Latest / The Learning Corner by Precursor / Episode #25: Startup Media Hype Circles, 11x Tech Crunch Article, Market Arbitrage in Venture

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Episode #25: Startup Media Hype Circles, 11x Tech Crunch Article, Market Arbitrage in Venture · The Learning Corner by Precursor

• 0:00
  If you're working on this company because you enjoy it and because you like it and because
• 0:03
  it's personally meaningful to you, by all means, keep going.
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  If that isn't the case, we should talk about other ways for you to spend your time because
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  time is the one thing as a founder you just don't get back, and spending a bunch of time on
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  the business you're not interested in that isn't gonna have a big outcome just isn't a
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  good use of your time, period.
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  It's the week of March 24.
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  Welcome to the Learning Corner, Precursor Ventures podcast.
• 0:30
  Welcome to the learning's corner by Precursor.
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  I'm Mia Farnam, and I'm going by our GPA and managing partner, Charles Hudson, where we will
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  be talking through the articles and Goodreads that caught our team's attention over the past
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  week.
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  Topic number one in a really thoughtful LinkedIn post from this past week, GP of
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  Flybridge, Jesse Middleton, reflects on how the venture ecosystem often values optics over
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  nuance, especially when it comes to fun or flashy startup announcements, reminds us that
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  success often comes with years of brine and quiet resilience.
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  What specifically resonated with me is his example of founders feeling like they have to
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  hold out for this giant valuation or sale.
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  Perhaps it is a better long term decision for their team, investors, and even themselves to
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  sell earlier or just consider less grand landings.
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  Jesse mentioned he always wants his founders to shoot for massive success, but oftentimes, the
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  more tangible wins and landings can be overlooked because everyone is trying to keep
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  up with, I would say, almost imaginary benchmarks.
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  Wanted to get your take on how to balance those conversations and expectations with founders.
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  I think the venture model in some ways is, like, clear and cruel at the same time.
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  The goal is to fund companies you think are gonna have massive outcomes, and I don't know
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  very many VCs who regularly back companies where the expectation is that there's gonna be
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  a small outcome.
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  But once you put your money in and you start working with the team, you learn about the
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  people running the company, you learn about the state of the market.
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  And sometimes the only conclusion you can reach is this isn't gonna be a huge outcome.
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  Then the question's like, well, what do we do with this company?
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  And I think oftentimes it depends on what the founders want.
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  Sometimes the founders are like, hey.
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  We've had this in our portfolio.
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  I like running this profitable version of this company.
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  I'm gonna continue to operate it, and I will either find a way to get your money back
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  through the profits we generate, or I'm gonna keep running this because I think there's
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  something on the horizon that's gonna change, that's gonna make the business more valuable in
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  the future than it's perceived to be today.
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  And I always tell founders at some point, I'm like, look.
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  You don't owe me anything.
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  Usually, somewhere around year five or six, if the business hasn't broken out and the
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  founder's still working on it, often go to them and say, if you're working on this company
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  because you enjoy it and because you like it and because it's personally meaningful to you,
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  by all means, keep going.
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  If that isn't the case, we should talk about other ways for you to spend your time because
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  time is the one thing as a founder you just don't get back, and spending a bunch of time on
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  the business you're not interested in that isn't gonna have a big outcome just isn't a
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  good use of your time, period.
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  So I spent a lot of time talking to funders about that, and you have to be careful about
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  being mindful of when you have permission as an investor to even initiate that conversation.
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  So that's one.
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  And then I think on the other side, I see a lot of people who are like, oh, you know, like, why
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  are people making these blog posts and articles about acqui hires?
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  Starting something is really hard.
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  And while not every venture, exit tickets announced in the press, made money for founders
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  or investors, I've just become very sympathetic over time to the desire for founders to frame
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  the last few years, in some cases, maybe even decade of work in a positive light and have the
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  opportunity to be lauded and, you know, congratulated by the community for landing the
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  plane.
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  Because as me, as you know, most of the companies we invest in, there's nothing that
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  comes back when they don't work out.
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  So as I tell founders, like, getting anything back puts you in pretty rare air.
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  Now I do think it's sometimes a little strange when I see people doing the victory lap tour
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  for an acquihire that return 5¢ on a dollar, but, like, it's not for me to judge.
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  I think the same thing is true of fund announcements.
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  You know, I've seen people in our business who announce oversubscribed funds because they cut
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  the target in half.
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  And I'm just sort of like, I don't know.
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  For some people, being able to say our fund was oversubscribed is really important.
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  And, again, I feel like that's not for me to judge.
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  In this environment, raising any money is super difficult.
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  And if that's something people wanna celebrate, whether it was exactly what they planned to
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  raise or not, I think it's tough.
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  But I think from the outside looking in, I'm sympathetic because you read some of these
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  announcements.
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  Like, wow.
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  That company must have sold for a billion dollars with the amount of people that were
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  thanked in the LinkedIn post, and then you realize people didn't even get their money
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  back.
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  Do you feel like those conversations talking about softer landing are easier to maybe groach
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  when it's earlier on in the startup journey when maybe they don't have maybe the public
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  commenting?
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  I think the hardest situations are ones where the founder has a big public profile and the
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  business simply isn't working.
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  And then when I say big public profile, that can be on x, on LinkedIn, on whatever social
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  media platforms of choice.
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  If they've tried to sort of build a personal brand or a following around being successful,
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  sometimes I've seen it in our portfolio, that makes these smaller acquisitions or soft
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  landings harder because the person's built themselves up in the public as someone, and
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  they have to reconcile that with the outcome of their company.
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  So there's that.
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  I think the other thing is it's very hard to have these conversations if you're not sure
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  that the founder himself or herself is also at the same point of realization about the
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  businesses you are as an investor.
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  Sometimes I'll explicitly ask people like, hey.
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  I'm not sure we're on the venture scale.
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  Are you open to talking about alternative paths?
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  And I think right now, we have, in the venture business, a bunch of unicorns that were minted
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  in '20 and '20 and 2021, which may or may not ever be worth their last round's valuations.
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  In some cases, those companies aren't worth anything.
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  In some cases, they're probably worth something but less than they were valued.
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  And, like, how do you navigate those conversations?
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  Because, you know, there are VCs whose careers are tied to those high rounds and those high
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  marks.
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  There are founders whose egos and just, unfortunately, maybe some cases, even self
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  worth is tied to those marks.
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  And in many cases, they no longer reflect reality.
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  So that's why I think this unwinding takes so long.
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  It's also just the nature of venture and startup ecosystem.
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  I feel like so much of it is just sharing publicly via content.
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  That's just something that's inherently part of our ecosystem, which is wonderful because you
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  get to see what other people are doing, but so much of it is a storytelling exercise.
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  The best piece of advice is to just not keep blinders on, but just have the wherewithal to
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  just focus on what you're doing.
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  And I've even talked to founders who've been like, oh my god.
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  One of our competitors acquired.
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  What does that mean?
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  Because in venture, most private deals, the amount never gets announced.
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  The structure never gets announced.
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  I'm like, well, that company that you thought was, like, your big bad competitor, they just
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  got acqui hired.
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  Yes.
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  I know what the announcement said.
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  Yes.
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  I know what the company blog post said.
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  I have some information about the actual transaction that you should know about.
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  And I think that's the other thing that's hard when you're outside looking in.
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  There's almost never numbers mentioned unless they're very big.
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  And so the readers left to wonder, was this like a teeny tiny acquihire?
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  And I've seen some things that sounded like acqui hires, and you peel back the coverage
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  like, oh, no.
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  That was actually a meaningful transaction on the part of the buyer.
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  Some investors commented on Jesse's post saying that a call to more transparency is needed
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  across all points along the startup and venture chain to essentially make it easier founders
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  and their investors to call it, like, the right moments.
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  I'd agree with this, but also would say it takes participation by everyone, your founders,
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  your investors, your board member, LPs, journalists even.
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  Where do you think the greatest tension might live?
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  I think we go through these moments where you get these, like, really great postmortem posts
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  from people.
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  And those, you know, I feel like once or twice a quarter, somebody will write one that goes
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  viral, and everyone's like, wow.
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  That sounds painful for you.
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  I just think there's more attention and energy and interest in things on the way up than on
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  the way down.
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  And I think practically speaking, it means that, like, people are much more excited about
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  reading about good news.
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  Look.
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  I think salacious bad news, you know, corporate espionage or CEO misbehavior, tech tabloid
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  stuff.
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  But just generally, hey.
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  This company raised a bunch of money and isn't that successful through no misdeeds of its own,
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  just misestimated the market.
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  Those stories take a lot of nuance.
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  We have a handful of journalists who I think are good at writing those pieces, but we don't
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  have as much of that.
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  And I really do think as an investor, if you try to have this conversation prematurely, and
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  by prematurely, mean, you have kinda, like, permission to have it with the founder.
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  I've done that before mistakenly a few times, and it's really hurtful to founders, I find,
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  when they're just like, oh, so you don't believe in my company.
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  I'm like, you're right.
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  I probably should have prepped you for this conversation rather than springing it on you.
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  But, yeah, you're right.
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  Like, I don't.
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  When I say don't believe in it, I mean, it is not going to have the scale of outcome that
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  will have a material return to my fund, which doesn't mean I won't help you find a landing
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  spot, but it means that in my mind, I've concluded that this isn't gonna be one of the
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  10 or 15% of companies that really matters to us from a fund return standpoint.
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  And I think when you can have that conversation with people, which is like, look.
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  I'm gonna help you land the plane and find a home mostly out of respect for the sacrifices
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  and energy you've put into building this and less so because I think going from point one x
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  to point two two x return is gonna make a difference.
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  You do it out of respect for the level of effort and commitment people have put into
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  building the business.
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  Next topic.
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  In a piece from TechCrunch written by Dominic Midori Davis and Marina Temkin, it's reported
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  that once taught AI sales automation startup, eleven x, backed by a larger fund, falsely
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  claimed major customers and traction throughout its lifetime.
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  11x offers an AI driven tool designed to automate sales tasks.
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  The company is part of this broader wave of startups merging in the fast growing category
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  of AI SDRs.
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  Founded in 2020, 11x was once a starlet, claiming to have gotten close to 10,000,000 in
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  ARR only two years after inception and raising 75,000,000 apparently in one month.
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  The article shared comments from ex employees and customers, which shed light into the usual
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  red flags of a house of cards startup, creative revenue forecasting, toxic workplace anecdotes,
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  false customer endorsements, and more.
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  One of the things that was shared in the article was that 11x was raising money and
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  sharing traction off of contracted ARR, which is not a new word.
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  You would expect that this means signed, sealed, and delivered contracts between
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  customers and 11x.
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  11x apparently made it difficult to exit pilots and instead asked customers to enter into one
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  year contracts with a clause to terminate if need be.
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  So as these customers churn, instead of just adjusting the revenue, 11x apparently rolled
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  these original contracted numbers as ARR numbers.
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  So in the article, it said that investors, board members were aware of how this was
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  accounted.
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  With all my standard disclaimers, I'm not an investor in 11x.
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  I've never looked at investing in the company.
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  I don't know anything about the inner workings.
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  I will say this.
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  I've had a bunch of my friends who are in the sales business say that these AISTR tools make
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  big promises and don't deliver.
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  And I'm like, well, how do I separate your self serving desire for that to be true as a sales
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  leader and the fact that you are also probably the person who's close to this.
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  So I think rather than talk about the specifics of 11x because I don't have any information
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  beyond what I I know from talking to folks, I do think it's important to remember that
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  whenever investors create a metric or a measurement, there's this, like, short window
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  of time where it's useful, and then it starts to get game.
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  Like, I was joking with someone over the weekend, Tanya and Cheek.
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  I was like, well, now that AI investors are focused on revenue per FTE, how long before
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  startups start making people contractors?
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  So I think startup founders are smart people.
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  And I think once they realize that there is a metric or a data point that investors care
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  about, many of them are smart.
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  When I read the article, was like, well, I get it.
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  Contracted ARR is a widely understood term, and contracted ARR is not really supposed to be at
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  risk.
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  It's supposed to be money that is to be collected but hasn't been recognized.
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  That's how I've always thought about it.
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  Like, oh, we've got a three year deal.
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  It's a million and a half contracted, but we're only gonna recognize it one thirty sixth of a
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  time.
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  So there's the equivalent of a bookings backlog, or it's some way to talk about the
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  difference between what you're recognizing and what's under contract.
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  I think technically speaking, it's not wrong to book a one year deal with a three month out as
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  a one year deal because you wouldn't presumably book the deal if you didn't think that the
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  customer was gonna keep the contract.
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  The part I find puzzling, and I don't know if LFNX actually did this, the notion that once
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  somebody exercises their break clause and decides not to continue, that should be backed
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  out.
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  Unless you have some weirdly punitive thing where you can break the contract, but you're
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  still on the hook for the whole thing, then you can book the whole thing.
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  Then I don't even know what the break clause means.
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  And again, so many investors were like, we hate pilots.
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  We hate trials because it means we're gonna do work to have to evaluate.
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  So in some ways, if you recast the trial as a one year contract with the ninety day out, you
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  kinda get the benefits of looking on the surface like a one year deal and not having to
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  have the questions about pilots and churn for at least ninety days.
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  And if you're growing really quickly and adding a ton of customers, you're always gonna have a
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  bunch of new cohorts of customers who don't yet know if the product works for them.
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  And even if they conclude that it doesn't, they're gonna stick with you for a while.
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  Again, I'm very hesitant to, like, suggest that this was an intentional deception, but I will
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  say we've created a set of incentives in venture that push people towards annual
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  contracts with big numbers on them.
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  And when you have that set of incentives, there will be companies that say, I want my company
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  to be presented in the best light to investors, which means this subset of numbers need to look
• 13:01
  really strong for me to get investor attention.
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  The other perfect storm is when you have companies that are growing that quick, there's
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  pressure to maybe assume or trust that the investors' understanding of what a word means
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  and the founder's intention are tightly aligned.
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  And so I don't work at Andreessen Horowitz.
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  I don't work at Benchmark.
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  I don't know what was presented to them.
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  I also know that in competitive hot deals, sometimes you put your trust in the fact that
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  contracted ARR has a really specific meaning, and if that's what they're telling you, that
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  they understand the convention.
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  So I don't know.
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  I think it's a good reminder that in this AI world, things can change quickly.
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  And I will also just say this, the logos thing, I've certainly seen companies, sometimes out of
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  laziness, forget to update their website and take down customers who are no longer
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  customers.
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  I've also seen people strategically leave up customers.
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  I mean, I read through that article.
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  It sounded like all of the customers, end quote, had at some point tried the software,
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  but either hadn't bought it or had churned.
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  Prob their logos probably shoulda came down.
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  Again, I don't know why that didn't happen.
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  But I think AI to me feels very 2020.
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  Companies are growing quickly.
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  People have serious FOMO about missing out, which means you have to do high quality
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  diligence in a short period of time, and people not having a shared understanding of what
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  numbers or words mean makes that really hard.
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  When I was reading the article, I felt like it was a story more of, like, an early stage
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  startup who was scrappy and wanting to win customers.
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  And things were falling through the cracks, but not because it was intentional.
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  It was because they were growing so quickly, which obviously can replicate in a higher
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  growth scenario.
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  It reminded me of Memorial Health, like one health startup recently just sold for
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  30,000,000 in a fire sale, but was valued at one point at $430,000,000.
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  Similar thing, like, had pilots going on and then folded in that revenue into a contracted
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  ARR basis even when those folks had fallen off.
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  Again, I'm not part of either team that was brought in here, but it's funny.
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  I read the article and felt like I can imagine how everything led to where it was today.
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  On the other side of the spectrum, I know that there are founders in our own portfolio who
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  actually are much more conservative that I would sometimes argue that they should be even
• 15:00
  more bullish on their forecasts and forward looking road maps.
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  Obviously, there's a massive difference between predicted numbers and claiming true revenue.
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  How do we draw the line though between founder optimism and an actual misrepresentation?
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  Look.
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  Most VCs assume that even your conservative forecast is wildly optimistic.
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  So if what you're presenting is truly conservative, it's still gonna get discounted
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  by 25%.
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  I find there are certain subpopulations of founders, women and people of color in
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  particular, who tend to be, I think, quite intellectually honest in what they think the
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  business will do.
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  But they're presenting against people whose visions of where the line between optimism and
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  likely is just set at a different standard.
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  So often, they'll be, like, present the numbers that suggest what will happen if everything
• 15:43
  goes right because whatever you put in that forecast is gonna get discounted back by
• 15:47
  investors.
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  So if you're adding in a discount on top of that by being overly conservative, you're
• 15:53
  actually not helping yourself.
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  I just think it's really hard to go to investment community and be like, this company
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  gave me a forecast.
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  It requires no discount.
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  I believe that they're gonna hit this plan.
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  Your partners would be like, how long have you been doing this?
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  No.
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  I need to ask that.
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  Of course, they're being optimistic.
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  If you don't realize that, then you haven't figured out where the optimism is baked into
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  this plan.
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  But it can be anything from, like, they expect CAC to go down over time or expect LTV to go
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  there's always something you can fiddle with.
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  And I think getting people to understand, I think this is still the big divide, is founders
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  put all this time into putting information together, and VCs have 100 x, a thousand x, the
• 16:28
  pattern recognition reps.
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  So they take all the information you give them, and then they munch it up themselves and try to
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  figure out what does this all mean, which is why I think a bunch of firms I've talked to
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  just ask for the raw data.
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  They're like, just give us the raw cohort data.
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  Give us the raw financials.
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  We know how we wanna torture this data to get it to tell us the answer we want, and we'd
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  rather do it our way than have you present it in a way where we have to then also go back and
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  double check and understand the assumptions.
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  And I would say for founders who are just in the beginnings of their journeys, you can have
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  open conversations about that with investors without discounting success that you feel for
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  your company.
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  I think having those more transparent conversations and showing different scenarios
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  of growth, like, that's what we're gonna be doing on the back end anyways.
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  So preparing yourself for those types of conversations is important because they're
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  inevitably going to come up, especially against your example, if they're asking for the raw
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  data, it's gonna be sliced and diced in seven different ways.
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  So being prepared and armed to have those conversations is actually the best thing that
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  you could possibly do.
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  Our last topic is a great, really well researched essay from Jordan Snell's Substack
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  titled Venture Capitalizing on Arbitrage Windows.
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  Ultimately, the ideal scenario of leveraging an arbitrage market window is that you can come in
• 17:37
  on deals at great prices with misunderstood but strong founders without as much competition and
• 17:43
  more room to breathe and grow while everyone else eventually catches you years later.
• 17:47
  Jordan mentioned a common thread of GPs from these funds, quote, have been thinking deeper
• 17:51
  and more granularly about a very specific founder profile than most any other investor.
• 17:57
  The thesis is that this founder profile translates across markets and sectors enough to
• 18:02
  move in and out of them without first selection.
• 18:05
  So wanted to get your perspective.
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  I thought it was a really well written article.
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  And as someone who's raised a number of funds as a general, I get all of this pushback from
• 18:12
  LPs.
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  So we like specialist funds.
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  And I always go, but for how long?
• 18:15
  And I didn't have the language that this post has because I would tell people, like, hey.
• 18:19
  If I think about Emergence, one of the firms I really admire, they had a window of time where
• 18:24
  most people were like, we don't understand this, like, renting software biz this SaaS
• 18:28
  before predictable revenue.
• 18:29
  Before we had this whole business, there was a period of time where most people were I like
• 18:33
  the old enterprise sales model where people buy software and pay for maintenance contracts.
• 18:38
  They understood a business model transformation that others didn't, and they had an amazing
• 18:43
  run.
• 18:43
  And now every multistage, big fund, and small fund does SaaS.
• 18:48
  So being a SaaS specialist is sort of a weird decision.
• 18:51
  I think about when Forerunner really figured out some of these early consumer products and
• 18:57
  consumer companies.
• 18:58
  Everyone else is like, well, that's not Venture.
• 18:59
  Well, Venture doesn't do that.
• 19:00
  Turns out Venture does that now.
• 19:02
  Maybe does it less than they used to, but there was a moment of time where a lot of other firms
• 19:04
  said, oh, we wanna be in on this too.
• 19:06
  And the ability to sort of be first in line and see the best founders the earliest and pay
• 19:12
  reasonable prices is good.
• 19:13
  I think the people who've got this right is Union Square.
• 19:16
  They didn't stick with social networks and network effects as a theory forever.
• 19:20
  There was a period of time where they understood it in a way that everyone else
• 19:24
  didn't.
• 19:25
  They didn't get every great company on that thesis.
• 19:27
  But at one point, they're kind of like, okay.
• 19:28
  We're moving on to the next thing.
• 19:29
  And I think this is the thing I've always been perplexed by when LPs tell me they like
• 19:33
  specialists.
• 19:33
  I'm like, me too, but probably for one or two funds.
• 19:36
  And there's a few funds that have been able to perfect this very rare dance, which is to be
• 19:40
  specialists and then rotate into a new specialty when your original specialty is no
• 19:45
  longer unique.
• 19:47
  I think it's very, hard to do.
• 19:49
  And then I think about people like my friend Nabil Hyatt who's been able to become a
• 19:54
  specialist in really specific areas for interesting windows of time, but has also had
• 19:59
  wisdom to say the time to exploit that is over.
• 20:02
  And this is funny.
• 20:03
  I was thinking, that's how I got into African fintech.
• 20:05
  Was I started meeting these companies in YC where I was like, oh, no one takes these
• 20:08
  companies seriously.
• 20:09
  No one thinks you can build anything big on the continent.
• 20:11
  And then there's a period of time where everyone was like, oh, I want the Stripe for x
• 20:15
  y z company.
• 20:15
  I want the coin.
• 20:16
  And then I was like, oh, well, this is now a consensus good idea, so it's probably not the
• 20:20
  domain of a specialist.
• 20:22
  And I think the irony is that by being a generalist, you get to be specialist in a bunch
• 20:25
  of other weird new areas.
• 20:27
  And if I think about some of our best companies, they were profoundly not consensus
• 20:32
  when we invested, whether it's Carrot.
• 20:34
  Everyone's like fertility benefit.
• 20:36
  I mean, you had Progyny as a public company.
• 20:37
  Also, It's not really a thing.
• 20:39
  The employer's not gonna be in that.
• 20:40
  If I think about pair eyewear, people are like Warby's all like, bobby baby.
• 20:44
  There's a theme here.
• 20:45
  These were all very out of favor venture categories.
• 20:48
  And I was just like, well, we made money on them because we found these awesome people
• 20:51
  before everybody else thought they were great.
• 20:54
  And think everyone's like, there's only one way to make money in venture, be consensus.
• 20:57
  And I'm like, no.
• 20:58
  You can also just be the person that the very best people choose.
• 21:01
  That's actually another way to make money in venture is to just win the consensus good deals
• 21:05
  consistently.
• 21:05
  And so I think this was the best sort of framing because I think LPs are always like,
• 21:10
  well, specialists have it easier.
• 21:11
  I have friends who were running AI focused venture funds five or seven years ago, and they
• 21:16
  were way ahead of the curve.
• 21:17
  Most people were like, this is not a theme around which one could build an entire fund.
• 21:21
  Now AI is venture in the same way that SAS was venture five years ago.
• 21:25
  And I think, you know, I'm on the IC at Screen Door, and sometimes people are like, we're
• 21:28
  gonna be an AI focused fund.
• 21:29
  I'm like, why would you do that today?
• 21:31
  It just doesn't make sense.
• 21:33
  Like, it's a consensus good idea.
• 21:34
  And I think that's the challenge either for us.
• 21:36
  So I always tell LPs, which problem would you rather have?
• 21:39
  Being a generalist and trying to figure out how to get in front of the most interesting people
• 21:43
  working in new areas or be a specialist where you're constantly watching the clock on your
• 21:47
  arbitrage opportunity and wondering when you'll have to pivot to the next thing.
• 21:51
  I would much prefer to be a generalist who's trying to find where are the new areas of
• 21:55
  interest.
• 21:56
  Like, we saw a lot of crypto stuff early.
• 21:57
  I just didn't understand it.
• 21:58
  In some ways, I still don't understand it.
• 21:59
  But, like, there's very smart people working on these interesting problems, and they're just
• 22:02
  not problems that I'm interested in partnering with people to solve.
• 22:05
  There've been other categories where I'm just like, oh, this is a thing.
• 22:08
  It's not well understood.
• 22:09
  We should invest in it.
• 22:10
  And now people come to me, oh, we're doing such and such benefit through the employer channel.
• 22:13
  I'm like, well, like, that was, like, a cool thing seven years ago.
• 22:16
  It's not done.
• 22:17
  It's just much harder.
• 22:18
  I'll ask you this one last question.
• 22:20
  Every fund claims that they do nonconsensus deals.
• 22:23
  They all say in market that they're all into nonconsensus area.
• 22:27
  But then you'd probably see a bit in their portfolio, and you know that they join specific
• 22:30
  rounds within companies that are very of the hot topic of today.
• 22:34
  What's your perspective on that?
• 22:37
  It's funny.
• 22:37
  There's a handful of funds I know who are like, we just compete for the hot consensus deals.
• 22:41
  And I've noticed they're honest, and they've been a lot more honest about that with me in
• 22:45
  the last probably twelve months that, hey.
• 22:47
  We haven't given up on our ability to compete with and defeat the big multistage funds or to
• 22:52
  beat other seed funds competing for hot seat deals.
• 22:54
  We're okay fighting for those deals because we believe we can win them.
• 22:57
  And then there's other people I've met who are like, well, we we like consensus outsiders.
• 23:01
  We back people from Berkeley too.
• 23:03
  And I'm like, okay.
• 23:03
  So you've it's like I was like, oh, I thought you're gonna say something really
• 23:07
  revolutionary.
• 23:08
  And, you know, what I tell our LPs is I'm very focused on finding individual contributors and
• 23:13
  people who are earlier in their career because I think venture's pretty efficient with repeat
• 23:18
  founders.
• 23:18
  Those people know who they want.
• 23:20
  People who are looking for them find them.
• 23:21
  I find there's this pool of people who are individual contributors earlier in their
• 23:25
  career, don't have a ton of relationships, don't have a ton track record, that I just
• 23:28
  think we're bad at underwriting those people.
• 23:30
  And I have a point of view about what we're looking for in those people and what makes them
• 23:33
  successful, and I think that transcends category.
• 23:36
  I think Hunter said this before.
• 23:37
  Like, your portfolio really reflects what you do.
• 23:39
  You have all stuff in your website, but I usually just go to someone's portfolio and say,
• 23:42
  what did you actually put money in?
• 23:44
  That tells me a lot about what you actually think good looks like.
• 23:46
  Well, we are all out of time today.
• 23:48
  Thank you, Charles, for joining in, and thank you to our listeners for listening to Learning
• 23:52
  Corner.
• 23:52
  Please like and subscribe, and we will talk with you all next week.
• 23:55
  Thank you.
• 23:56
  Bye.
• 23:56
  Bye.