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0:41

I'm Will Lucas and this is Black Tech, Green

0:43

Money. Ann

0:45

Samuels is founder and managing partner

0:47

at Collid Capitol, the sixty six

0:50

million dollar fund so Far, which

0:52

is the first VC fund simultaneously

0:54

backed by Amazon, Alphabet and

0:56

Twitter. He's also co

0:58

founder and served as O at Blavity,

1:01

the largest global black media company for millennials

1:04

in gen z and afro Tech, the

1:06

largest black tech conference in the world. He

1:09

began his career as a spoken word artist before

1:11

working at Bane and Co as a strategy

1:13

consultant and tell A Sign as a product manager.

1:17

Iaran has had a successful professional career,

1:19

and I wonder how he tells the story to limited

1:21

partners, the people who put money into

1:23

VC funds, how his career as

1:25

an operator signals that he might win

1:28

at investing their money.

1:29

I think that there's.

1:31

Many paths that people

1:33

take in order to break into

1:35

venture capital. I

1:37

think there's there's three primary paths

1:40

that people take. Which is one

1:42

being a former operator, which is which is my

1:44

path and having to dig into that a little bit. So

1:47

this is either you've you founded a company

1:50

or you rose through the ranks to become

1:52

a senior operator at a company. You learned

1:54

how to how to do the company building

1:56

fundamentals, and then ultimately that

1:58

teaches you how to identify that type

2:00

of talent, that type of support for other

2:03

companies. Right, So I think that's path number one,

2:06

and how do people break into venture Path

2:08

number two is you go through the investor

2:10

funnel. So oftentimes people

2:12

will work in investment banking, work in private equity,

2:15

maybe work at you know some smaller

2:17

venture capital shops and then worked their way up to the

2:20

larger the larger firms and then and then maybe

2:22

one day start their own, right, but you

2:24

kind of have the.

2:25

Career as an investor.

2:26

And I think number three is I

2:29

think actually the most common version

2:31

of becoming a venture capital venture

2:34

capital practitioner, which is that you are

2:37

just born rich.

2:38

And you just have So that's the

2:40

most that's the most common.

2:43

That's actually how the industry, that's how

2:45

the industry got started. The industry

2:47

got started as a cottage industry where

2:49

wealthy people effectively just made

2:52

angel investments as long

2:54

shot bets that had very

2:56

low probability of success.

2:59

But if they hit, they hit super

3:01

big.

3:01

And it's it's only over

3:04

the last you know, twenty to

3:06

thirty years that

3:08

that venture capital as an industry

3:10

has really started to

3:13

solidify. And so I

3:16

say that because I think it's important to remember

3:19

that for the for the majority

3:21

of the history of venture capital, this

3:23

was a game that that rich people played

3:26

by taking taking huge bets that

3:29

were of less consequence because

3:31

they could they could afford to lose the money that they

3:33

were playing with.

3:35

And it's only it's only recently that that.

3:37

The that the asset class has become

3:39

formalized, and so uh

3:41

so, if you want to become a venture capitalist, the easiest

3:43

way to do that is to just be rich,

3:46

uh for for those of us, for

3:49

those of us that don't have that option, I

3:51

recommend one of the former two paths, which

3:54

is to be to be an operator or

3:56

to be or to be an investor. And and

3:58

my my way was was to be an operation. So now

4:00

that now that we're grounded, I

4:02

had a I had

4:05

I had a I had a great career path that that led

4:07

me to this moment.

4:09

And you know, and I and.

4:10

I clipped from all of my experiences from from

4:12

being a spoken word artist to being a

4:14

consultant, to being a product manager to

4:16

being a CEO. But

4:19

but I think that I think it's important to say

4:21

for for all your listeners, because there might be people that

4:23

that walk different paths, that that want to find a

4:25

way to get into venture and you

4:27

don't have to just do it my way.

4:29

Yeah, that I want to talk about that first

4:31

way for a second. The people who are on a

4:34

career trajectory and they say, you know what,

4:36

I want to find my way here. They're an operator

4:38

today what are the things along

4:40

the operational journey that

4:43

are necessary to be

4:45

good at this till

4:47

I have learned?

4:48

Yeah? Yeah, yeah, I mean

4:50

it's a good question. In many ways, I'm

4:52

still figuring it out myself. The

4:55

hard thing about about venture

4:57

and a way that it's very distinct from being

4:59

an operator, is the feedback loops

5:01

are way way longer. So you

5:04

know, when I was COO at Blavity,

5:07

you know, I put in a solid week's worth Monday,

5:10

Tuesday, Wednesday, Thursday, Friday. On Friday

5:12

afternoon, you could walk into my office

5:14

and ask me straight up, Hey, Aaron,

5:16

did you do a good job this week?

5:19

Yes?

5:19

Or no? And I could look you dead in the

5:21

eye and give you an honest answer,

5:24

Yeah, I crushed it this week. This

5:26

week not so well. It didn't go as

5:28

well. In the world of venture

5:31

capital. You don't have that,

5:33

yeah, you know at the end of the year, at the end of the week on

5:35

Friday, Yes me, yeah, yes me?

5:37

How well I did? I have no, I have no idea, and

5:39

I won't I won't know for as you pointed

5:42

pointed out, I won't know for seven to ten

5:44

years.

5:45

If I'm If I'm good at this, you're

5:48

making very very very

5:50

long.

5:50

Term, high risk bets.

5:52

And you know, the successful

5:55

firms are going to be the firms that

5:57

invest in twenty to fifty company

6:00

and have one or two huge

6:03

winners. Even if the rest completely

6:06

go to zero, it's hard to call

6:08

it. And so the things

6:10

that you do on your journey as an

6:12

operator in theory should

6:14

help you do one of two things, which is, either

6:17

help you become a better picker right,

6:20

help you help you pick winners, help you identify

6:23

the characteristics the attributes of founders,

6:25

of markets, of operating teams,

6:28

of business model ideas that will help

6:30

increase the likelihood that.

6:31

You that you pick a winner. And

6:33

two learning how to support

6:36

your portfolio.

6:37

The things that you do post investment, which

6:40

is where I think operators really shine, is

6:43

you know, after you've made the financial

6:45

commitment to a company, what else can you

6:48

do?

6:48

Can you help them build their CRM?

6:50

Can you connect them to operational

6:53

leaders, can you connect them to customers,

6:55

can you connect them to hires?

6:57

And that not only.

6:58

Will help support the poor folio company

7:00

after you've invested, but if companies

7:03

believe that you're going to be able to provide

7:05

that type of support, it might make

7:07

you more attractive as a firm to

7:10

begin with, which might then help you select

7:13

or help you have access to better top of funnel

7:16

for the investments that you make.

7:18

Now you've raised some really interesting questions

7:20

for me. And I've heard plenty of black

7:23

founders on this podcast, and many

7:25

who are wildly successful talk

7:27

about how there are so many vcs

7:29

who want to be in on their deals, and we

7:31

always we tend to because there are so few

7:34

of us. There's a growing number,

7:37

but so few still that you know,

7:39

just want anybody to give them a check. But

7:41

there's a certain segment of black

7:43

founders who have checks thrown at them

7:46

and they can get they get to be selective, and

7:48

so then the VC is then ultimately

7:50

trying to pitch themselves. So can you talk about what

7:53

it's like to be on both sides of that,

7:55

to where you're on the blavity side where people want to give

7:57

you money, then you're on the VC tie where you might

8:00

have to pitch yourself to some really

8:02

really interesting startups.

8:05

Yeah, I mean, look, this this

8:07

game, if anything, will, will help

8:09

keep you humble.

8:12

And look, I

8:14

think I think that's a good thing.

8:15

Like it for in some way you're

8:18

kind of always you're always pitching

8:20

yourself. You're always you're always selling

8:22

something. And I think, you know, the

8:24

older that I've gotten, the more that I've realized that

8:26

when you make it to the top of any field,

8:30

ultimately you're a seller.

8:32

You know.

8:33

I have a good friend of mine, he's

8:35

a climate scientist with a PhD

8:37

from Harvard.

8:38

I ask him how he spends most of his days.

8:41

He spends his days right in grants, which

8:44

you know, it means fundraising, which means

8:46

he's raising money for, you know,

8:48

to support the projects. I think that's the same

8:50

thing if you become a great founder, become a great

8:53

investor. At the end of the day, once you get to the top,

8:56

you're raising money, which means that you're selling yourself.

8:58

You're pitching yourself, and you're pitching yourself to as

9:00

a VC, you're pitching yourself to you know, your

9:02

LPs to invest in your fund, just

9:04

as much as you're pitching yourself to the

9:06

founders that you potentially

9:08

want to invest in. And so what it means is

9:11

that you can't take anything. You can't take

9:13

anything as a given, you can't take anything for granted. Understand

9:16

what your strengths are and you need to You

9:19

need to let the founders know why it's

9:21

going to be differentiated to receive

9:24

a check from you as opposed

9:26

to you know, any other lookalike,

9:28

you know, small emerging manager or you

9:30

know, they might be comparing you to a big box shop.

9:32

And then I need to convince them why taking

9:35

my money is better than taking money from

9:37

a twenty two billion dollar Silicon Valley,

9:40

you know based firm.

9:41

Yeah. I know you're very passionate

9:43

about your spoken word poetry,

9:45

and I wonder the connections

9:48

you might see if you can describe those for us

9:51

from that sort of creativity and

9:53

the business creativity that

9:55

you have to endure.

9:58

Yeah, I think I think of time my

10:01

time traveling as a as a performance poet.

10:04

For for about a decade I was, I was heavily

10:06

traveling around the country, and

10:10

I learned a lot about a lot about passion,

10:12

and a lot about kind of this this notion

10:15

in the in the poetry world that we

10:17

we we call speculative fiction,

10:20

uh, this idea of dreaming,

10:22

uh, dreaming a better world and writing

10:24

it into existence. And

10:27

I think that in many ways there are strong

10:29

commonalities between my favorite

10:31

artists and my favorite founders

10:34

in that both of them

10:37

are are dreaming a better

10:39

world, identifying a way that the world

10:41

can be happier, healthier,

10:43

more efficient, you know, but improved in

10:46

some way, and

10:48

and then building that and speaking it into

10:50

existence. If you can't, if you can't

10:52

dream it first, then then you can't

10:55

then build it. And for me, that

10:58

attribute of passion is

11:00

something that is probably the number

11:03

one characteristic that I look for in

11:05

founders. I'm looking for a founder

11:07

that is identified a hole

11:09

in the universe that they

11:12

uniquely are qualified to fill.

11:15

And I think that that's so important. You know,

11:17

as we mentioned earlier in the conversation, you

11:20

know, the feedback loop is long. You

11:22

know, it takes seven to

11:24

twelve years for a

11:26

venture backed startup to get to

11:29

exit. I

11:31

need to know that the

11:33

founder is going to be just as passionate on

11:36

year seven as they are on

11:39

year one. And that doesn't

11:41

happen if you're just in it for the money. It

11:43

doesn't happen if it's just a pet project

11:45

that you're doing in a classroom. It only

11:48

happens if you're obsessed with

11:50

the idea, if you're obsessed with the problem that you're trying to

11:52

solve and you really believe that you will make

11:54

the world a better place or at least a more interesting

11:57

place if you're able to execute.

12:00

You just spoke to something about you know, founders

12:02

who have you know, recognized the void

12:04

and they can something that they can uniquely feel

12:07

how dialed into the details

12:09

of what that future looks like are the

12:11

most successful founders, Like, can they talk

12:13

about the intricacies or just the concept?

12:17

No, No, they should be they should be really

12:20

dialed in.

12:21

You know, I think that that the best founders

12:23

that I've seen, they can they can paint you.

12:25

They can paint you a.

12:26

Very very detailed picture of what

12:28

the world will look like if their product,

12:31

service, business model, you

12:33

know, serves as a as a disruption

12:36

to the status quo.

12:38

To a VC. What do you need

12:40

to hear in those details that give you the confidence

12:43

say this, this lady, this guy

12:45

is going to go do it.

12:48

Yeah, I mean, I think there's a few things that I'm looking

12:50

for, so, you know, and this is true for a lot

12:52

of vcs, but you know, one

12:54

of the things that we first listen for is

12:57

is this problem a big enough problem

13:00

that if the founder succeeds, it

13:03

will create a billion dollar company. You

13:05

know, they might be they might be right about the problem,

13:07

and they could be super passionate, you know, about

13:09

it. But if it's a small problem, then

13:12

it doesn't necessarily return enough capital

13:14

for me or from my LP base for it to

13:17

move the needle. And that's that's kind of where we get into

13:19

the concept of is this a venture backable

13:21

company versus is it a small business

13:24

or a large business. That's a good idea,

13:26

but maybe not a great idea for a

13:28

venture because we need to have those

13:30

scaled returns. So, you know, firstus, is

13:32

this problem a big enough problem?

13:34

You know?

13:35

The second thing that I'm usually asking is

13:37

what about this founder's background

13:40

leads me to believe that they

13:42

are going to be able to execute on

13:44

this solution.

13:46

So they might be right that it's a great problem, and

13:48

it.

13:48

Would be awesome if somebody solved it, But

13:51

why do I believe that you're going to be able to do it? Have you have

13:53

you been thinking about this problem for the last fifteen

13:55

years? Have you have you worked on versions

13:57

or iterations of this problem over the course of your

13:59

career? Have you built prototypes, test

14:01

models? Do you have a PhD in the subject matter,

14:04

et cetera. It doesn't have to be all of those things.

14:06

But we're looking for some version of what

14:08

we call founder market fit, which

14:11

is, you know, do we believe that that this founder has,

14:13

you know, done the things in their career

14:15

to you know, to give you strong

14:18

indication that they'll be able to solve this problem.

14:20

Yeah?

14:21

I would, And you know, go

14:23

go ahead, no, no, go go ahead. No.

14:24

I was gonna say, like, because I know you invest at different

14:26

levels, you know, ced pre seed, like you know, one

14:28

hundred K to the three million.

14:31

I've read in my research and

14:33

I want you to speak to along the lines that you're

14:35

already on. But at how

14:37

deep are do you expecting them to be in at each

14:40

stage? So if I got to if I'm asking for

14:42

one hundred k, I'm assuming

14:44

that you're not expecting as much as you would

14:46

if I was asking for three million.

14:49

It's a good question, and

14:51

I would say, no, that that's that's not true.

14:55

You know, for me, the the

14:57

the dollar value doesn't correlate

15:00

the level of dialed.

15:02

In that I should see with the founder.

15:04

You know, if we're giving you money,

15:06

it's more correlated to what the stages

15:09

of the business and

15:11

making sure that you know that we own a

15:13

significant enough percentage of the company

15:16

to match with our portfolio construction.

15:19

But if you know, if we're

15:21

investing, we usually.

15:22

Don't go as low as one hundred k these days.

15:24

But say we're investing a five hundred k check

15:26

into a founder, you know, that oftentimes

15:29

means that the stage of the business is such

15:32

that if we invested more than

15:34

that, it would dilute the founders

15:36

too much. And so you know, we

15:38

typically don't want to take you know, more than

15:40

twelve percent ownership with the first

15:42

check. That being said, we'll

15:45

happily invest more at

15:48

the next round, you know, at a higher

15:50

evaluation if the company continues

15:52

to perform well. And

15:54

so you know, I would not

15:57

say that the amount of capital is correlated

15:59

to you know, to our conviction level

16:01

of the founder. Rather, it's just correlated

16:03

to the stage of the business and how how early

16:07

or later, how far along the kind of

16:09

business trajectory the companies the

16:12

company is.

16:13

Yeah, you spoke to something that I'd like to bring

16:15

back up, and you talked about the other

16:18

value you bring to a startup,

16:20

whether that's a network, whether that's you know, CRM

16:22

experience, et cetera. And can you speak

16:24

to holding that in one part

16:26

of your mind then this other idea which I'm

16:29

a believer of, And I remember recently

16:32

hearing a big finance guide who say it

16:34

it's as hard to build a

16:37

small successful business as it is

16:39

a big successful business. And

16:41

so if you think about that concept, most of us

16:43

don't think that way. They think, if I'm going to build,

16:45

you know, a one million dollar business, you

16:47

know that's going to be hard, but it's not going to be as hard

16:49

as I was trying to do one hundred million. But it's hard

16:52

as hard, you know. So it's

16:54

how big do you want to scale your heart? How much do

16:56

you want to take on? But can you speak to those concepts

16:59

of you know, what you believe you can bring

17:01

to a business and the level

17:03

of which effort you have to put in first, not

17:06

as much reward on the back much

17:08

on the outside, or I

17:10

might as well put my effort towards something that could be a bigger

17:13

windfall.

17:15

Yeah, no, I mean, I think it's it's a great point,

17:18

and I completely wholeheartedly agree with you.

17:20

Sometimes it's way harder to build a small business

17:22

and to build a big business, and I think the

17:24

reason that that is is, you know, the success

17:26

of the business isn't just about the outputs. It's

17:28

also about the inputs, right, So you

17:31

know, if I raise forty

17:33

million dollars and I create

17:35

a business that is a ten million

17:38

dollars a year business, you

17:40

know, some could say that that's successful,

17:42

but other people say, well, no, you raised forty to get

17:44

to ten.

17:45

You know that you've lost a bunch of money doing

17:47

that.

17:48

Versus, if I raise five million

17:50

dollars and I get to a ten

17:52

million dollar annual business, I

17:55

would consider that significantly

17:57

more successful. And so I

17:59

think not every everybody always factors in

18:01

both the inputs and the outputs

18:03

when they're looking at things. I think that that's especially

18:06

important when when you kind of observe

18:08

the world through a racial equity lens, because

18:12

you know, for the most part, black

18:14

founders, Latin founders, founders

18:18

who are women or have women on the founding team

18:21

oftentimes are significantly undercapitalized

18:25

relative to their straight white male peers.

18:28

And oftentimes they're judged based

18:30

on the same output metrics. So oftentimes

18:32

they'll say, oh, look at these two types of business models.

18:35

They seem similar, but this company is you

18:37

know, generating five x the revenue.

18:40

And you know, the first thing that I often ask

18:42

is, okay, but they did they raise ten

18:44

x the amount of capital?

18:47

Because if so, it's.

18:48

Actually it's actually less impressive to

18:50

get where they got and in the long run, ultimately

18:53

it won't return actual money for investors

18:55

because investors have invested in so much

18:58

that business needs to not just

19:00

you know, outperform their peer set, it

19:03

needs to outperform their peer set

19:05

at a multiple of the amount

19:07

of dollars.

19:08

That were invested into the business.

19:09

And so I think oftentimes it's important

19:11

to look at what has this founder

19:14

done with the resources that they

19:17

therefore do I believe that if I put more

19:19

resources into the business that

19:22

it will continue scaling.

19:24

That's really good. And so you brought

19:26

up, you know, racial equity and these things, and it

19:28

makes me think about the

19:30

landscape, the legal landscape of

19:32

trying to support black founders, women founders,

19:35

LATINX founders. And even when

19:37

you're talking about venture capital, where you're talking about

19:39

college admissions, colleges can't ask

19:41

what your background is anymore, you

19:43

know what, talk

19:45

about your thoughts on the efforts to support

19:48

black founders intentionally with venture

19:50

capital faced with the

19:52

issues that we now are presented with.

19:56

Yeah, I mean, these are these

19:58

are trying times, and you

20:01

know, it's it's hard as as

20:03

someone that's worked you know, in many ways

20:05

in the black empowerment space for the

20:07

majority of my career, whether as an

20:10

artist or you know, with you know,

20:12

with my time you know, founding Blavity,

20:15

we've seen the We've seen the pendulum

20:18

swing back and forth a

20:20

few times. You know, I remember when we when

20:22

we started Glavity back

20:24

in twenty fourteen.

20:26

In many ways, it was a you

20:28

know.

20:28

It was a direct response to

20:31

you know, what was happening in Ferguson,

20:34

you know, in response to the murder of Mike Brown.

20:37

And you know, then you know, there was

20:39

interest in supporting these types

20:41

of initiatives. That interest winds down

20:43

and then it ramps up again with

20:45

the murder of George Floyd, and then

20:48

again we see a lot of racial

20:50

equity initiatives permeate

20:53

throughout corporate America and the investing

20:55

world in twenty twenty, twenty

20:57

twenty one, twenty twenty two, and then

20:59

it and now we're seeing the pendulum

21:02

swing back with a pushback against

21:04

critical race theory, A pushback against

21:06

affirmative action. But

21:08

for those of us that are practitioners in the space,

21:12

this is not new. Sometimes

21:14

it's in vogue to support

21:16

racial equity, and sometimes it's

21:18

very much not in vogue. I think that the important

21:21

thing for founders to look at is

21:23

the people that have staying power,

21:26

the folks that have said that they care

21:28

about this work and have continued.

21:30

To do this work whether or not it's popular.

21:32

And I think that you know, there are companies like

21:35

Blavity that you know, will

21:37

support black people whether or not it's cool

21:39

to support black people. And I

21:41

think that there's a lot of firms that have demonstrated

21:44

track records in venture, you know,

21:46

of investing in people of color, corporations

21:49

that have done this.

21:50

And I think the most important.

21:51

Thing to look for is look at people's

21:54

track records over a longer time horizon.

21:56

Don't just say, you know, do you have a

21:58

new initiative or have you do you have

22:00

a good press release, you know where you've made

22:02

some type of dollar commitment, which,

22:05

by the way, many firms made dollar commitments

22:07

that didn't actually execute on those dollar commitments,

22:10

right, So don't look at that, look at the actual track record.

22:12

Of work and say, okay, over the last ten years,

22:14

over the last twenty years, you know, have

22:16

you you know, how many black founders have you actually

22:18

invested in, how many programs have you actually

22:21

created? What were the actual dollars that were

22:23

deployed versus the dollars committed? And

22:26

I think that you know folks rise to

22:28

the top in terms of who actually has a track

22:30

record of supporting women and people of color in this space.

22:33

There's this line of an article I read

22:35

about you, where the line is Samuels

22:38

is a believer that the best endings to a

22:40

story are both surprising yet inevitable.

22:44

And I'm going to allow you to pick

22:46

which you want to talk about with just that statement

22:49

alone. But I think about how that can be directly

22:51

related to so many things. Number One, you

22:53

know you talk about black people. I believe black

22:55

people ultimately find true

22:58

generational wealth and success as in our

23:00

country and around the world, we

23:03

will find our way to not be the

23:05

minority. We will be the I mean that's just numbers,

23:08

will be the majority or not a

23:10

minority. In less than ten years or about

23:12

eighteen years. We will find

23:14

success where we have not historically found

23:17

it. People who are gonna win. In

23:19

startups and business and et cetera, you

23:21

can probably find indicators that say that person's

23:23

gonna win regardless whether or not I invest

23:25

in them, because that's a winner. So that

23:28

person's gonna win. Aaron Samuels is going to

23:30

win, Jeff Nelson is going to win, Morgan

23:32

is gonna win, whether or not pick

23:34

a thing. And so talk

23:36

about what you want to talk about with just that statement,

23:38

like, what do you get? What do you derive from that

23:41

statement?

23:43

Yeah?

23:43

I mean, I think the clip

23:45

that you're pulling that from is actually

23:47

where I was talking about evaluating

23:50

founders and helping

23:53

founders tell their story to other investors.

23:56

And I think that when

23:58

you know when you're pitching a day, when you're pitching a company,

24:02

I think that subtly that's what

24:05

moves That's what moves the needle on

24:07

getting somebody else to be convicted

24:10

in you is be surprising

24:12

yet inevitable. I think

24:14

if if somebody walks away from your

24:16

pitch as a founder and they

24:19

say, oh, that called me off guard, but

24:23

also yeah, that's definitely

24:25

gonna happen, I think that

24:27

that makes me more likely to

24:29

invest in you, because I believe the world is naturally

24:32

going there anyways, but you surprised

24:34

me because you're going to get there first, or you're gonna

24:36

get there differently, or you're going to get there better. Of

24:39

course, I think that that's true more broadly,

24:43

you know, than just founder stories. I originally kind

24:45

of pay per clipped that expression from something

24:47

that we used to say a lot in the poetry world

24:50

in terms of an ending to a poem or an ending

24:52

to a story is surprising, get inevitable.

24:55

But I think that that's what leaves you at the end

24:57

of a presentation, at the end of a story, like

24:59

the end is sucked out of you a little bit. And I

25:01

think it's that that emotional feeling

25:04

oftentimes that drives a lot of

25:06

investing decisions.

25:08

Is you talked about something in that statement

25:10

there that you know you can invest, that you know Series

25:12

ABC potentially, and you're talking

25:14

about investing your seed and pre seed. Is

25:17

that ability to do because a lot of people

25:19

in the venture capital space pick one of those or

25:21

maybe two of those. But is that

25:24

particularly because you raise I mean you

25:26

raised a big round. I mean your first one

25:29

of the largest black owned first time funds

25:31

of sixty six million, is that

25:33

ability to invest as such

25:35

a wide category purely reflective

25:37

of the amount that you raised.

25:42

Not purely I mean I think I think,

25:45

you know, the amount that you raise has something to do

25:47

with your strategy, but it's not the it's not

25:49

the entire thing.

25:50

I would actually, you know, flip the order.

25:52

We knew that we wanted to invest at the seed stage

25:55

first, and so then we raised a fund

25:57

that we thought would be appropriate for the

26:00

stage that.

26:00

We wanted to invest in. You know, we we had

26:02

a proof of content fund.

26:03

We did thirty five companies. You know,

26:05

now we're running Fund one. We're going to do thirty five

26:07

companies in that fund. Then we're going to raise

26:09

another fund, probably going to do around thirty

26:11

five companies again, you know. And so we think that kind

26:14

of playing in the you know, sixty to one hundred

26:16

million dollar fund size window

26:18

is appropriate given the amount of companies

26:20

that we want to back over the you know, three to

26:22

four year time horiz, then we want to invest in them.

26:26

So when you're talking about the

26:28

LPs that you deal with, and you know, there's

26:31

you know, if you picked the category that you're in

26:33

of the

26:36

level of VC firm that you have, you know, let's

26:38

say around one hundred million dollars, there's

26:40

a lot of them. There's what

26:43

is the LP thinking about I'm

26:46

going to invest in Collide versus ACME

26:49

firm? What is the differentiating

26:52

factors that they're looking for?

26:55

I mean, I think they're looking for a lot of things, you know.

26:56

I think most LPs are looking for person

26:59

and foremost a history of strong performance.

27:01

So they're going to want to know, how did your previous

27:03

funds perform? Have you consistently

27:07

returned money to your other LPs? Outside

27:10

of that, oftentimes they're looking for some type of competitive

27:13

edge or competitive advantage.

27:16

Usually that means you either have access to

27:18

the unique communities that they don't have access

27:20

to, or you have some type of expertise

27:23

that makes you a better selector. You know, have

27:25

you spent time in an industry, do you have you

27:27

know, specific level of training or education

27:30

in a particular way of thinking. You

27:32

know, but do you know, do you have access? Are

27:35

you going to be a great picker? And do you have a history

27:37

of performance?

27:40

In that same article, they had this phrase

27:42

nails call it. You like to invest in people

27:45

building generational companies and

27:47

so is there a balance between

27:49

hey, this is a just a great

27:51

financial play, but it's probably not going

27:53

to be here in twenty years or we want

27:56

to be along for the long haul.

28:00

Absolutely, And look, there's a lot of different business

28:02

models in kind of venture in the broader

28:04

kind of private equity space.

28:07

If I invested later stage, if I invested

28:09

in.

28:09

Series D, Series E, Series F companies,

28:12

you know, I wanted to be along for the ride for three years

28:14

and then they go public and then I cash out.

28:17

That is a very different type of business model.

28:19

And of course, you know, there might be opportunities

28:22

to participate in projects like that

28:24

in a one off basis, but the reality

28:26

is when you invest at the seed stage or

28:28

when you invest at the pre seed stage, you're

28:31

signing up to be with these companies

28:33

for a you know, seven to twelve year journey

28:35

on average, sometimes longer.

28:37

You know, I know seed stage managers that.

28:39

Have held positions in companies for twenty

28:42

years before you know, before cashing

28:44

out. And if you're thinking about the world

28:46

that way, I mean twenty years, twenty

28:48

years is a generation. You know, like

28:51

that, you know, you could see full turnover

28:53

of team, of culture, of product

28:55

even just you know, think about what you were doing

28:58

twenty years ago, the world

29:00

was completely was completely different.

29:02

You know, we were we were listening, we

29:04

were listening to you know, to Nelly,

29:07

you know, performed videos on

29:09

one oh six in park. You know, we

29:11

were you know, people were slapping POGs.

29:14

You know, Instagram didn't exist, Buying

29:17

didn't exist. People were playing with Tomagotchi's,

29:20

you know, like like the world

29:22

was a different place. And so when

29:24

I say that though, just as a reminder, the

29:27

founders that I'm backing today are

29:29

potentially going to be building companies that'll play

29:31

in a world.

29:32

Twenty years from now.

29:34

So if we imagine how how different we

29:36

are now than twenty years ago, you really

29:39

taking a.

29:39

Big bet on the future.

29:42

And I believe that the

29:44

only way to successfully

29:46

invest at the seed stage is

29:48

to have that long view.

30:05

Black Tech Green Money is a production the Blavity

30:07

Afro Tech on the Black Effect Podcast

30:09

Network and I Hire Media, and it's produced

30:11

by Morgan Debonne and me Well Lucas,

30:14

with additional production support by Sarah Ergan

30:16

and Love Beach. Special

30:18

thank you to Michael Davis and Kate McDonald.

30:21

Learn more about my guests of other tech dis rubs an innovators

30:23

at afrotech dot Com enjoying

30:26

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