trying to find

people who have expert expertise and I

usually find that people who have

expertise that expertise shows up fairly

early on in a meeting or conversation.

It could be their domain expertise. It

could be somebody know about the

problem. It could be somebody that they

teach me. And so I'm always I go into

these meetings thinking I'm going to

learn something from this founder. And

if what I learn is profound, I'm

probably going to invest. And if I

don't, it's just going to go in the back

of my brain as a new piece of knowledge

I can use for the next meeting. And and

many times the the founder pitches you a

company that completely changes when

they succeed, right? I still remember

Robin Hood. The guys came in like with

they actually brought cats with them,

right? Because the name of the company

was called Cash Cats when I wrote the

check in the Robin Hood and the and they

were pitching a hedge fund algorithmic

trading platform that would give like

people data advantages for hedge funds.

That was the pitch. But like they were

so freaking smart and eventually the the

idea they couldn't make money selling

the data, but they could I mean they

couldn't make money just like doing a

pure data play. And they their data

wasn't like specific enough. So they had

to create Robin Hood to generate that

data that they could do the forward

order flow. But that was an insight that

I didn't understand at that point or

that I would understand that they'd be

able to pivot. So there's a lot of luck

in this business too. But they were just

clearly very smart with a with a very

unique thinking on a space and you know

I was fortunate enough to be able to to

say yes at that early stage like the

there's just a little bit of a spark and

an interesting insight on something

where I sat there going like huh what if

they're right.

>> How important is pedigree having gone to

one of the top schools?

>> Zero for me. zero like Canva has no

pedigree. That was actually one of the

things the founders of Canva don't have

a pedigree that anyone from Silicon

Valley indexed on, right? They were Mel

was a yearbook teacher in high school.

Cliff was who his co-founder was a was a

history teacher. They went they came

from Perth. They didn't work at Google

or Facebook Meta. They didn't come from

like 20 startups. The the previous

company that they they created called

Fusion Books, which was a a Canva for

yearbooks didn't do well, right? Like

that company was just kind of sputtering

along. And like, you know, a lot of

people in Silicon Valley wrote them off.

In fact, I was told by a lot of people,

oh, don't waste your time with them.

They don't have the pedigree. They're

from Australia. They're from Sydney.

They haven't worked at a major tech

company. They haven't seen what Silicon

Valley is like. They don't understand

the ambition, the drive, and the

behaviors that people in San Francisco

or in Mountain View or wherever in S

were doing. They're just not the right

fit for us. And here they are as one of

the most valuable companies in the world

because they created their own culture.

And they truly understood how to build

something differently than anyone in the

world was pursuing. And the other thing

about Silicon Valley is back then people

were forcing people you got to make

money, you got to do enterprise sales.

This is your go to market motion. And

the go to market motion they had was all

bottoms up from people like in high

school or in college doing homework. It

was like such a unique motion and such a

unique insight that they w up succeeding

because everybody was building a tool

for you to use at Techrunch or to use at

Goldman Sachs or IBM and they built a

tool that says we're just going to make

it easy for anyone that wants to go do

their homework to go do it really well.

So that was a that was a that that was

one of those examples and it's in fact

the example where a a lot of people were

misled because they were looking for

pedigree.

>> Charles, what about you?

>> We don't focus on it at our firm. I

think pedigree is a intellectual

shortcut which sometimes leads you to

good decisions but oftentimes leads you

astray. And um I think as we talked

about earlier sometimes working at

Google or Meta is a good thing.

Sometimes it's not helpful to what

you're building. But I think the reason

investors focus on pedigree is it's one

really fast way to cut through the

noise. If you've got thousands of

pitches in your inbox, it's an easy

sort, but like easy doesn't always mean

good. And so I always I always get

nervous if someone leads with their

pedigree. It's like we're to Google and

I'm like okay, but what are you

building? And how does like the fact

that you worked at Google or went to

San, how does that like map at all to

giving you an advantage or an edge in

understanding this problem and many of

our most successful portfolio founders

don't have the pedigree markers that

people looked for. They to Wesley's

point, they weren't repeat um founders

who'd had huge exits. They didn't go to

a very narrow set of schools. They

didn't work at the very narrow set of

companies that investors focus on. But

there's a set of firms who are like very

pedigree obsessed. And I think part of

it's because it's a lot easier to deploy

large amounts of capital if you reduce

everything to a pedigree algorithm.

>> The the thing the challenge with

pedigree also is it's not only

misleading um sometimes or lazy uh it's

it's it's it's actually forces a set of

baggage.

>> Yeah.

>> Right. Like oh all the people in this

pedigree are doing this. I need to go do

this. Right. Like the people who have

pedigree followed a specific path for a

reason. And if you think about startups,

some of the best founders are there to

destroy whatever the status quo is. And

then do something completely brand new,

undoable before, and sort of figure out,

you know, something that that that that

people with pedigree or people that are

in status quo or people that are

following the herds would never even

think of doing because there's such a

high rate of failure or it's something

that could cause shame or it's something

that like, you know, you just like

hasn't been done before. And that's you

know the thing that's those are the

companies where where I've been

fortunate enough to see these outlier uh

these outlier outcomes having been in

this business for so long is that the

you know the people of pedigree

sometimes have such a unique insight or

thinking in the world because they

weren't like held back by all this

baggage that everybody else that you

know sort of has this pedigree feels

like they have to do and there's the

other flip side with that people with

the pedigree are sometimes really afraid

to take the right risk or fail they'll

take the safe path I'll target

enterprise software instead of bottoms

up approach right that you know the

easier path path sometimes is not the

best path because it, you know, doesn't

lead to these outlier outcomes.

>> I do think though if I were in the shoes

of the people in the audience, I'd like,

well then how come everybody I read

about, not in Techrunch but in like

other publications, it seems like they

all went to Stanford or Harvard and all

worked at Google and I think it's

because pedigree gives you unfair access

to investors. I think that's the one

thing you get with pedigree. You

probably worked with, went to school

with, or have a social connection to an

investor if you come from one of these

pedigreed institutions, which means your

ability to bubble to the top of

somebody's inbox or priority queue is

much greater. It doesn't necessarily

mean your ideas better, but that access

does impact who gets meeting sometimes

and ultimately who gets considered.

>> So, it sounds like you're open to lots

of different things. Yeah,

>> there are lots and lots of founders. How

do you pick who you take a meeting with?

Where do you where do you meet them?

>> Some of this goes back to what Wesley

said. If someone whose judgment I trust

tells me I should meet somebody and can

provide me with the metadata as to why I

should meet them, I'll probably take the

meeting. Unless I have an investment in

a competing category or it's a category

where I've made investments and

concluded I will never invest again.

There's only like one or two areas that

have I've been burned so consistently

that it's hard to take a meeting. And

then I reserve some portion of my day

for cold email, which are people who I

don't know, who don't come warmly

recommended through our network. The bar

for those is just much higher. Like the

story has to be more clear, the hook has

to be better. But that would be true if

you were in a sales job and you were

trying to reach out to any any potential

customer. the quality of your

communication has to be better when the

relationship is weaker. But I don't

know. I I don't assume that everybody

who I need to meet knows me or knows

somebody who knows me. And so every

every month I'm trying to figure out

what's the right balance between people

that I know that are coming in warmly

referred and people who seem really

qualified but are outside of my network.

>> Paulie, do you open your email?

>> Uh no, I I I can't. There's not enough

time hours in the day. No, the the

answer is simple. Somebody Charles calls

me up and says, "I got this amazing

company. I know the founder well and as

he calls it, I like that word, the

metadata, right? Like this is like the

unique insight or the or the or the

understanding or the learnings that this

founder has been doing, he's an amazing

person. You guys should take the meeting

and I could care less if he's working on

like something I've been burned in or

something else. Like usually when a

person tells me that, I'll take the

meeting and it's worth my time. And even

if I don't invest, I've been so

fortunate enough to meet somebody

interesting, fascinating that teaches me

something I didn't know before where I

sat there going like, "Oh, that's a

really interesting insight. Let me think

about that some more." And then the

other thing is I never like taking

meetings where I can't be helpful to the

person, right? If there's an

introduction I can do, a new insight I

can give them. I work spent I spent 15

years at Google, 10 of them building the

ad system and you know working on on

products like YouTube or like Google

voice or I started Google Analytics.

There's some product insight I want to

be helpful to the person with, right?

Like last thing I'm going to do is like

sit through a meeting with somebody and

just sort of like okay thank you for for

coming. I have nothing to tell you.

Right? And so like because of that like

the the and the time constraints that

that that we have there's only you know

maybe eight to 10 hours in the day that

we can take meetings with. Usually it

has to come from somebody that says this

is the founder. I have experience for

them. Here's the metadata. Right? Like

the worst thing that can happen is

somebody comes up in the conference

going I've never met you but like I'm

desperate to get my idea in front of

you. Hey like can you meet with me that

you know I've never I don't think I've

ever invested in a company that's come

all cold. And maybe that's a maybe I'm

an idiot for that. I don't know.

>> In about five minutes we'll start taking

questions from the audience. you can

start lining up.

So if you don't open your email,

how does a founder who has no

connection, no pedigree, they may be

living in Australia, that was the

situation obviously, right? How can they

reach you? How can they get in front of

you?

>> They found a connection. I mean, let's

be honest, I did not know Cliff and Mel,

but they like there was a there was a

wonderful connection through a founder I

had invested in and they knew it, and

that was very serendipitous. But had

that not happened, I probably would

never not have invested, right? Because

I wouldn't have found them. And I have

to be open to the possibility that there

is some serendipity that occurs from

being at a conference or or meeting

somebody randomly. But I've I've not in

my 15 16 years of doing this, I've not

found somebody either the bars too high

or my defenses are too high or something

else of that sort where I've I've been

able to find that a good use of time.

>> What about you, Charles?

>> We've done a few things that are cold.

Um they've actually been pretty good. I

will say though um we get a lot of

referrals from founders that we met and

passed on and to me that's still a

relationship. Like I have founders that

we've passed on where I've gone to

Wesley's point tried to make

introductions for them to be helpful.

We've had other people have been like

hey I know you didn't invest but the

experience of meeting you was like

pretty pleasant. you listened to my

pitch, you appear to be paying attention

and you actually closed the loop and

told me why you weren't investing which

sadly in our business I think puts you

probably in the top cile and I value

those introductions too because part of

I know there's a whole thing about

introductions. Part of the nice thing

about getting an introduction from

someone who knows what I do is I know

that they know what I do. They're not

going to send me a series D uh rare

earths company that's raising $500

million at five billion because that's

not what we do at Precursor. And I get

those emails in my inbox sometimes and

I'm like this person has no context

whatsoever on what I'm trying to achieve

with my firm. Whereas when people I've

met before either founders in our

portfolio and sometimes people just say

hey I met you at a conference I actually

today I met somebody here who I met

through a friend last year at disrupt

and they're like hey my friend used this

last year can I give you a quick

10-minute update on what's happening

with the business. I was happy to meet

with the person

>> and they're doing quite well. So I don't

know I think cold should be like the

last resort if you've exhausted like

every attempt you can to find someone

who's peripherally uh connected to the

investor. What about accelerators? What

do you think about

you? Do you go to YC? Do you go to

>> I find YC demo day to be overwhelming.

>> I used to be good at it, right? Like you

have to admit, you know, Gusto was a YC

company, which I I did before YC. I did

Flexport before YC. So, I've had a good

um track record many many years ago when

I understood that there were less

companies and the signal was much

higher. Today, it's it's not something

I'm good at. though.

>> What about if if you're not in YC, there

are lots of other accelerators. Are that

is that worth founders time?

>> Um, the one I like right now uh that has

very high signal and I think every

founder I met there is just wicked smart

as Neo. Yeah, I love I love what Ali's

built. So Ali I'm I'm a huge fan.

>> Yes, he

>> I like Entrepreneur First, too. I don't

know if you spent much time with that. I

mean, no, I haven't. No,

>> we've in the last year we've invested in

a ton of what I would describe as like

frustrated and disgruntled European

founders who were trying to build in

Europe

>> and move to San Francisco out of

frustration and a desire to be closer to

capital and for us entrepreneur first

has been a good path to finding those

folks.

>> Yeah, I learned something new.

>> Yeah. Last question before we go to

questions.

Do founders have to be very young

because it seems to be that's what's in

vogue now. They lots of them dropped out

of you know name your brand name school

>> high school on some we had a few high

school guys. Yeah

>> like would you would you take a chance

on somebody who is you know had a 10

year 20 year career.

>> I mean yeah

>> I mean I mean Cliff and Mel were you

know had had a couple you know startups

or things underneath their belt. I mean

you genius comes from everyone and

everywhere. So that's that's that's

that's the piece that I I I think is you

just have to be very thoughtful about

like when I was at GV we b we backed

early on Tony Fidella Nest and Tony was

the inventor of the iPhone and the Apple

iPod right and you know he you know was

just so thoughtful in building what I

thought was a crazy idea thermostat and

then he but his vision was like it's not

just a thermostat there's a lot of home

things that we can do and then Google

wound up buying it right Jamie Simmonoff

who I was fortunate enough to back at

ring very early on he was he had like

five startups under his belt and he just

like the drive was still there. So it,

you know, genius comes from everywhere

and you know, I don't care about age.

>> The median age in our portfolio at

founding is 29 years old. So we're

mostly finding people who've worked and

had some startup exp. You know, with the

younger founders, I worry more about EQ

than IQ. And these are people who are

going to build organizations. They're

going to lead people. And you know,

there are some very evolved, self-aware

18 to 22 year olds. I think about where

I was in my own life at that age. I

think I've come a long way. And so I

worry a lot about EQ leadership and

management for those really really young

founding teams.

>> We when we when we evaluate a company or

a founder specifically, there's two

things we really care about. One, does a

person have raw intellectual horsepower?

Because there is so much that changes

that you have to be able to react. You

have to analyze. You have to critically

think and you have to have the ability

to sort of buck the trend and not do

what everybody else is doing, right?

Because if you're if you're copying

everybody, then you're a consensus

company and you're not really sort of

doing something that's different or that

allows you to pull ahead of the pack.

The other piece that we look for that I

don't know how many other firms look for

is wisdom, right? You know, that was the

piece where, you know, when I was at

Google, that was pushed on you, Wes, you

got to be both smart and wise.

>> And you know, some folks that haven't

had the experience, the scar tissue, the

understanding that it's not worthy of

chasing, you know, what you heard at a

bar from eight of your friends or what

you saw on Instagram when everybody's

thinking, "Oh, my friend did that. Like,

I should be doing that, too." that

wisdom is something that we look for and

it typically is in older founders or

people that had a couple sort of like

scar tissue things under their belt and

so that's a piece that we highly value

too and we look for that you know I

don't I can't say that for the rest of

the my colleagues in this business but

the wisdom is something that we really

look for because when it comes down to

it they're making judgments there's a

lot of stakes there's employees that

they have to go manage there's customers

there's there's investors and they have

to have the wisdom to understand what

the right decision is at that point and

the judgment is really important

>> right let's go um the Q&A. Go ahead.

>> Um hi, thanks. Um so say um you found a

first believer who's a very close

friend, a good friend and you are about

to you know get a safe arrangement and

um based on your professional experience

what's the maximum equity um

pre-traction even prevper

can possibly give up in the preede round

to non-institutional friend and family

without deterring future institutional

rounds

>> and should I you know should one

actually fund raise

enough money to to cover like 12 to 18

month runway or just bare minimum to get

the MP launched. Thank you.

I think it's pretty rare that we see

friends and family plus preede exceeding

15%.

>> 15

>> as like a r and there's no hard and fast

but just think about this way. You're

going to do a preede. you're gonna do a

seed, you're gonna do an A, maybe a B,

there still has to be enough ownership

with the founders after all of those

layers of investment.

>> Okay?

>> And so if if if you sell too much in the

preede, you don't have enough left to

have a company where the founders are

motivated and there's enough for

investors to buy. I don't know.

>> Try not to dilute yourself a preede.

Yeah. I mean, like, if you need the

money, you need the money, but the best

founders bootstrap and figure out ways

to like get what they need to get done

without having to raise a lot of

capital.

>> I see. Thank you. Thank you.

>> Go ahead over there.

>> Thank you. Thank you so much for your

insight today. Uh I'm in the process of

incorporating a company and preparing

this uh pitch for fundraising and so on

and what you mentioned about this

articulating zero to one that pitch um

could you give more concrete example of

that and what does that involve? Is that

does that about how to get the revenue

within certain period of time or what's

like outstanding example that you had?

Look the the most important thing is why

is somebody going to buy your product

and what will they pay for it? Is it

highly valuable for them or not? Like

this this is something that like you

know Paul Graham used to drill in

everybody at Y why comir go build

something that people need right? It's

not that it's not don't go build

something that you need or that only you

need or that like you you you think some

people need but don't really know like

the piece is what are you building that

people need and why are they going to

pay you for it. So if you're preparing

that pitch, you're getting from zero to

one, you got to go walk through the

customer journey. This is the this is

the this is the pain point that I'm

solving, why it's insanely valuable,

right? So that's the piece that you

should think about through of like then

people really need what you're building.

Have some evidence, have some have you

know you can build prototypes very

easily now with with many of the tools

that are that were are available now

that I didn't have like 5 10 years ago.

And so that that piece is really

important. What do you what convinces

you and what can you what what evidence

do you have that what you're doing will

eventually get the product market fit

and that somebody even one customer

might pay you for?

>> I think one other thing I would just

keep in mind is most preede or early

stage companies there's one or two

really hard things that have to be true

and sometimes people solve all of the

easy things and never solve the hard

things. So if distribution is the hard

thing in your business think really hard

about how do I actually prove my

distribution hypothesis is correct. If

there's a technical barrier, how do I

make progress on the technical barrier?

But like make sure you're actually

working on with that first capital, the

hard part, not the easy part.

>> Yeah, there's so many people that come

are very at the inception stage going

like, "Oh, I got all this like interest

or traction without any marketing." And

I kind of sit there going like, "Yeah,

but once you get to the point where like

that stops on the marketing, like what

are you going to do that's unique or

that you don't have to go pay Google,

Facebook or like you know, a bunch of

sales people to go do, right?" So that

piece is the hard part. And a lot of

people go like, well, I can get a press

article or I can get a hacker news and

get all these pe all those interest.

That doesn't solve the hard piece that a

lot of sort of folks do. So that's the

piece that you want to think through

carefully. What is the hard thing and

what am I doing to solve it or what

insight that I have? Otherwise, you

know, you you don't want to be like the

other 50 people that show up, you know,

sort of knock down Charles door going

like, "Oh, I have this company in legal,

but I haven't figured out, you know, the

hard pieces, which is distribution or or

monopoly or whatever the the situation

is for that business you're in."

>> Go ahead.

>> Thank you very much for your

presentation. It was very helpful, very

good insights. Um, as a first time

founder who's experienced and coming

from the Midwest and starting an

aerospace manufacturing company,

what should I look for in venture

capital firms before I select one?

>> You know, it's less about the firm and

more about the partner. I like you got

to you got to look once once they're on

the cap table, you can't get them off,

right? It's the same thing once I've

like decided to invest in a founder like

it's to death do you part or to IPO do

you part right like you're you're kind

of stuck with that person for sometimes

up to 10 years. So if if the person's

kind of like not where you don't trust

the per if you don't have trust in the

person you know it's a dead relationship

or it's going to be a baggage for you

from the start. So that's the piece you

need to figure out. You know there are

really great partners at really crappy

firms. There are really you know crappy

partners at really great firms. So you

need to be thoughtful about who you want

to work with. And the other piece that

you know a lot of I'm sorry something.

The other piece that's really important

that a lot of people today in in in in

um in in you know that are starting

companies don't understand is that you

want to find somebody that has

longevity. Yes.

>> Right. This is the piece like there are

all these firms like some of these large

venture capital firms have like 40 to

100 different like junior partners. The

average tenure I ran this like

experiment I mean this analysis on

Facebook. average tenure of somebody

that's starting in venture capital that

calls himself a partner but like doesn't

have a track record like lasts about

three years, right? Charles has been

around decades.

>> You want to pick somebody that's going

to be around in this business. I still

remember doing techn like disrupt like

12 years ago. I was telling this to

Mariana like all the people that were on

stage with me or that I started out at

my like at at Google Ventures, they're

no longer in this business, right? So go

pick somebody that's going to be around

for a while, especially when you're

starting early on. Last thing you want

is a person where like you have money

from, he leaves the firm or he doesn't

do venture capital anymore because he

got pushed out and he has a bad

portfolio that you're left like dealing

with this random cap table or investor

on your thing and you're like

desperately trying to sell it at some

later stage because you don't want this

guy with you or like on your cap table.

That's the piece I would sort of look

for as well.

>> And the other thing is just like what do

you want? Do you want somebody who has

aerospace expertise who can guide you on

that? Do you want someone who's got

company building? I at the end of every

meeting I have with the founder I ask

him what are you looking for an investor

beyond money? And there's actually no

right answer. It's not a trick question.

I generally want to know what is this

person looking for? Are they looking for

partnership? Are they looking for

mentorship? Are they looking for

support? Are they looking for customer

intros? It's probably useful for you to

say these are the things I would like to

get from a venture capital and

capitalist and like kind of stack rank

them. Thank you.

>> Go ahead.

>> Okay. Hi, my name is Julian. Uh I came

up because Wesley said he's not going to

look at the cold emails.

Um I flew from Korea two weeks ago to

try breaking the pendanty that you said.

So, I'm going to hackathons and events

and uh I've been on uh research for 5

years and I'm a dietitian running my

private counseling for five years and I

found some problems that I want to solve

and uh it's about real-time food

decision- making helping using smart

glasses and I've done this uh hackathon

with a few of people here and uh the

question I have too is I think building

relationship is important between um

co-founders and also between VC. But if

I don't have any connections of founders

who can attach to you two or other VCs

that I know in San Francisco, would

there be any way that I can keep uh up

with my updates? And the second thing is

um if I have co-founders um uh last time

I had hard time with uh sharing stack uh

sharing stocks because of the percentage

and it's a little delicate problem from

the beginning because if we start to do

things uh you need to talk about it but

I'm uh unsure how to solve this problem

so I need a bit of help with this. Thank

you. So unless you can answer this

question in 30 seconds. Um, sorry.

>> Yeah, this is this is a complicated this

is a complicated.

>> It's very complicated. I wanted to

>> Yeah, I spend about 10,000.

>> All I all I can say is look,

Charles and I both left, you know, a

very brand name firm to go start our own

firm, right? We put our names on the

door and like it is a lot of work. I

mean, and so we have all this amazing

empathy for every founder. like I have

to go sometimes decide on like how much

toilet paper I have to go buy for my

office because that's what it takes to

go build this and as a founder you have

to go do those things and then so much

more right because you have a product

you have to build you have product

market fit so this is not an easy

journey so like you know our our like

having been through some of that piece

myself even though it's slightly

different like we have so much empathy

for what people are going through and so

to your question just like I how I have

to go and find other VCs how I have to

raise money like it is all your network

and it is one of those things where you

can't sort of say, "Well, I can't do it,

so I'm just going to cold email and I

hope I get a good response." The best

founders will hustle and knock down

every brick wall. So, if you're not from

here, that's a bigger pro challenge for

you to to overcome. But the best

founders overcome that challenge. They

show up, they like come to San

Francisco, they get on airplanes, they

maybe go spend some time here, they live

in a hacker house. I've seen all types

of hustle here. And so, like, you know,

to say that it's a challenge that may

may not be easily overcomeable, like

I've I've witnessed it and it is

possible. So that's the, you know,

that's that's sort of the upside and the

excitement that you have ahead of you in

terms of solving this journey.

>> Okay. Well, we're out of time,

unfortunately.

>> Thank you. Thank you both.

[Applause]