First Funders | 02: 300 startup investments, 500 LPs, sharp elbows

Jenny Fielding, a pre-seed investor and angel with 300 early-stage startup investments, discusses investing in FinTech, hard tech, and consumer spaces over the past decade. From studying law to working in finance to leaving it all to found not just one but two startups, Jenny brings a founder-operator mindset to her fund, Everywhere Ventures. She writes pre-seed and seed-stage checks for $50k to $250k.

Highlights from our discussion:

Jenny’s first seed investment and its fast, huge outcome
Her simple evaluation framework for startup companies and their founders
The way larger funds can screw early angel investors
Everywhere Ventures’ latest seed investment comes out of stealth
A yearly ritual to become a better angel and startup investor

This is for information purposes only. This is not investment advice.

Topics

(00:00) - 02: Jenny Fielding - Everywhere Ventures
(03:07) - How does Shaherose know Jenny?
(04:17) - Jenny's Journey into Investing
(05:10) - Why did Jenny choose the investor side of the table?
(08:27) - How did Jenny land her first investment (which went big!)?
(11:02) - How does Jenny evaluate companies?
(15:39) - How Jenny categorizes companies and check sizes
(17:49) - How an angel investment went public and yet Jenny got nothing
(25:18) - How does Jenny maintain authentic relationships while seed investing?
(29:38) - Seed investors promise access to founders - does it matter?
(33:39) - Jenny's successful seed investment in a Blockchain company - for real!
(37:53) - Angel invest and chill? What signals help assess your investment early?
(39:26) - How Jenny seed invests and then helps with future fundraising
(40:46) - Using secondaries to generate returns and lower risk
(44:18) - Pre-Seed fund return profiles - what's the goal and reality?
(46:14) - Jenny and Everywhere seed invest in the "table stakes economy"
(47:21) - What is the difference between pre-seed and seed startup investment rounds?
(48:56) - Does valuation discipline matter for early angel and seed investors?
(51:44) - Jenny's latest seed investment: Fora comes out of stealth
(53:47) - Jenny's one trick to become better at startup investing
(55:43) - How Jenny partners with Scott to make investment decisions
(57:00) - Jenny's hot takes
(58:21) - Takeaways from the interview

Connect with Us

Follow the First Funders Podcast

Newsletter with behind-the-scenes access and key takeaways

Twitter/X @shaherose

Twitter/X @avirani

Email us with feedback and suggestions on topics and guests

Creators & Guests

Guest

Jenny Fielding

Managing Partner, @EverywhereVC investing in pre-seed founders building the future of money, health and work 🚀

What is First Funders?

Learn from angel and seed investors bold enough to write the first check.

How do they decide which startups to invest in?
How do they gain conviction in founders and ideas?
How do they add value to their companies?

Shaherose Charania and Aamir Virani are operators turned investors. They chat with their friends investing in early-stage technology startups and learn about their strategies to fund the best founders and startup companies.

If you are an angel investor or seed investor, you'll hear how others operate.
If you are a startup entrepreneur, you'll hear how investors filter and decide on writing that first check.

[00:00:00]

[00:00:01] Aamir: Hi, Shaherose, how are you doing?

[00:00:08] Shaherose: Good, how are you Aamir?

[00:00:09] Aamir: Awesome. The feedback for our first episode was really great. We heard from a lot of friends and acquaintances out there in Silicon Valley and elsewhere around the world. How did you feel?

[00:00:19] Shaherose: I am so thrilled with the momentum we have from the first episode. People are excited now for the interview series that we're about to launch, it's been fabulous to see listeners, not just from the U S but we've got folks, in Canada. We've got some folks in India and Mexico too. So to all those listeners all over the world, welcome to our community.

[00:00:41] Aamir: Did you have any random people reach out to you? I had two acquaintances from the past reach out and say, Hey, I'm working on prop tech startups. Since you're interested in real estate, why don't we talk And that was totally a surprise. I did not expect that from the first episode.

[00:00:54] Yeah, same, same, same. I had three folks reach out, two folks I know and one [00:01:00] person I didn't, who said they listened to the podcast and they're starting a company and they want to meet.

[00:01:04] Shaherose: This episode, we're going to change tacks just a little bit. The point of having Arjun on in the first episode was to give an overview of Silicon Valley and the landscape in 2024. Now we're going to switch over to our First Funders interview format.

[00:01:20] Aamir: Our first guest is Jenny Fielding, and we're going to go over some of the questions we hope to ask all of the angels and seed investors we're going to talk to. we'll learn from her about her journey into investing, like how she actually ended up in the space, where her capital comes from, why she's working on this.

[00:01:34] And then we'll talk about her first investment and see if there are any major lessons there. A lot of our listeners are first time angels and seed investors. It'll be useful to hear from someone who's done this many, many times and how the first one actually went.

[00:01:47] Then we'll also talk about their best investment and worst investment. And that's kind of up to them on how they wanna define it. Hopefully we'll see some lessons there.

[00:01:54] And then what they're working on today, how are they investing? What do they think of the landscape and how are they trying to find alpha [00:02:00] in this startup investing world?

[00:02:01] Shaherose: We're anticipating learning from these folks because a lot of them have been in the game for five, 10, 15 years. And I'm curious to see at the end of, let's say 10 episodes, what is common and what is different? Is everyone really investing differently or is there some sort of focal point for each part of the investing process that is the same.

[00:02:25] So let's see where this all ends up.

[00:02:28] We're very excited to welcome Jenny to the podcast. So Jenny Fielding is one of two GPs at Everywhere Ventures. And I've known Jenny since she came off being a founder.

[00:02:39] Jenny is truly a First Funder. She has written first checks into over 300 companies, at Techstars and now with her own fund.

[00:02:49] Aamir: And she is also one of those quintessential founder operator investors. She is someone who has operated and she founded two companies in the mobile space, which is when I met [00:03:00] her initially. And now our interview with Jenny Fielding of Everywhere Ventures.

[00:03:07] How does Shaherose know Jenny?
---

[00:03:07] Shaherose: Alright, good morning, good afternoon, wherever we all are, PST, EST, welcome to the First Funders Podcast with our dear friend Jenny Fielding here from Everywhere Ventures. I thought I would start talking a bit about how we know each other.

[00:03:23] It was a long time ago when Jenny and I met, we met around 2009 and I was just coming up with the idea of an incubator called Founder Labs.

[00:03:32] And a mutual friend of ours said, you two should meet. And I hadn't even put anything on paper, but the minute I started talking about it, Jenny was like, I'd love to be a part of this.

[00:03:41] You helped me design the program. You helped me interview founders that ended up joining the program. And you were there throughout all five cohorts in the Bay area. We did three, four, four cohorts in the Bay area, one in New York, and you were there as the number one mentor and advisor to all the teams [00:04:00] and mentor and advisor to me.

[00:04:01] And from then we've continued and looked at deals together. We've collaborated, we've shared ups and downs together. So it's really fun to have someone I know really well, onto the podcast here today to talk about her journey and some of her best and worst investments.

[00:04:17] Jenny's Journey into Investing
---

[00:04:17] Shaherose: I'd love for Jenny to do a quick intro

[00:04:18] Jenny: Thank you so much for having me. it's such a treat to be here with you. when I met you in 2009, I had just emerged from my first company. And so, my bio is really that, I'm an accidental entrepreneur.

[00:04:31] I was working, and went to law school, was working in finance and then came up with an idea. Not of a startup of something that I wanted to see in the world. And ended up building a company around it.

[00:04:42] And so, fast forward by the time I met you, I had just gone through, the blood and sweat of my first company.

[00:04:49] And, when you said you were putting together a program to help founders, I was like, I need that, I needed that. And so it really resonated with me. And since that time, I've been building and [00:05:00] investing in companies.

[00:05:01] Most recently, as you mentioned, running Everywhere Ventures, which is a pre seed fund. Investing across money, health, and work, which we call, the table stakes economy.

[00:05:10] Why did Jenny choose the investor side of the table?
---

[00:05:10] Aamir: some folks who are listening are on the investing side. Some folks are on the founder side. One question I had for you was, how did you decide to go on the investor side? You've done two companies. What made you say, I'm done with that side of the table. I'm going to go ahead and be a investor instead.

[00:05:25] Jenny: Well, also an accidental investor. So I was, working on the idea for my third company. And, I ended up,bumping into, some people on the investment side and, at that time the idea of founders being investors wasn't what it is today. Like less people were talking about that.

[00:05:44] A lot of VCs still came from,finance and traditional backgrounds. And so when I, eventually. decided to do that. It was like, okay, I'm going to spend a few years learning how to invest because I think actually it'd make me a better founder, understanding, the [00:06:00] motivations and, the other side of the table.

[00:06:02] And so that was how I, I got into investing first, was kind of a hybrid role, I ran the digital innovation group for a large media company. And then spent seven and a half years running Techstars New York. So it was kind of a slow move over from,innovation to, incubator, accelerator, and then into a full time investment role.

[00:06:23] Aamir: Was there ever a moment where you thought, okay, I'm committed to this side now? Was there a trigger point that made you say, I am meant to be on this side of the table?

[00:06:33] Jenny: Yeah, I think my, my time at Techstars was, it was very, enlightening for me. And I think I realized that, while I was a passionate entrepreneur, maybe I wasn't the best entrepreneur and that I really found my superpower of helping other entrepreneurs not make the same mistakes that I've made surrounding them with resources, being connectivity to, a world that was maybe opaque to them, which was kind of the investor side.

[00:06:58] So as much as I think [00:07:00] founding a company was,the most important, hard, amazing, like all those things. I think that I'm actually well suited for early stage investing just because of really what you need to do, rolling up your sleeves, having empathy, helping, but not being,the primary person.

[00:07:17] Shaherose: Yeah, if I think of three things that I think are true about you from when the first time I met you to today, the first thing is that you deeply understand that founder journey, like the nitty gritty of it, that empathy that you talk about. It's real. I've seen you in action and I've seen founders feel like, Oh she gets it. She's done this.

[00:07:40] I think the second thing is that you've always had an opinion of either about a person or a space and you speak your mind. And that is not always the case, right? With, with investors as well. And helpful to founders to hear what your opinion might be. Because if they do agree or disagree, especially if they disagree, hopefully they're sharing their side [00:08:00] too, for you to learn how they think.

[00:08:02] And the third thing that I've noticed about you is you hustle hard and you do not take breaks. And I think founders can empathize with that. They see that they see you in the ecosystem. And I think it's, it's incredible to have a profile like yours, a very different profile that to your point earlier was not normal, but to have you here fully into the ecosystem now is, is incredible. So founders are lucky.

[00:08:27] How did Jenny land her first investment (which went big!)?
---

[00:08:27] Shaherose: Let's talk about your first investment.

[00:08:29] We'd love to hear what it was, how did it go and what were some of the learnings?

[00:08:34] Jenny: Yeah. So this is actually a funny story. So in, 2010I joined, as I mentioned, a large media company to be the head of digital innovation, and, my job was a little bit figuring it out. Like what was going to move the needle for this media company. And so with that, we were able to experiment and try a bunch of things.

[00:08:55] Some of them were investing in companies. Some of it was incubating companies, starting an [00:09:00] accelerator, all these things.

[00:09:01] It's like maybe 2010, 2011, I'm at South by Southwest. I see this company, and they're in the crowdsourced video translation space. And, the media company I was working with had all this incredible, content and they were trying to figure out, like, how do they distribute this and distribute it, efficiently, right? It's like, at the time, very expensive to translate all this content.

[00:09:22] So I saw this, I started to make the connection, like, wow, that would be amazing if we could take all this content. And have it crowdsourced, right? So I saw this, strategic connection, ended up connecting with the entrepreneur who was fantastic.

[00:09:34] He was, between San Francisco and Singapore. We just had a really good connection. I got to know him a little bit and I ended up. developing this thesis around it and making my first investment, as a strategic. Really my first real investment where I put like a, a fair amount of money into this company.

[00:09:52] And at the time, it was still kind of a small ecosystem. I was mostly in San Francisco and I remember, Reid Hoffman was on the [00:10:00] board and you could just like call him and get a reference. I feel like that'd be maybe hard now, but he was around the table and Marc Andreessen was also involved in the company.

[00:10:08] And the funny part of the story is that the company was acquired two and a half years later by a large company called Rakuten for, I don't know, like 200, 300 million dollars, like a ton of money.

[00:10:19] And we had like written a big check. And so my first investment was. I was like, wow, this is really easy. Like you invest in a company and two and a half years later, it like exits for 300 million. This is great. So, the big learning there for me personally was that is not how the investment journey works.

[00:10:38] And there's a lot of luck in investing. And I think that's like, something that I've come back to many, many times. You can do a lot of things, right. You can check all the boxes, but sometimes. right time, right place, you do get lucky.

[00:10:51] And so, you know, every morning I wake up with a lot of gratitude that I get to do this job. But I also appreciate that, I've had some great opportunities kind of [00:11:00] based on serendipity and the like.

[00:11:02] How does Jenny evaluate companies?
---

[00:11:02] Jenny: But going back to what I liked about this company, it helped me come up with this framework. Which is how I evaluate companies. I mean, we're investing at the very early stage, so, let's take metrics out of it and let's take, some of the fundamentals because at the, at the pre-seed and seed, we don't really have that.

[00:11:19] But, this company had a very interesting founder who I felt had, unlocked a secret about the market. And that was really based on this incredible, global mindset that he had. He was born in the Middle East, went to Stanford, was running his company in Singapore, and he really saw we weren't gonna be so segmented into geographies and, and languages. That as everything came online and, progressed from there that, we needed to have a lot more fluidity, between communities and cultures

[00:11:50] And so that was really part of the thesis of what his company was doing with this crowdsource translation, right? Because if there's a great content, everyone should be able to see it.[00:12:00] And so I love that he had a secret, about the market, about the world, where the world was going.

[00:12:04] So he didn't pitch me like, today it's hard to like watch, videos if you're in South Korea. He really was like, think about globalization, think about where the world is going. And I just thought that was really incredible. And so that's definitely one of the frameworks that, that I look for is the founder that has a secret about a market.

[00:12:22] The other thing is resilience. As I mentioned, this founder grew up in a developing country. He'd gotten himself to Stanford. he was living in Asia, and I just saw, over, the course of maybe six months before I invested, just a lot of grit.

[00:12:38] And, I thought, okay, when bad things happen, when complications happen in running the company as they will this guy is going to be able to get through it because he's had all of these challenges in his life. So that was my second tenet was really around resilience.

[00:12:50] And then the third one was, you know, as I got to know him over the six months, you know, we'd have these like [00:13:00] great conversations about about products, about design, about all these things. And like every time I would meet him, he'd come so energized and he'd be like, Oh, we just built this new thing that you should, should check out. Or like, I thought about what you said last week and we built this little prototype.

[00:13:13] And so I call that the fast founder, The founder that's like very responsive to data. Not necessarily what I'm telling them, but like what their customers are telling them, what the market's telling them, and they move fast and iterate as opposed to like oh yeah, that's interesting. Let me put it on the list of another million things I need to do, Because as founders, there's a lot to do, but that fast founder who can kind of just like power through stuff, iterate quickly, be responsive to data.

[00:13:37] It was back in let's call it 2011, where I developed this framework and that's really what I've been using ever since.

[00:13:43] Aamir: So to summarize, you've talked about these three tenets before, right? You like founders who have unlocked some sort of secret. You like founders who have shown some sort of grit and resilience, and then you like founders who show a learning mindset and can move after absorbing data.

[00:13:57] So I have a question to you on that last point. How do you [00:14:00] validate that when you're trying to determine whether to make an investment in the first place?

[00:14:03] Like from my own background, I feel like I see three types of founders.

[00:14:06] They're the founders who listen to everything you say.

[00:14:09] They're the founders who listen to nothing you say.

[00:14:11] And they're the founders who go off and do the learning you're describing, the synthesis and then I feel like I learned from them when they come back and give a response. I have found that really hard to suss out. figure out during the pre investment phase, where I'm trying to figure out this is a founder who is actually going to learn or not.

[00:14:25] So how do you approach that?

[00:14:27] Jenny: It's funny because in our last five years through Everywhere Ventures, we write about one investment a week. And so when I say that, people think I meet a founder on Monday and like I invest on Thursday. No, like our pace is actually, we invest one a week, but I might've met that founder, three months ago or I might have met them three years ago. And so we're tracking these, data points, over time and trying to understand who they are.

[00:14:50] And sometimes they're not things related to product, right? So I was telling Shaherose the other day, with respect to a founder, where we were going through the, the paperwork [00:15:00] process of investing, and a few things kind of happened, and I was like, okay, note to self, you know, this is how they operate on this vector. These things unfold over time.

[00:15:10] And so the more time you can give yourself to get to know people on all dimensions, not just like, oh, do I see them iterating through product fast, but like, how do they interact with their lawyers? How do they deal when an investor says they want a side letter? All those types of things are, are data points and how you interpret them is up to the individual investor.

[00:15:28] Some investors, don't care about those things. I have certain criteria that I'm interested in and I feel like, gives me an insight on how they're going to be to work with.

[00:15:37] And that's, what's really important to me.

[00:15:39] How Jenny categorizes companies and check sizes
---

[00:15:39] Shaherose: When you talk about making one investment a week. Like, what's the minimum amount of time you're spending, or number of touch points you have before you make a decision?

[00:15:51] Jenny: So we have two checks. We have an exploratory check, which we often write in conjunction with our venture partners who are located around the world. And those [00:16:00] are small 50k checks. And so oftentimes what that helps us do is like build conviction about a founder. You know, we put a small check in. And sometimes that could be, you know, only a week where we know that person, but oftentimes even those are, over time.

[00:16:15] And then as I said, the data points of how the legal process goes, what happens after, what's their communication like right after, are they sending, an email to everyone?

[00:16:25] I just had a founder who just closed the round and he got all his investors on a Zoom call because he wanted everyone to meet each other. It was like, maybe 15 investors to know each other. And he was like, you guys are my team. You all need to know each other.

[00:16:36] Everyone handles things in different ways. I don't think there's a right or wrong answer, but there's interesting interactions and data points that you can gather, right?

[00:16:45] And so when we write a core check, which is, more like a 250K check, we often have spent a little more time with the founder and have,more of a sense of, how they operate.

[00:16:55] Aamir: So how do you differentiate between the two? What makes a founder go down the path of [00:17:00] exploratory , versus, being a core, check for y'all?

[00:17:03] We have about 30 venture partners around the world. And so they help us, kind of source diligence, invest, and ultimately support this portfolio. So a lot of times I'm not, involved in a lot of the early stage. By the time it gets to me, it's like, Oh, this is a company that we want to invest in. So that happens quite a bit.

[00:17:21] Jenny: And then, sometimes we're just getting to know the founder. So, I gave you kind of my three tenets and maybe they didn't hit all three for me yet, but I want to get to know them.

[00:17:30] And so, I feel let's start the relationship out with a, with a smaller check and then let's see how things progress in the next few weeks. Sometimes it's a few months. So sometimes it means we just invest in the next round. Sometimes it means we invest in the next few weeks. And sometimes, you know, there's like a top up round or things of that nature.

[00:17:49] How an angel investment went public and yet Jenny got nothing
---

[00:17:49] Shaherose: I remember that first investment, by the way, that you're talking about. And I remember when you were like, wow, the company just got bought. So I, I totally remember those moments. And I also [00:18:00] remember that there's been plenty of investments that kind of went the other direction.

[00:18:04] Let's reflect and maybe if you can share one of the more challenging investments you made, sort of what was hard about it. What's one that sticks in your mind where you hopefully learn the most lessons?

[00:18:17] Jenny: Well, I'm going to tell you a crazy story. So this is a story of a company, that I angel invested in, before I had my fund and it was a really cool company at the time. Aamir, I was, interested in, new modalities of like physical product, hardware, you know, all that kind of good stuff, deep tech.

[00:18:36] And, I met this founder and I would say that was a little unusual. Like, I guess that's the best way to describe him. He was very technical. He was very in the weeds, but I mean, he checked my boxes like five or six times. Like this guy really was a futurist. He saw a world that I couldn't even imagine.

[00:18:55] And he was super passionate, so resilient. I just loved everything [00:19:00] about him. Although even though he's based in San Francisco, he wasn't your typical San Francisco bro. And so the company was developing rapid prototyping PCB boards. they were building this factory of the future in San Francisco.

[00:19:12] So that, when you were developing hardware or PCB boards specifically, you didn't have to send them abroad, which would create a lot of friction, expense, and, quite frankly, wait time. If you have to send stuff to China you have to wait for it to come back. So, I loved everything about this company. I ended up being in the angel round investing and then develop a really good, working relationship with him.

[00:19:37] Had a good rapport with the co founders, spent a fair amount of time for an angel investment with him, and the team. And I just remember like introducing him to a lot of investors, like through the A round, the B round. I remember working through a financial model with him.

[00:19:50] So really kind of went deep. I thought he was a very special founder. And at some point. I'm not sure the ins and outs of who decided, but at some point it wasn't, right for [00:20:00] him to continue to be the CEO. So he stepped down, he stayed at the company, but he stepped down as the, as the CEO and, the independent board member stepped up.

[00:20:10] And, this person became the CEO, seemed nice enough. at this point I was busy, I was doing other things. We would have an email every once in a while. But my biggest mistake is that I didn't develop a relationship with this person.

[00:20:25] And so the leadership now of the company, was with someone I didn't know. And so if everything's going swimmingly well, maybe that doesn't matter. In this case, the company was actually growing and they decided to do an alternative financing. They ended up doing a SPAC.The company ended up going public and because of various things, it was not a good public listing. This company ended up with like this massive valuation.

[00:20:56] They went public, there was liquidity. And basically I made [00:21:00] zero.

[00:21:00] I got, you know, my money back maybe like twice or something, but I mean, I'd written like a tiny angel check. And it really hit me hard because I'd spent so much time with this company. I, really loved that original founder. I'd saw the company through multiple rounds and then at the end, it basically came down to like sharp elbows, people on the cap table that, were way bigger than me. And everyone fighting for, for what was there. And me as a little angel ended up, with nothing.

[00:21:31] So I share that story because, it was really tough, right? Not just financially, but I just felt like, gosh, you're an angel. You take all the risk, you put in all this work. And then, you know, you end up with nothing. And it really upset me, like fundamentally just made me question this business, being an angel investor. And, yeah, I think maybe it hardened me a little bit to this business.

[00:21:58] Shaherose: what would you tell an [00:22:00] angel today as you think about that scenario? Is that what an angel can expect as a company gets bigger and bigger because your ownership, continues to dilute? What would be the lesson here?

[00:22:11] Jenny: Yeah. So a few lessons:

[00:22:13] One, you have to stay really close to the leadership because different people in this case were treated differently. So different people on the board or close to the company had, different rights towards the end. Second is like get to know the board members because the way this whole ecosystem works, a lot of it is through relationships and signal and who you know, And so if you know the board members, like you have a better chance of them, protecting your interests when it comes to things like, cram downs or recaps, or the like. And if you don't, you just put it in the hands of, of them, like you may not be taken care of.

[00:22:50] So I think for me, the thing I really learned is it's not enough to be on the cap table, right? You really need to be involved and figure out how to protect your [00:23:00] position. And if you're a small and you can't like financially protect your position, because you can't like re up

[00:23:05] There's other ways to protect yourself, through relationships. So that was my big learning.

[00:23:09] Aamir: Emotionally, that does sound really rough. It feels like in the end, you're saying the issue involved better relationships with the people around you, not just that founder, and that some of it was just a financial situation that, you had not been able to re up in subsequent rounds.

[00:23:24] Do you end up saying that this was stuff that was out of my control? And that there were people there to help you process that? Or did it take you years of figuring this out on your own?

[00:23:32] Jenny: I knew some other angels on the cap table. In fact, when I posted it on Twitter some pretty prominent people ping me and again, they were running their funds. They weren't really paying attention and they were like you know, oh man, like we all just got, you know, totally screwed.

[00:23:48] there was a whole contingent of us pretty sophisticated people who realized that, because we weren't invited to the recap that we'd gotten screwed and I don't think this was a personal thing, right?

[00:23:58] I don't think they were like, let's screw [00:24:00] the angel investors. They were moving fast. They did what they thought was best for the company.

[00:24:04] But because I wasn't in the room, and no one was thinking about me, like I wasn't part of any of the decisions. The lesson is it wouldn't have happened with a founder that I was close with, like the founder I mentioned previously, or, some of the other ones we can talk about.

[00:24:17] Because I would be in really good contact with the founder. And I would know what was going on and, probably this wouldn't have happened. So, yeah, there was a lot of lessons there. And, I think the other angels and, people around the table at the early stage also felt the pain.

[00:24:32]

[00:24:32] Aamir: I've seen both where the founder seems like they're a really good friend. And then when it comes time to make hard decisions around the cap table, you're jettisoned, because for those folks, money talks and the bigger funds talk.

[00:24:44] So that's why I wonder like how, how much of this do you really have control of and is this something that especially angels, should be thinking about is that there's always this nonzero chance that you're just going to get pushed out.

[00:24:54] Jenny: Hundred percent. And I just think it was, it did give me a interesting perspective [00:25:00] about being an angel and it's not much different for us, as an early stage fund, right? Because oftentimes we do our pro-rata through SPVs only to like a certain level. So it is really about having those relationships with the founders and the folks on the cap table.

[00:25:18] How does Jenny maintain authentic relationships while seed investing?
---

[00:25:18] Shaherose: What I'm hearing you talk about a lot is relationships, right? You have a lot of portfolio companies. So how does one individual maintain authentic relationships when it is critical to the job?

[00:25:30] What does it look like to you?

[00:25:31] Is there a CRM you're looking at and you're, I haven't been in touch with this founder for a while, like what's your strategy and tactics for being top of mind, being in relationship, with your portfolio?

[00:25:42] Jenny: Well, it's interesting after that experience, I called my co founder, Scott, and I was like, I always want to know who's on the cap table.

[00:25:49] I want to make sure, even if we're writing a 50 K check, like I need to make sure that there, I was like so traumatized. And I was like, went the other extreme where I was like, every deal we do, [00:26:00] I want to put the syndicate together. So in a way, we like that when we're the first to commit. Even if it's a million dollar round and then, we call our friends.

[00:26:08] So I think what's really cool is that if it's not just you on the cap table., Say a, a series A or B investor is getting a little tricky with their terms and they want to, do some, financial jiggering. If you've got not just Jenny, but you've got Jenny and you've got like five or six other early stage folks that can really pound the table and that they might have relationships with and not want to burn the relationships, you have a better shot. So really why I wanted to know people who are on the cap table is like, Hey, let's form a pact and a syndicate and make sure this doesn't happen to us as a class.

[00:26:43] And so I think that goes to like your question, which is, early stage is so collaborative. And that's what makes it really magical is that, I'm writing a small check and you're writing a small check and like we can all get together on the cap table. There's just like no sharp elbows.

[00:26:57] And then especially when you are [00:27:00] investing so frequently, such high volume like we are, we have to make sure that we're friends with lots of people, right? Because we're gonna be on the cap table with all of them.

[00:27:08] I mean, it's a big community, but it's a small community. And so when there are bad actors, I'm not, afraid of, speaking my mind. when a founder says, what do you think about this investor? I'll be the first one to say, no way. And just tell them the experiences that I've had. It's for the founder to make the judgment ultimately.

[00:27:24] But, yeah, it is a small community and I think there's only so many times, the, the big guys can not treat you well before, you start telling people and coaching them not to take money there.

[00:27:35] we have our, our naughty list of a bunch of billion dollar funds that we don't feel like are good players in the ecosystem. And oftentimes it's not the fund, unfortunately, it's an individual. So it's not like don't go to that fund, but it's like, don't deal with that person because they're just a bad apple and we don't want our founders dealing with them and we don't wanna deal with them.

[00:27:54] And we're very open with that information.

[00:27:57] Aamir: That's an important bullet point. It's not the firm that matters as [00:28:00] much as the actual partner at the firm or the angel themselves. Each person at a company or at a firm has their own attitude towards how to treat other people. And you have to keep that in mind as you go out and invest with these folks.

[00:28:11] Jenny: Yeah. And then Shaherose, you asked, how do we keep up to date? I mean, that is the challenge.

[00:28:16] we've built out a AirTable where we keep, profiles of all the co investors, the later stage investors. We keep it nicely updated. In fact, this week we just sent out like a form for everyone because we know people's theses change and check size change. And so we try to keep that up to date as much as we can. And yeah, we, we've gotten pretty good at the data game.

[00:28:37] So, when a founder's like, Hey, I'm raising a seed, who should I talk to? We can very quickly, do a sort, figure out who are the best, in that category, in that geography, in that stage, and be able to, ping those people quickly.

[00:28:51] You know, we've been building this fund for five and a half years, so we have spent a fair amount of time. We're a team of people working all around the world on, creating a stack that, really works for such a large fund.[00:29:00]

[00:29:00] Shaherose: when you think about staying in touch with the investors, that's one thing, but staying in touch with the portfolio, do you, have days set aside in your week where you say, okay, it's portfolio day, or are you of reactive to the monthly updates?

[00:29:14] what's the process by which you stay in touch with the founders?

[00:29:17] Jenny: Yeah. So we're unique in that we have 250 portfolio companies, so that's a lot. But we've tried to, over the last five years, build out like a suite of collaborative tools that is much more fun. pull rather than push. And so what I mean by that is like, whether it's our investor AirTable that's open to our founders or it's our, you know, we have this doc that's really fun.

[00:29:38] Seed investors promise access to founders - does it matter?
---

[00:29:38] Jenny: All our capital comes from other founders and operators and we have 500 of them. And so we have, an AirTable that has all of their superpowers, just like one thing that they do better than other people. And so founders can sort and be like, Oh. Here's the go to market guru, and they can contact that person themselves because that person is in our Slack channel, they're an LP in our fund, and they're incentivized to help.

[00:29:58] And so we've tried to [00:30:00] build out, a suite of these resources where founders can self serve. So it's not Jenny getting on a call for an hour every week. It's, founders really supporting founders. And I think that's. What's unique about our community, it's not one to many, one GP to many, it's many to many.

[00:30:17] So we've got this community of 500 founder and operator LPs, plus another 250 portfolio companies that are all supporting that larger group of founders.

[00:30:27] Shaherose: One of your ways you describe Everywhere is "it's a portfolio supporting a portfolio." Based on prior experience, I can tell you like other VCs will say, well, you get access to our founders as well.

[00:30:38] Aamir: We, we have lots of founders in the portfolio. Look at all the successful companies we've had. I remember, one of the events I went to, we got 10 minutes with Michael Dell, like the guy who started Dell computers. Right. And was it useful? It kind of felt like it was an ego stroke more than anything else.

[00:30:55] Later on other investors would try to come and say like, Oh, well we have so and so or we're on the cap table [00:31:00] for this company. And this hardware company, it's very relevant to what you're doing, but then we had to rely upon the investor or their chief of staff or their executive assistant to help push things forward to make a connection happen.

[00:31:12] I like what Everywhere says, it sounds like you dissociate yourself from the process and let founders have direct access to this AirTable and that's your secret sauce for the actual connection. Is that right?

[00:31:22] Jenny: Yeah. our team and our venture partners help play air traffic control of connectivity because oftentimes the founders, they're really busy and they're not thinking of a connection like, oh, you should talk to this person. They happen to be in, Singapore. So maybe you don't know them, but they'd be good. So I think that's, thing one.

[00:31:38] Thing two is that, something I've learned over the last, decade in, in startups is that. Michael Dell, like the fancy names are not always the most helpful, right? And oftentimes it's the folks that you don't know, but they really have, great expertise or a secret and they're not very hard to reach.

[00:31:55] Aamir: So, yeah, I feel like everyone in our community is very [00:32:00] accessible. I mean, we don't tend to have these big names, that have like lots of layers between them and the world. That's not what we sell to, to our founders. We're like a community of people, like the three of us, right? People that want to see the next generation get better. To do that, like you put in a little bit and you get something in return.I feel like I should give you a chance to give a shout out to one or two people that you think are these types of experts that are in the Everywhere LP base.

[00:32:25] Jenny: I mean, we just have like a great community. One of our, factors of what we look for is, we want people that want to make the world better.

[00:32:31] there are just people that are community minded, that are nice humans. And we walk away from a lot of deals that are good investments.

[00:32:38] And that's like a topic you guys could do a whole show on. Honestly, I think it's a great topic is like, what's your, commitment or like obligation to LPs?

[00:32:46] is it just to get returns or is it to build the fund that you want to see in the world? And for us, we've made the decision that, there are enough good people in the world building massive companies. And we're going to focus on those as opposed to the jerks. Cause there are a lot of those [00:33:00] folks as well.

[00:33:01] We're very proud of our community and we just don't seem to have troublemakers or bad actors, We run a community that has about a thousand people on a Slack channel. We have never in our whole existence of having the Slack channel six years had any like animosity, anyone saying something inflammatory. People literally use the Slack channel just to connect and resource oriented and for feedback and whatnot.

[00:33:25] It's like pretty amazing. We have people from all different walks of life that believe that, you know, believe and practice very differently. But when they come to our community, it's all about, being a founder and putting that hat on.

[00:33:37] And I think that's the thing I'm most proud of.

[00:33:39] Jenny's successful seed investment in a Blockchain company - for real!
---

[00:33:39] Aamir: What's the best investment you've made so far where hopefully you've realized some outcome, and bring a little concreteness to it, If you can talk about what it is, but also like, how long did it take to have, get to this outcome?

[00:33:54] Shaherose: Why did you invest? what did you see at the time and what did it end up actually being? Cause things always change.[00:34:00]

[00:34:00] Jenny: Yeah. So, in 2015, I was doing a little bit less in deep tech and was interested in, FinTech and the future of, of financial services And obviously that was one of these waves, as we've seen many, that, blockchain was, rising. And so, I met this founder and again, going back to having a vision about the world.

[00:34:24] he pitched me this crazy world where my grandmother would be transacting in Bitcoin and he was quite convincing. He had been in the space for a long time. He'd been the co founder of an exchange and he laid it out for me in a way that I can understand. you know, I'm not technical. He didn't like jump in the weeds, but he painted this like very beautiful picture ofwhat the world could look like when everyone had access to, a currency without like a middleman, right. Or transactions without a middle person. And I thought that's like pretty amazing.

[00:34:56] And so he was building a blockchain analytics company. Cause he was like, well, If [00:35:00] crypto is going to rise, someone needs to be tracking it. And so, I started working with the company and it was very clear to me, within the first six months that this was very special company, that, this founder was going to, create a really large company.

[00:35:15] What was interesting is it wasn't clear to anyone else. So this was the most exciting company that I'd invested in and never let me down and all the things that I look to track, over those six months.

[00:35:26] the company was based in Europe. I convinced them to move to the US. It's going to be easier for you guys to raise here. I sell them this whole vision. And then, we got to raise the seed and I introduced them to everyone in the market and everyone wants to take the meeting, right. Cause very compelling founder, big vision, like all these things and everyone comes back: no, sorry, Jenny, like market size, market, market size, too small, market size, too small.

[00:35:48] And I kept on saying like, well, today the market size is too small, but what you're saying is you don't believe that that will come to be And like, no one would really admit that, but they were just like, market size, too small. [00:36:00] So, so everyone, the best investors that you know, passed, passed on this deal at the seed.

[00:36:06] And they ended up, taking a term sheet from a, a really good investor, but someone back in Europe. You know, it was sad for me because like, I was so excited about them and I just thought like, of course they'll be able to raise money in New York City, right?

[00:36:17] So, that company, has now gone on to do incredible things and is the leader, in blockchain analytics. I have, through,various mechanisms, basically returned our fund. You know, I've had to think about this many, many times, through that investment, which is still going strong.

[00:36:35] I tell you that story because it was just such a good clarifying, experience for me. It took a long time. I'm conflating these things, but it's like, from not getting a term sheet to, being a unicorn times, times three, that was five, five or six years.

[00:36:50] Right. So it did take a long time, but like when it actually happened, they became like the clear leader in the space and, anything can still happen, but the company is going strong.

[00:36:59] the thing [00:37:00] that, it just solidified for me was. This is at the early stage. It is about finding people and anyone that tells you that any of these other things matter?

[00:37:11] Like, what their product is and what their TAM is and all of that. it's just an excuse to say no, that they just don't believe in the founder. So just like call it what it is. And that's fine. It's not, I mean, it's not bad not to believe, like we say no a hundred times a day, right?

[00:37:28] And, but what we're really saying is that we don't believe in you. And I think that that's like a hard thing, for founders to hear, for the ecosystem, for anyone to discuss out loud. And so we kind of couch it in these other things.

[00:37:39] But it was just a good reminder of

[00:37:40] A, if you have conviction, stick to your guns even if everyone tells you you're wrong or crazy and then

[00:37:45] B, if you have your framework, stick to your framework, right? And this person like hit all those buttons in spades, and it just took a long time.

[00:37:53] Angel invest and chill? What signals help assess your investment early?
---

[00:37:53] Aamir: When you mentioned the framework, I think you're talking about the three bullet points of a founder.

[00:37:58] You also referenced, [00:38:00] something around the first six months, they were hitting the checkpoints you wanted to see, could you share a little bit about that? I think the folks listening sometimes wonder, do I just put a check in and then I wait five, six, seven, 10 years and hope for things to work out?

[00:38:13] Or are there intermediate checkpoints along the way that you see as being valuable and like, since you mentioned the six months thing, what, what were those?

[00:38:19] Jenny: That's the last framework of the fast founder, right? So it was like, they had to do an impossible thing, which was they had to sell a huge bank that had been around for hundreds of years, a new technology, and we know how hard it is to do anything with big companies now try to do that with a bank and a regulated industry and, they were able to do it. Like just in a few months.

[00:38:40] So it was like every time that I checked in with them, it was like, yep, we signed those guys and yep, now our pipeline's this. And it was just like this incredible momentum, even though it was super early and almost pre revenue, but it was like just every single time I checked in with them, they had made something happen and sometimes that can be, traction as we think about it, [00:39:00] but sometimes it's hey, like we, got this incredible team member to come and we don't have any money. So, we're just giving them equity. Like that can be an amazing thing. So it's, it's just what I call, instead of traction, I call it momentum. And you can really feel it in a business when a business has momentum.

[00:39:14] It's not just about, the customers. It's just about kind of the whole thing. So I really just felt that it felt like this kind of motor was going and nothing was gonna like turn it off.

[00:39:26] How Jenny seed invests and then helps with future fundraising
---

[00:39:26] Aamir: Can you share a little bit on this front, like what the subsequent cycles look like? So you came in at the seed round. They ended up getting an investment from the European fund. Like how far apart was that? And like what, what kept going from there?

[00:39:39] Jenny: Yeah. So I came in at the pre seed, then let's call it seed happened maybe a year later. And then, it took a few years to build.

[00:39:47] So I don't think they went and raised a series A for a few years after that. But then they got, one of the best series A investors. And then what was funny was like folks who passed called me and were like, Hey Jenny, why didn't you show me this deal? I was like, dude, [00:40:00] check your email from five years ago, right?

[00:40:03] Because like once, a top investor invests, then everyone is like, wait, how did we miss that? And like, I want in. So it was really funny cause I did shop this company around quite a bit. And just people weren't as excited about it, but when you have a good lead at the A, who's putting in a big amount of money, then they get more excited about it.

[00:40:20] So yeah, by the A, like they were pretty set. They had, pretty much a big leap, between them and any competitors. They raised a large round. Sometimes capital does give you an advantage in that you can scoop up talent and you can move faster. I think obviously that got a little extreme in 2020 and 2021, but this was before that.

[00:40:41] And things went fast after that between the A's, the B's and the C's. So

[00:40:46] Using secondaries to generate returns and lower risk
---

[00:40:46] Jenny: You said a couple of times that this particular investment has been able to return money to the fund. Has the company had an exit? And if not, tell me a bit about how pre seed investor thinks about exits along the way, Yeah, so [00:41:00] there are these things called secondaries and if you're an early stage investor, you gotta get to know them and they're really complicated because on the one hand, in 2020 and 2021, when I've sold shares, of any of my companies, I got a lot of pushback, like, there's this whole adage, let your winners ride.

[00:41:17] Like you should keep those positions because those are your outliers. Those are the ones that are going to make the power lawcome true in your fund. I have always had a different point of view, maybe coming from like a finance background or maybe my years at Techstars.

[00:41:32] Which is my job is really to return money to LPs. And so, when I have opportunities to take money off the table and I feel that, the company is in a good place, I'm gonna do that in a systematic way. So I don't sell all my shares, but I take a small amount and I start, taking money off the table.

[00:41:52] Kind of the same way that I encourage people to do, like dollar cost averaging when they're, starting to invest or starting to [00:42:00] invest in things like Bitcoin or whatnot. We're not spending our days, like understanding the public market. So like why, why? You know, why try to compete with those people.

[00:42:09] So that's how I think about private companies as well. My job is to return money to LPs. And so if I can do that, before there's an exit, which is, an M& A or an IPO. And I think it makes sense for everyone, then I do that.

[00:42:23] And so over the last, call it five, six years when I've had those opportunities and some companies that have become unicorns, I've always tried to do that.

[00:42:31] Shaherose: Is there a sweet spot, in terms of stage that you pause and say, okay, they've reached B, C, D, E that you look at, like, or is it a return amount that you know you can reach? What's the trigger for you?

[00:42:45] Jenny: Yeah. I'm probably not the best person to go into a really, specific framework because like the truth is I'm just learning as well, right?

[00:42:53] It takes a long time to get to the point where you have companies. But you know, we're not selling shares at the A's and the B's right?[00:43:00] We are in this for the long term, we need the outsized returns, we believe in these entrepreneurs. But there are opportunities once the company has, you know, reached an inflection point. for us it's something around, you know, a billion dollar valuation. But it's not a hard and fast number, and we're not, you know, doing a deep analysis on the company to figure that out. We're kind of looking at our position, looking at the longevity of our fund. there's so many different factors, it's very personal, but I, the thing I want to get across is that a lot of people look down on me for doing that, you know, for many years. Now they think I'm really smart because, because a lot of their investments aren't worth what they thought they were, but, you have to come up with an investment strategy that, that works for you.

[00:43:46] Shaherose: And it's always good to adjust, but at the same time, even if people think you're crazy or the market's changing and all these things, like sticking to what you believe, I think makes a lot of sense. I think it's great for early stage investors to hear that [00:44:00] other investors do have and do think about this, especially as we continue to be in a market where IPOs are few and far between and government seems to be getting involved whenever there's big M& A opportunities.

[00:44:13] It's really enlightening for people to hear that there are exits along the road that someone can consider.

[00:44:18] Aamir:

[00:44:18] Pre-Seed fund return profiles - what's the goal and reality?
---

[00:44:18] Aamir: As one of the two GPs at Everywhere, how do you think about the return profile for your portfolio? I always feel like I'm hearing, Oh, we want to be in the top quartile for the Cambridge Associates, yearly rankings.

[00:44:29] When you think about where you are and where Everywhere is, do you think that your thought process around the return profile is the same as other pre seed and seed funds, like the, the, the space that you play in? Do you think you're operating the same way, trying to get to a 3X return and hoping to end and end up in the top quartile?

[00:44:45] Jenny: Yes, because our LPs are giving us money and they're locking it up for a long period of time. And so, if we can't produce outsized returns, which I would say are more than a 3x at the pre seed, then we're just not doing our job.

[00:44:58] But what we strive [00:45:00] for is to have, a fund that can return multiples of capital in a certain amount of time. And so when we make an investment, we are thinking about, underwriting it to the return of the fund. Do we think that this investment can return the fund?

[00:45:14] Now, what's good about being a small fund is that we can actually produce really great returns and not have, all unicorns, decacorns, et cetera, like the big funds. Like they rely on that, whereas we don't.

[00:45:28] So to give you an example, we had a company they were around for maybe four and a half years.

[00:45:32] So relatively quick when you're investing in pre seed, they were acquired by a strategic like last year or so as one of our scout checks, we'd put in 50 K. And we got a 16 X on that and it returned a big chunk of our fund. It didn't return the fund, but it returned a big chunk.

[00:45:48] That was one 50 K check because we were in at a very low valuation and they had, a great M&A. So it doesn't mean if it, it doesn't return the fund it was a loser where, maybe a larger fund would [00:46:00] have to profile it that way, because for us to have something after four years that returns, more than a third is actually a great outcome for us.

[00:46:07] So I think, a lot of it depends on AUM. It just depends how big your fund is. And that determines your strategy to a certain extent.

[00:46:14] Jenny and Everywhere seed invest in the "table stakes economy"
---

[00:46:14] Aamir: So Jenny, thanks for talking us through your background and the history of some of your investing.

[00:46:18] Jenny: We'd love to hear more about Everywhere today. Yeah. So, we're a pre seed fund. And as we mentioned, we, are rather high volume cause we want to be the first check into those small rounds. The average round size that we're investing in is anywhere from 750 to 2 million. And we're writing about 250K into those rounds.

[00:46:37] We're generalists, but we really focus on three verticals that we call the table stakes economy, which stretch across, the future of money, the future of health and the future of work.

[00:46:48] So very broad categories. And we, we kind of sneak a lot of things in there.

[00:46:52] And what's unique about us is that our capital comes from other founders and operators. We have 500 of them that are LPs and, [00:47:00] they're the folks that help us with top of the funnel, all the deal flow that comes to us.

[00:47:04] They help us with the diligence and ultimately they help us support such a large portfolio. So that's a little bit about Everywhere.

[00:47:11] And then I'd say the last thing is the name suggest is that, we are not constrained by geography. And so, you know, we invest in places like Africa and LatAm and Europe and of course the US.

[00:47:21] What is the difference between pre-seed and seed startup investment rounds?
---

[00:47:21] Aamir: So you, you've mentioned pre seed a few times and, also seed. So how do you differentiate between the two? right now you said, you focus on pre seed. In some places it seems like those two are just co mingled together and the word means whatever it needs to mean. In some places, like actual locations around the world, there's a clear difference between the two.

[00:47:39] So how do you look at it? what to you is pre seed?

[00:47:41] Jenny: Yeah, the way that we define it is the first institutional round of capital, and those rounds are, you know, Between about 500 and two million.

[00:47:51] So we believe when people go out and raise, you know, the $3 million round, and technically it is their first round of capital, those are really like seed deals.[00:48:00] Most of the investors around the table are slightly larger. They're writing maybe a $1.5 million check into 3 million.

[00:48:06] So, you know, technically that might be pre-seed. In our mind we kind of call that seed. So first institutional capital, but really modest rounds, you know, 500 to about 2 million. But to your point, I mean, it's. Anyone's guess, right? these are terms and they change all the time.

[00:48:23] They're somewhat fungible. So we kind of go with the flow. I think, as you mentioned in different locations, something that we might call a pre-seed here, might be a seed, so we don't get too hung up on those terms. And I think, even geographies in the U. S. I had someone recently tell me they were raising like a 4 million dollar Series A and they were based, in the South and I noted to them that, they could probably talk to seed investors in New York because that was the average seed round, I think is three and a half million, on the coast.

[00:48:52] So lots of confusion, but we, we kind of stick with our definition.

[00:48:56]

[00:48:56] Does valuation discipline matter for early angel and seed investors?
---

[00:48:56] Aamir: How about when it comes to valuation, it seems like 10 million is a magic number for [00:49:00] you. Like, how do you think about this now? Is that still the number you're dealing with? Do you feel like that's fair for pre seed?

[00:49:06] Jenny: Lots of rules are meant to be broken, but, one of the things that we're good about is discipline. And so, even during 2020, 2021, we set a 10 million cap for ourselves and we stuck with it, right? Which, Yeah. Meant we passed on a lot of deals that we loved , and there's a lot of, discussion whether that's the right strategy or not.

[00:49:25] Right. Should you be in and just be chasing the best companies regardless of valuation? You know, we have found in our model that having price discipline when you write a small check, moves the needle for us. And so I don't believe in venture, there's one right answer. Many people can have, different strategies.

[00:49:41] What works for us is that 10 million cap. But I mean, we have companies, we actually just did one this week that, was raising on a 5 million and, you know, sometimes we see them at 15. So, we look across the spectrum, but I'd say, 10 is about our cap.

[00:49:55] Aamir: I've had friends tell me I'm an idiot for thinking about valuation at all at the pre seed [00:50:00] stage, right? Like you'll see YC companies.

[00:50:02] Jenny: Yeah, that's I mean a very West Coast approach. And I think it can work like, listen, if you're in, 10 unicorns and you got in, at 50 million valuation, like you can do great. I think a lot of that comes down to timing the market.

[00:50:17] So you're, you're really relying on that. Your valuation at entry point is less important than on exit, you know what I mean? if you get in at a 50 and the company exits for 200, like actually. You know, potentially with the dilution, like it's not that great. If you get in at 50 and they exited a billion, you would have been an idiot not to do it at the 50, right?

[00:50:37] So, a lot of it is where do you underwrite the exit as opposed to the entry? And I mean, anyone knows, but if you believe that this group is building a multi billion dollar company that, that literally can exit for that. Then maybe valuation is less important.

[00:50:53] Shaherose: And isn't this also influenced by how much money you can write into that round, right? Like a [00:51:00] small check size at a high valuation, is that a big influence for you all? Cause you're not putting in a million into the round, you're often putting in 250.

[00:51:08] Jenny: So is it check size that leads to this discipline? Because, you know, you do want to find deals that will return the fund. Yeah. We're a very small part of the cap table, so we just have to be, very disciplined, because we don't write follow on checks. As I mentioned, we do everything through SPVs. And so with that, we have to, make sure with such a small ownership that we're getting in an attractive valuation so that we can have a company that exits, 16 X with one 50K check and that returns a third of our fund.

[00:51:36] It's we need to be able to, to have those types. Whereas if you had a billion dollar fund, you can't write a 50K check cause that just doesn't move the needle.

[00:51:44]

[00:51:44] Jenny's latest seed investment: Fora comes out of stealth
---

[00:51:44] Jenny: We'd love to hear about an investment you've made recently. Yeah, so in the kind of future of work bucket, actually this week they just announced they'd been in stealth and they're a company called Fora. And so they're doing what they're calling an ERM, executive relationship [00:52:00] management platform, to help C suite decision makers, using AI and automation.

[00:52:05] But the fun part about this company is that, I think it was, gosh, I don't even know, maybe 2009. I mean, like a really long time ago, there was this coworking space in New York called Dogpatch Labs.

[00:52:17] And I was running a startup and I was like one of the first tenants in this and the guy who sat behind me was this guy Joe and he started this, this recruiting company, this automated recruiting and it was, it was called Local Bacon and which I just like, I mean, who starts a company called Local Bacon? How can you not love that guy?

[00:52:36] You know, New York was like really coming alive at that time. And it was a really fun time to be building. And I had this guy running Local Bacon behind me.

[00:52:43] Fun fact about that. I think his investors made him change the name. They're like, we love this company. We're going to invest, but like, we can't invest in something called Local Bacon. So the a company became, Jibe and he ended up running that for about a decade. So, I mean, amazing story, great acquisition, stayed with the company. [00:53:00] And, yeah, Joe and I reconnected as he was getting ready to start his new company.

[00:53:05] And I just loved the idea. All I hear about is just how like corporate people are so inundated with information. And what if you could be a fly on the wall as an executive in all the meetings and then get like a synthesized breakdown of like what's happening across your organization. And I thought, wow, this could be, transformative because when you talk to people at big companies, all they complain about is I'm in meetings all day long.

[00:53:28] What if you didn't need to be in meetings but you could get the intel. I just loved the concept, and and obviously loved Mr. Local Bacon and it was really fun to be able to support him. I mean, I was a founder last time I couldn't have written a check. So it was very full-circle to be able to support him. he just came out of a stealth this week and, you know, really excited for them.

[00:53:47] Jenny's one trick to become better at startup investing
---

[00:53:47] Shaherose: So how do you get better as an investor besides continuing to invest? you think about folks like myself and Aamir who are in the game for a few years now, but you've got more than a decade of [00:54:00] experience.

[00:54:00] What do you do to keep getting better at the game?

[00:54:03] Jenny: We do a lot of retros, where we, we try to keep good records of, what we passed on. We like save decks. We look at them, we try to review where we were, what we thought, what we were thinking. We take a lot of notes. Retros are, are really good.

[00:54:17] And then I think like you have to have a retro with yourself. every few years you need to sit down and be like, okay, what were my biases? Like, where were my blind sites? And like. How do I, break through that? And I think that's like a very personal thing you have with yourself.

[00:54:33] So like the data can help you, but ultimately you have to make a decision as a person of do I want to change my point of view? And so I have those conversations with myself, you know, every year or so. I do like a little retro of like, okay, what have I learned? And, I think, what's really helpful is if you have a great co founder or a thought partner, or multiple ones when you're running a fund, I think that's really helpful.

[00:54:55] So even if you're like a solo GP, having some thought partners, some [00:55:00] people that you're always bouncing things off is great. And so like my co founder. We just think about things like very differently and it's so fun to hear his take on something. We always joke like I get off a call with a founder and I'm like immediately like it's a pass and he gets off and this is funny because I'm like an optimist and then he gets off the call and like he's so excited. And then over the next week, the wheels turn and I get more excited cause like I start doing more research. I spend more time with the founder. So I dial up and then he dials down. And just like, it naturally happens that way. It's hilarious.

[00:55:32] So we have the same reaction after every call where I'm like, Oh, Scott loved it. And I hated it. I was more skeptical, right? Cause that's a little bit my nature. And then somehow we end up in like the same spot, which is fun.

[00:55:43]

[00:55:43] How Jenny partners with Scott to make investment decisions
---

[00:55:43] Shaherose: Are the two of you often looking at the same thing? Cause you said you're both very different. when you do come to the table, are you more focused on the people? Is he more focused on something else?

[00:55:52] Jenny: Well, one thing I think is important is we are a conviction based fund, not consensus.

[00:55:57] So, we're not looking to agree. [00:56:00] We're looking for one person to bang the table and say, I have to do this deal. So, yeah, I just want to make that clear because I wasn't saying that we have to get to the same place at all.

[00:56:09] But, it is kind of funny how we often do, because we do agree quite a bit. But I think when you have a long partnership, you have, a lot of trust and mutual respect. And so, when I want to do a deal, his job is really to support me to get the information that I need to get to help me get to conviction, even if he can't, if that makes sense.

[00:56:29] So we feel like that's, that's a good, that's a good sign of a good partnership. We're not going to agree. We're not going to get to conviction on the same things. But you know, does he need me to do some reference calls or help or, we often think about, in our network, because those folks are helping us with diligence.

[00:56:46] So like, he'll love a deal. I might be lukewarm on it, but I'll be like, okay. Here are the five people in our network that we should talk to, or you should talk to, right, to understand it. So we work on deals very collaboratively, but we don't make decisions [00:57:00] together.

[00:57:00] Jenny's hot takes
---

[00:57:00] Shaherose: Rapid fire. Who is the First Funder that you admire?

[00:57:05] Jenny: I mean since I just talked him up, I'm gonna say my co founder Scott.

[00:57:08] Shaherose: Yeah. Okay. Is there a book or a piece of media that's had a huge impact on how you invest today?

[00:57:16] Jenny: I mean, honestly, I read that book Venture Deals a million times and I like still read it. It's so good.

[00:57:21] Shaherose: Love it. Zoom, phone, or in person meetings?

[00:57:26] Jenny: Zoom, it's just like so efficient for, you're talking about first meeting Zoom. Yeah. First meeting Zoom for sure.

[00:57:33] Shaherose:

[00:57:33] What's your social media platform of choice and why?

[00:57:37] Jenny: Hmm. I mean, it's funny because like LinkedIn, I definitely am like more professional and talk about like my, like our fund and all that stuff.

[00:57:46] And then Twitter, I'm definitely more spicy. So it depends if you want spicy Jenny, check me out on Twitter. If you want like more buttoned up, like, mom approved, definitely LinkedIn.

[00:57:57] Shaherose: My favorite is Spicy Jenny, the person [00:58:00] I know and love who has just gotten better with time, Thank you, Jenny. This was super, super fun to hear how you've been growing and changing and investing to where you are today. So thanks for taking the time.

[00:58:12] Aamir: Where can people find you? Where can people go next to learn more about you and everywhere?

[00:58:16] Jenny: Yeah, so you can email me at j@everywhere.Vc or follow me on Twitter.

[00:58:21] Takeaways from the interview
---

[00:58:21] Shaherose: Thank you, Jenny, for coming on. It was so great to really get into the details of your journey from the beginning.

[00:58:28] So I thought we could do a quick recap of some of the points that we walked away with from the conversation.

[00:58:35] The importance of knowing founders over time, even though she's making a lot of investments in a short amount of time, it's not that she only knows someone for a week, often these are relationships that she's had over years.

[00:58:47] Sometimes repeat founders show up in her life. This idea that you want to get to know someone over time, track their actions, use that as an understanding and data to build your picture of who this person is, which is like the main [00:59:00] point of all this is you're investing in people at the earliest stage.

[00:59:03] Aamir: One thing I questioned about her discussion is how do you really maintain that relationship over time?

[00:59:07] There was a collegial relationship that she had with the founder of Local Bacon, that led her investment last week. How do you maintain that over time? It's advice that everyone has given. "Oh, keep everyone warm. Talk to them a lot. Be, be friends so they'll think of you."

[00:59:22] And I just don't know how you do that.

[00:59:25] Like, I'm still trying to understand how do you do that over so many different people over time to where the other side sees you as a resource when the time comes.

[00:59:33] Is it just that you're top of mind because of recency bias? Or is there some other delicate dance in relationship building that happens that I'm just not good at?

[00:59:42] I wonder about that a lot when I hear stories like Jenny's.

[00:59:46] Shaherose: I agree because when you think about 300 portfolio companies, and her advice to especially angels was stay in touch. I too was like, how, when you have that many portfolio companies? Is there a systematic approach to [01:00:00] this or a tool that helps you do this? Because in your brain, according to Dunbar's number, you can maintain 150, quote unquote close relationships.

[01:00:11] She did mention a great hack to all this which is when she is the first to invest or one of the first to invest in a company she invites trusted co-investors. So that as a, class, as a community, You know that you are in connection with other investors who hopefully will have similar thoughts when challenging times arise. I intuitively started to do that in fact, I invited Jenny to one of my most recent deals. And. What I noticed for myself is that means. There's someone I can go to, to compare notes with, but most importantly, we're there to protect each other because you know, we're kind of in this together in this collaborative, early stage game.

[01:00:54] So. You know, that's one thing that I think, is an awesome hack,

[01:00:57] Another point that we talked about that [01:01:00] stuck with me was that, there are thoughtful and systematic ways to return money to your LPs along the way before an official, M& A or IPO. And I was familiar with the idea of secondaries, but I really loved that she talked about it so openly, cause I don't know that all VCs do talk about it.

[01:01:22] Keep riding your winners. I thought it was great to hear a very tactical answer to someone who systematically will take some money off the table along the journey. Well, what did you think about, that conversation?

[01:01:31] Aamir: I lived that as someone on the founder side of the cap table.

[01:01:35] it wasn't always as part of a strategic route of returning money to the investors. It seemed like it was sometimes just related to a project that the angel wanted to fund instead. But that makes a lot of sense. I, it made me feel more comfortable as an angel that I don't necessarily have to wait 10 years and pray that they get all the way to an IPO.

[01:01:58] If there's a way for me [01:02:00] to take money out during a secondary that gets me back some amount of cash that I can use to then fund other investments or even just to fund a project of my own, I feel like I'm more likely now to try that.

[01:02:12] Shaherose: This idea too, for a fund of her size,

[01:02:14] for a fund size of 25 million, It's, it's worth paying attention to that small funds behave differently than large funds. And what I walked away with is as a:

[01:02:24] A) small fund and

[01:02:26] B) fund that also, a fund that also writes, minority checks into companies there's very specific strategies and actions that these funds take to make things right for their LPs.

[01:02:38] Aamir: That was one of my favorite takeaways, actually. I loved that discussion around how pre seed funds have to go for higher than 3x multiples to make the numbers actually work out. And that this means that you're going to, make a lot of investments at the earlier stages, And go for lower valuations and hope for the best.

[01:02:56] It actually made me want to be an LP in [01:03:00] more small funds that I like the upside, models that they have compared to the funds that are saying let's raise and invest in 10 companies over the next two years.

[01:03:10] Shaherose: Yeah, exactly. And I think that dovetails nicely into one of the other points on valuation discipline. For a small fund that is actually quite critical that you, given the check size that's going in, et cetera, that you are coming in at a reasonable valuation. And so her comment on, oh, that West Coast approach, of, valuation doesn't matter.

[01:03:30] Well, I think again,fund size dictates strategy to some degree. And if your fund size is 25 million, then it makes sense that valuation discipline is part of the strategy.

[01:03:42] Aamir: I still don't know how to parse that in the context of investing in YC companies at 20

[01:03:47] seed investment, because,

[01:03:49] To kind of go along with something Arjun pointed out in the last discussion, that going from zero to one is hard, so how do you evaluate in your head that going from [01:04:00] zero to one means, oh, this is a, 500 million company. Or the, oh this is a multibillion dollar company.

[01:04:08] Can you make that call at the beginning? I don't know. So how do you really end up, segmenting companies into those types of buckets? It's really difficult. And I think that's part of the art of being an angel investor or a venture investor in general.

[01:04:23] It's something to still figure out. I'm hoping we'll learn from other investors, and see how they think about this in the coming episodes as well.

[01:04:29] So like, I liked Jenny's description of the three founder traits. I think that is something that I ended up looking for as well, and it is really hard to assess, so that's where her ability to talk to founders over a longer extended period of time is really useful to hear about.

[01:04:43] The part that that really went well with was her description of, momentum versus traction. And she, she's a hundred percent right. If I look at the investments I've made that have all been terrible, yeah, there's no momentum out the gate. You can make a call within just a few weeks, if not six months, on [01:05:00] whether a founding team has momentum at all.

[01:05:03] Like, I can't tell you the number of companies where it was nothing would happen for the first year. It was always, Oh, we're working on this, we're working on this. And they would never come back with information or data, any real world hard knocks. Instead it was, we're thinking about, we're thinking about, and I think thinking is not momentum.

[01:05:22] Right? You need some sort of real world impact, even if it's bad results, that's better than nothing. And so I, I really resonated with that and I thought that, that, that's a great lesson and it shows that yes, you can have some sort of strong signal within the first year and you don't have to wait 10 years to find out whether your investment worked out.

[01:05:40] Shaherose: Yeah. I've noticed that too, that when I talk to founders who even within a week, you have that first meeting and then you come back and I like to always start the meeting with do you have any updates before we begin the conversation? And that's the opportunity for them to show some momentum.

[01:05:54] I just got off a call right before this, and the first thing he brought up is, Oh, my co founder just agreed to join [01:06:00] Oh, also, you know, we got three more angels so it's Something we pay attention to as investors,

[01:06:05] Even in the shorter periods of time, what kind of momentum are you, showing us so that it, becomes concrete,

[01:06:11] Aamir: The other part that stuck out to me is she said the quiet part out loud, that if people are complaining about the market size or other attributes of your company, they're probably just saying they don't trust you as a founder. I, I think I lived part of that. And I also think that she's right.

[01:06:26] Having been on the investor side of the table, if, if you're not buying the story, the story came from the founder. So you're saying that you don't believe what they're saying and that's ultimately a reflection on them.

[01:06:35] That's hard. It's harsh. And there are ways that founders can get better at that is the good news.

[01:06:40] Shaherose: Harsh and true.

[01:06:42] Aamir: Let's wrap on that point. Talk to you soon.

[01:06:44] Shaherose: Thanks for listening. We'd love your feedback and suggestions on topics and guests. You can find us on Twitter/ X, @shaherose and @avirani.

[01:06:56] Aamir: Subscribe to our newsletter to get behind the scenes access, learn more about the [01:07:00] guests, and receive the key takeaways from each episode. You can find it at firstfunderspod.com/newsletter.

[01:07:06] Shaherose: And don't forget to subscribe and share with your friends at firstfunderspod.com/subscribe.