Eric Bahn - Why being a founder of a VC fund is often easier than being a founder of a startup!

So yeah, why do I believe that being a VC, a founder of a VC fund, is easier than being a founder of a startup? There's so many reasons. I mean, the first I guess I'll ground myself on is product-market fit. It turns out that when you run a venture capital fund, there's very established product-market fit. My product is giving money to you as a founder, and it turns out that founders really like getting money from a VC, right? Hmm.

So,

um, Every other startup that I ever ran, like I've had 5 companies, this is my 5th one right now. Mm-hmm. Like they, it took me like 3 to 5 years to find product-market fit. And that was like with a lot of resources spent, time, money, to try to find something that finally took off. And it was just lots of experimentation. So, you know, the early days of being a startup founder, the quest is to see whether there is a path to product-market fit. And many do not. I'd say arguably most do not find it. Mm-hmm, mm-hmm.

Right?

Sure. So you take away that stress. That's part one. Part two is that there's something a little bit different about having a portfolio of companies versus just one company. When you're a founder, you know, all of your eggs are just in that single company. Like, it's toxic. Like, even your personal identity often feels tied to the success of this business. That's how I felt. That's never a healthy kind of thing. That's like gonna be like a binary outcome usually for that founder. In a portfolio, when you're a VC, we have 500 portfolio companies across 3 funds. So it creates a little bit more of like an emotional balance when you're a VC because you have like a portfolio of high-risk businesses, not just the one.

Welcome to the Undefeated Underdogs Podcast, where I unpack and narrate stories of ambitious people who turn obstacles into opportunities. My goal for this podcast is to create a platform to narrate underdog stories and maybe play a small, teeny tiny role in inspiring you. I intend to highlight the underdog mentality and make authentic conversations with people who play the long game, take action with a chip on their shoulder, and convert obstacles into opportunities. Buckle up as I'll be bringing some authentic founders, VCs, community builders, and content creators who got underestimated their whole lives, and yet they beat all the odds to become insanely successful. Now today I want to tell you a little bit about our awesome sponsor acquire.com. Selling a business is as tough as building a business. As someone who went through this process once, selling my own startup, I know the pain it takes to get to the end zone. This is where our sponsor shines. Imagine this, you're a founder who's built a solid SaaS product, acquired customers, and generating consistent monthly revenue. The problem is you're not growing forever for whatever reason— lack of focus, lack of skill, or just plain lack of interest and you feel stuck. What should you do? The story I'd like to hear is you buckle down, somehow reignited the fire, get past yourself and the clichés and start working on your business rather than just in the business. You start building an audience, move out of your comfort zone to do sales and marketing, and in 6 months you triple your revenue. The reality isn't as simple. Situations may be different for every founder facing these crossroads, but too many times the story ends up being one of inaction and stagnation until the become business— the business becomes less valuable or worse, worthless. If you find yourself here or your story is likely headed down a similar road, I offer you a third option. Consider selling your business on acquire.com. Capitalizing on the value of your time is a smart move. Acquire.com is free to list and they've helped hundreds of founders already. Go to try.acquire.com/shirath and see for yourself if this is the right option for you. Now let's get into today's episode. Hello, hello, beautiful people. Welcome to the Undefeated Underdogs Podcast. I'm your host, Shirath. Today I have an exciting, exciting, exciting guest who's also uber cool. I'll I'll repeat that again. He's really cool guy. He recently said that he's not— no one said about it. I would go file a case against them. But today I have Eric Bond on the podcast. Welcome, Eric. How are you feeling? Thanks for taking time today.

Yeah, Sharath, feeling great because I get to have a conversation with you. Really honored to be on the pod with you. And I think we're going to cover some really good stuff. So excited.

Absolutely. Absolutely. I have so many questions for you. Technical, non-technical, shitposting, you know, we can talk about. But for folks who doesn't know Eric, which is rare, let me give you guys a brief example. Eric's, like I said, super cool VC who always like finds ideas and intentions about helping founders. That's one thing I really observed about you, Eric, when I saw and I researched you because And I've been like a big fan, followed you for many, many years now.

Thank you.

He's the co-founder of Hustle Fund, a pre-seed VC fund with over like $130 million AUM. And his co-founder is none other than the amazing Elizabeth Ann. I'm a big fan of her as well. Briefly, when I was at Product Hunt, I kind of like helped host the team with the session with her. He's a founder, he's a PM. Oh my God. He did so many things. He's a founder of a children's book company. I can go on and on about Eric, but let's get into it. I think everybody can get the intro from the show notes, but right off the bat, what's your obsession with minivans?

Oh, sorry, there's a bit of a delay there. I missed that question.

Oh, so I'll repeat. Yeah. So what's the obsession with the minivans, Eric?

Ah, yeah. So this has become a bit of a— what started as a small joke has now turned into a little bit more of a meme, which has now turned into a very closely associated branding for myself. So yeah, I drive a minivan. It's a Honda Odyssey. It's great. I got it once we had our first kid. And, um, the thing that, that triggered, I think, the minivan jokes was, uh, at least in the United States, there's this belief that minivans are super uncool, right? Yeah. So people think of soccer moms, soccer dads, people that live in the suburbs have kind of given up on life. But the reality is this, Stroth, if you drive a minivan, they're actually fantastic vehicles. They, they're huge. The doors slide out like this. They have so much utility. But in addition to that too, I, I'm like, it, it's almost like a, for me, like something like of a reclaiming of my masculinity because like people will sometimes toxically say like, oh, you're not a real man if you have a minivan. That is nonsensical because you, you have to have made children in order to have filled up the minivan with, with those babies. Right. So, right. For me, it's like taking back the brand of, um, that minivans are, are actually really fun and cool and The thing that again makes me so happy to drive one is because I have this fantastic family. I get to drive around in it. So yeah, it's, it's a weird joke that I have no idea when it's gonna end. It's been like 5 years now since people have been sort of talking about minivans and I, I'm just continue to feed the fire, I suppose.

Yeah, you shouldn't, you shouldn't drop in my opinion as well. I think I like, I love the, the reason behind it. I think it's not just a cool thing that you're doing because you can get into people's conversation about, you know, everybody loves, I wouldn't say controversy, but anything that is unfiltered or like, you know, like a hard opinion. But I think I like the reasoning behind it because you kind of want to go against the norm, the stigma, right? So generally it's like, it's an uphill battle, but of course, you know, I have high trust in you for making it super cool. Thank you. As a dad myself, I'm expecting our second kid next year in March.

Oh my gosh, congratulations. Yeah, amazing.

Yeah, thank you. Appreciate it. We are going to have like 2 boys. One, we have a hyper, hyper energetic toddler in our house. As a matter of fact, when I was building my previous startup, shout out, my co-founder actually gifted me Hustle Funds 1Z. I couldn't find it. It was lost in the garage somewhere, but I still have it. Which I actually, I think I tweeted about it like 2 years ago.

I'm sure that we reposted it. We can't resist a cute baby wearing a Hustle Fund onesie. And congrats. I think actually if you have a really energetic older son, then he's going to just have the perfect playmate for life, right? To push around, play soccer with, whatever.

Absolutely. So I joke with this with my wife. I'm an introvert, so God gifted me 2 boys as friends.

Well, you can keep going, see what happens.

Maybe there'll be a girl at some point. Oh my God, my wife will kill me. Let's talk about parents. I think you're one of those people on Twitter, X, whatever people call it these days, that kind of brings the balance out, right? Like, your content is blend of, like you said, you're very proud of family, you're grateful about your family. You talked a lot about how they helped you become better. One of your tweets about your kid mentioning about an autistic kid that actually changed your perspective and thinking and improved empathy. So a lot of your tweets are well balanced. It's not very technical about VC, VC, VC, or these are your hustle tips and whatnot, but it's also like you bring the human side of it. So talk to me about your family. One of the things that triggered to me is this post from Catherine. She's an amazing person, by the way. She, you know, the founder of Anja Health. She was on my other podcast about—

One of our founders.

Yeah. So bonding with the kids. So my question is, like you said, it takes time with bonding with kids. So talk to me about their presence, how they impact you on a day-to-day basis when you take big decisions like investing in startups?

Yeah, I think the interesting thing, just starting from the very beginning on that, is I never thought I really wanted kids. So I was a little bit against having kids. I guess having a family was never like a real dream of mine when I was a young child. And then when I became an adult, it was like, it'd be kind of okay, I guess, but I'm not really that into it. There comes a point like in your 20s where you're starting to do better in your career and like you're making a little bit more money and then the vacations start to get better. And then suddenly like everything feels much more affordable, like a slightly better meal and all that. So like quality of life is increasing, right? Why screw that up? But my wife really wanted kids. So that ended that conversation, you know, and that's really important for me. So, you know, we eventually started going for it. And then what I learned now, pretty quickly actually after the first one, was how amazing it is. I mean, I think I deeply underappreciated The basic thing that I get out of every day, like removing the spiritual qualities of children and all that stuff. And you know what it's like to, to make babies also. Like at the end of the day, like when I step back from my garage back into the house and my family's there, I used to have just one best friend in my house. Now I have 3 best friends.

Right?

Like the pee poo, lack of sleep. It's awesome. Yeah, it's annoying. But like, uh, really it's, it's just majority of the time, like having a great time with each other. It's just like the best roommate situation I've ever had in my life.

So

part

one is just like, that's so grounding.

You know, just, just to know that like the home feels so safe and it feels more full than before. I think the second thing too is, they're constant— kids are a constant reminder to you of what really matters in this life. And, you know, they don't give a shit. They never ask about like, how did it go with that LP pitch or that podcast with Sharath? Like, they're not gonna ask those questions. Yeah. All they want is your time. and your presence, right? Especially while they're younger. And, uh, so like if I were, you know, not a VC and just, you know, working in any other job or like I was struggling with my career, whatever it is, like they don't care, you know, they just care about me. Right. And,

uh,

it's a nice daily reminder to have, which is just like, you know, the people that love you most, um, they're not judging you on whether you have a cool job or not or how much money you make or anything like

that.

And, um, and adults tend to do that a little bit more. So yeah, it's a nice contrast. I find a lot of safety in that.

Absolutely. I just— to add your point, we are all programmed, you know, in one way or the other. But kids, they come as blank, pretty— it's like white slates, right? They don't have anything. They don't know, uh, the negatives. They don't know how to scheme. They don't know how to hustle. They are this pure white slate. That's what I learned when I had— I always wanted kids, but I never knew how impactful it would be when you hold a baby who beat the shit out of the odds of 400 trillion to 1. That is phenomenal. So that is my reminder every day when I see him. It fascinates me that he, like you said, they don't care about anything. At the same time, they are just very pure. They're these forgiving souls that they just forget, forgive, and just want to try to be in the present in that moment. Right. Yeah. Like you said, I think not highlighting about the philosophical angle of benefits of being kids, but it's just like startups, right? It is tough to build a startup, just like it is tough to wake up in 2-hour intervals to feed an infant. Of course it's uncomfortable, but the beauty is in the long run. Like when you produce something so beautiful, it impacts, you know, the fruits are in the future. So absolutely what you said about, you know, true. I love one of your hacks by your wife. More read time is equal to more iPad time. That's something I want

to

implement as well. But any other hacks that you've recently both found or implemented that are successful that you want to share?

Well, I don't know if this is really a hack, but something that we're doing differently in our household that I didn't have when I was a kid because I was frankly way more spoiled than my children are today and they're pretty damn spoiled. You know, we are very early on trying to institute chores for them, right? Just this notion that they actually, even at their young ages, can contribute something meaningful to the house. So they're doing more cleaning of the house. Interesting. A little bit of the cooking. You know, just the things that are kind of daily kind of muscle memory things that I want them to get into the habit of doing. Just like learning how to like take care of our home.

Right.

And yeah, like soon, like I can't wait for them to do all their laundry. I think for my son, he's ready to do it. He's 8 years old. And yeah, just like these kinds of like small life skills. I remember like going to college and then like staring at a laundry machine for the first time in my dorm and just like kind of being super embarrassed of just like, I have no fucking idea like how this thing works.

Oh, man.

So, and then, you know, just had to slowly learn. But, you know, just knowing that they can have something that contributes, I think is important. And then, the other thing too is just, you know, what's important for me at least as a parent is also just quantity time and quality time. So, I really do think that the two really matter a lot. And some ways that that manifests in my life is making sure that I'm very present from like, Cub Scout activities, going to the soccer games, like never having my phone on me, like for those kinds of things. And then also volunteering in my kids' school so that they can see their dad in the classroom every other week, you know? And that's— I don't really do much in that classroom other than just play with the kids a bit, but I know that's something that they're gonna remember, right? It was just like, dad tried to like solve for some quantity time as well. Right. And You know, I love my parents a lot. I love my dad. He was a surgeon and he worked a lot, and I kind of wish I had more time with him. You know, that's, that's the one thing that I wish were possible. But, um, you know, he had to do what he had to do, and, you know, that's kind of how life shook out. But taught me that I wanted a little bit more time with my kids. It just really comes down to that. Yeah. I'll just share this, which is like something I think been thinking about a lot, Sharath, which is there's this, uh, show on HBO I really like called The Righteous Gemstones. It's about this this family, kind of like Succession-like family. Uh, but the, the father, uh, started a megachurch in the South, right? And then it's a little bit of a hilarious story in the sense that they're very like corrupt. So like, they just like are ridiculously rich, right? Just like running this church. And then, um, in this latest season, one of the uncles is like, you know, your daddy gave you all the riches in the world. He's talking to their spoiled kids. He's like, but he forgot to give you the most important gift, which is his time.

Right.

Which is why those kids like end up being like such terrible people. So,

right,

even though that was a comedy and all that stuff, like, I, I think about that actually a lot. It's a good reminder of like, yeah, yeah, there is a meaning. Totally.

I think when, when you, when you have like a— I think you seem to be a person with, uh, with, you know, with a hunger to learn and seek some sort of lesson from everything, right? Like, even from a comedy, you're seeking that lesson, which is very rare, you know, people just consume and just leave it out. So then you're digesting it and implementing in your own life in your own way. So that, that I just want to like acknowledge that because it's, it's a skill. It's a skill that helps.

Yeah, that's kind of you to say. I, I think that I'm a lot less intentional about that. The, the thing that, uh, uh, I think the thing that I'm learning as I get older is just how to be present, right? So like, and then when you're present, then like a lot of things sort of suddenly turn on, like your senses and everything. It's just listening becomes a little bit different. Right, absolutely. Absolutely. You know, I'm not trying to gain lessons off watching HBO. That's not my thing. But like, you know, when something connects with me, I can sort of like sit with it more now the older I get than maybe when I was a more impatient youth. Yeah,

yeah, I love that. So one of the things I also have to acknowledge, you dated your wife for 18 years, and it seems, you know, you're a long-term player. Everything you do You have this long-term vision of doing things. Where did you develop that? Like, you know, from your parents, or do you have any influence for that thinking?

Yeah, so clarifying, I'd been with my wife for 20 years, and then we've been married for 14, but, you know, yeah, of course we're still dating. Yeah, so like 20 years of dating right there. And, you know, In terms of just like the patience for long things. I mean, I was, I'm naturally, I think I was a much more impatient person before. In your 20s, and maybe Sharath, you experienced this too, like, I don't know what it is, like we're trying to race towards. It's like to be a millionaire as quickly as possible, to get all these, like become like 30 Under 30 years. I don't know what it is, right? For whatever reason. Mm-hmm. And I see this with a lot of 20-year-olds even today, like that there's just this rush, you know, people wanna just drop off outta college to just do their thing. And then, you know, as I've been aging, I've been realizing like, what's the rush, right? Just like, you know, just enjoy the journey a little bit more. And also, you know, when it comes to things that compound, you know, compounding just like really starts to shape itself like towards the latter part of your career or your life. And in terms of the habits that you develop, I mean, there's like that famous statistic, I think I'm going to botch it, that like Warren Buffett, like made something like 90% of his wealth after 60 or something like that. Really? I mean, that was a lot of patient operating behind a strategy that he had. And then he made gazillions of dollars very rapidly through exponential compounding. But yeah, I mean, in terms of the long-term stuff, I don't know if it's like— it's definitely not necessarily tied to day-to-day patience because I don't think I am that patient, but Where I am kind of patient is just this notion of like, for relationships, the ones that matter most to me, my family, my friends, my co-founders whom I've known for 23 years as well, and any kind of founder relationships that we have, I know that it's a long-time commitment. Like when I invest in a founder today, I just made a commitment right before this call. In fact, like that's going to be a 7 to 10 year journey before that person can IPO. if everything goes right, we're going to be growing old together, right? So, uh, you know, in those kinds of relationships, I, I sort of dig in. I'm just like, let's, let's, let's assume that this is going to be like a 10-year engagement together and see what happens. So it's a little bit different when you're on the side of the table as a venture investor because just things take time to mature and season before you see any kind of outcome.

I think, uh, by, by nature or by default, the nature of a VC should be I'm placing a bet And it will come to life in, like you said, 7 years, 10 years, probably even longer. I feel that relationship mentality is by default inculcated. So follow-up question, in your opinion, what do you see that strengthens relationship, be it with founders, be it with your colleagues? Be it with family, what is like that something that really triggers you? You know what, I have to push myself to do even more.

I think it's just always trying to find ways to be more present. So there's a— there's some bad habits I've developed when I was younger as a founder, which is, well, maybe this even started when I was a kid.

So

around 6th grade, I made a decision that I'm going to be a great student. Uh, I remember this because like, I was kind of like a popular kid. I had like a, a couple of troublemaker friends, not big troublemakers. And, you know, I could start to see the world starting to diverge of just like, there's one path where like, I can try to be a funny, popular kid in 6th grade. And then there's another path, which is just like, maybe there's something bigger than, uh, than what I can see in front of me growing up in Michigan, like a bigger world out there. Mm-hmm. And I quickly connected the dots of just like, you know, if I can get into like a great college somewhere, it seems like there's like a very big adventure ahead that that would also open up. Mm-hmm. And so I chose the path of just becoming like a really great student. And then like with a singular goal of just like, I gotta get outta Michigan, I'm gonna go to a great school, and then like we'll see what life goes, where life takes me after that point. And as a result, I became like very, very disciplined, you know? Those are when I think I started to develop my habits around never procrastinating, just like pushing really, really hard when it comes to, at the time, academics. Where that started to translate for me in my founder career was I quickly noticed actually just as a young adult that there's a quality that's missing in almost every single professional that I've seen. I'm talking about like 98% of the people I work with, which is fast response. You know, like if someone puts in a request, do they execute it? And then do they respond quickly? Execute well and then respond quickly. And there are just certain people that I'm sure you work with, Sharath, which is like you send a note to them and then you have full confidence it's just going to execute, be executed. And you just like, it leaves your mind. You're like, I have no worries about this thing. And then there's a lot of other people I'm sure you work with where you're like, I'm going to send them this request, but I know I need to like follow up with them to sort of like push them and push them and push them. Right. I actually think that's more of the default. So in my first company, I would respond to every single message within 1 hour for 2 years. I was running a discussion forum at the time. It was in my first company. So that basically meant that it was a 24-hour on-call. Like when America goes to sleep, Europe and Asia wakes up and like, and like, uh, and I did this and then it sort of conditioned me around this idea of like, wow, people love this stuff. When you respond quickly. Where it starts to get toxic is like, I'm still obsessed with speed. So, you know, I'm inbox zero every day. I've been inbox zero every day for the past 10 years, I'd say. Wow. You know, like when it comes to like execution, like I rush real hard to make sure that I get all my deliverables done every day. That comes at a cost though. Like it trains me into like looking at my phone all the time. Right. And I don't want an enduring memory for my kids to be like, yeah, dad was watching the movie in the living room with us, but he was actually working on his phone the whole time. That's a, that's probably a toxic habit I need to stop with in front of my kids. So, Right. still something I'm kind of working on, but like that, that's sort of like a different manifestation of my own impatience for myself, even though I'm very long-term patient on other things in my life now.

That is very fascinating. I think that basically, like everything in life, anything in the universe, balance is what makes it right, in my opinion. Finding a true balance, not to go at the end of spectrum, whichever it is, obsession or laziness or not doing things. Sure. But I really like the— in a way, you're saying that everybody should have an urgency. urgency to do things faster in a faster way, but at balance, you know. So urgency is something that can come from external pressure, or else, you know, you can pressure yourself to do it, you know, certain things in certain points. So I like that fact. Yeah. Also, in a way that you're also saying that we all know that trust is the single most ingredient that actually helps build relationships, like, you know, in a better way. That trust element, when it comes to founders that you've invested in or you've worked with before, what are some qualities that people fascinated you when it comes to trust? That these are some things that exhibited that actually, like you said in your words, made me again a student. Of learning from them?

Yeah, well, I think consistency of follow-up is the thing that starts to show real trust with me. The very best founders I work with on a monthly, maybe on a quarterly basis, send updates like on the dot. And the quality of the updates is showing everything. It's like the good, the bad, where they need help, or they might be succeeding, whatever it is. It just feels like a full, fully vulnerable kind of like, uh, update. And, um, what I find is just like that kind of consistency matters a lot. But of course, the nature of just vulnerability matters a lot to me too. Um, I tend to find that those who are willing to become vulnerable are generally very high, like, emotionally intelligent and also quite self-aware. And also the best coach because I think with vulnerability, it kind of signals to me a little bit of growth mindset of just like, I am willing to adapt and learn. And this is just what I accept is like a necessary part of this job. Right. And you got to have a growth mindset, I think, in order to be, to make it to the very top of Silicon Valley. Absolutely. So yeah, those are, those are sort of things that sort of demonstrate to me, it's just like that consistency of follow-up on the dot, that vulnerability. And, you know, from there, I think it's a really good baseline of trust. But one thing that I also do to try to like start a trust-driven relationship with our founders is when we offer cash to a founder and they accept it, I walk them through a social contract for how Hustle Fund engages with its founders to see whether they're down to work with us. And if you're open to it, Sharath, I'm happy to actually— Share what the social contract looks like?

Yeah, absolutely. Absolutely. Yeah.

So let's pretend you just took money from us, right? So I'd say like, this is usually our first meeting right after the money's been wired. I say, yo, Sharath, thank you so much for saying yes to Hustle Fund. You know, like I'm really excited about this journey ahead. And the way that we operate with our founders is through a social contract that we set up that has 3 parts. So the first part is I'm going to commit to blunt honesty and feedback to you. But please assume it's coming from a good place in my heart. Mm-hmm. Um, you know, your time is really valuable. I always wanna make sure that we can just get right into the heart of, of what's going on and, you know, have a very honest conversation about it. But of course, this is a reciprocal relationship, but assuming that's from a good place in our heart is important because we all want the same thing, which is for this company to be, to be incredibly successful. So that's part one, is that blunt honesty and feedback, good place in the heart. Second part is when we, whenever we speak, whenever we meet, Sharath, I'm going to assume that things are going badly. It's not to say that you're a bad founder or that the business is bad or anything else is necessarily bad, but even for like the best companies I've ever run, 95% of the time it felt like shit. I mean, like, you know, there's always a house of cards that you're building where it could collapse at any moment. A key employee leaves, a key client is churning, something that feels existential all the time. There's always a big problem to be solved. So when we jump into the call, let's just get right into problem-solving mode and figure out what the biggest blocker is that can help you unblock. Now, 5% of the time, from the 95% of the time feeling like crap, like it feels amazing. Like that little minor minority time. And that's kind of probably why we do this business because of that existential high.

Of course.

That you can receive as being a founder. But anyway, I'll assume that things are going badly in our call. So blunt honesty and feedback. We'll assume that things are going badly whenever we meet. And then the last part of our social contract is, Sharath, you have permission to lose all of our money.

Mm-hmm.

And we didn't invest for you to lose money. And in fact, I don't think you're going to lose our money. We invested because we thought, we think that we're gonna all profit together. But if we uphold our social contract together, we tried really hard. We were transparent and vulnerable and honest with each other along the way. Lots of feedback. All the effort was there, but it still doesn't work out. That's okay. Just come back to us when you're ready to start another company and we can try it again. And if that one doesn't work out, that's okay. Just come back to us again and we can work it out. Because what I've learned in my life is just that if you treat life like a multi-turn transaction, which it is, a winner will eventually win, right? Mm-hmm. So sometimes it takes a couple of tries before you get there. So that's the 3 parts, spontaneity and feedback. We seem that things are going badly when we meet and it's okay for you to lose all of our money. So anyway, that's, uh, that's what I say to founders. And the reason why I like saying it to founders is A, it comes from a very sincere part in our hearts. Like we believe everything that we just said there, but B, it sort of sets a good tone that we can be safe with each other. Right.

Right.

And I didn't feel that way with my investors. I felt like I was trying to please them. It was like having a bunch of Caesars. They're just like judging me, right? Like I was in their service. That's not the way that this business should work. Like if I'm your investor, I'm like any other service provider to you. I'm providing you capital, knowledge, and networks. Like Gusto's providing payroll services, like First Republic is providing banking services. Like we should all be in your service as a founder. So that's a big reason why I think Hustle Fund exists. It's just like, I just felt like it was a really flipped social contract for a long time. When I was a founder, and I should be.

I absolutely love what you said. I think, uh, I wish many employers and many people are like this. I would say like 100% of the folks who work in tech, just in general in life, are so upfront because, uh, it's a very healthy way of dealing things rather than cupcaking or really adding a level of another layer, which is very bad to even handle, right? It would be best to actually have a face-to-face conversation with all the cards on the table instead of hiding the negatives or the trump card or whatever the other things that people generally use to behave in an abusive way. So, Eric, that was amazing. I got chills when you said about the last point. I think the first 2 were kind of well known in the industry. Very few people either though they practice. But what an amazing way to portray the third point, which is you are open to have an exit. You're giving an exit door. That is phenomenal. Like, because now you are literally lifting the pressure from the founders and giving them all the resources, all the power to go 100x. Because if people have that money as a pressure. I don't know, but like a ton of people, they just fail because they have their, what do you call, accountable, which is good, but it's sometimes bad as well, right? I love the 3 points which you said. I love the exit door more importantly than, of course, the 2 are very important. I think in a way you have that service mind service-minded leadership or servant leadership that you bring to the table as VC. Uh, how popular is it among the VC, you know, industry in your opinion? And what is something that VC should work on?

Interesting. I think as a stereotype, it's not that common. I mean, um, there's 2 ways you could be a VC, all right? One's easier than the other. So version one is this, which I'm convinced More and more is the game that a lot of VCs are playing is you and I start a fund. We decide that we're really good fundraisers and we decide to raise $1 billion out of the gate. What that means is the way that the economics work is we get a $20 million guaranteed management fee, 2% out of the billion for every year for 10 years guaranteed.

You

get $10 million, I get $10 million. So regardless of whether we invest well or what, or don't invest well, You and I are each going to make $100 million. Okay.

Right.

So when you kind of meet an asset gatherer VC, you can kind of sniff it out, right? Like they just don't seem like stressed or rushed at all. They're constantly traveling to Davos or whatever bullshit location. Their office is a little bit too nice. I mean, like this one VC I remember talking to just like showed me pictures of all the vacation homes he has around the world. In one meeting when I was pitching him, I was like, "What a show off!" Like just like

yeah,

like you're not yeah, like you don't give a shit, right?

Right.

That's one version, and I generally find that that's not a very service-oriented mindset normally with people like that, and there's plenty of them in this industry. The good news is this though: the industry is starting to change. There's new emerging managers out there. We're a small fund. There's a lot of other great small funds, and they're they're. I think taking a healthier approach to the founders, like in that service mentality, saying like, asking the right questions, like what I can do to unblock you, or if I invest in you, like promising to, you know, help you with your sales, your products or designs or all these other kinds of permutations of specific areas of value add, I guess. And yeah, I mean, like increasingly I'm seeing those folks in the ranks and it's giving me more optimism. And the way that like smaller funds, just to talk my own book a little bit, get compensated is usually through carry. There's a reason why I'm in my garage and I have a space heater on right next to my feet is because—

Right.

I can't afford actually a lot for myself. Like, you know, I pay myself a fair wage, which is probably 20% of what I used to make when I was a product manager at Facebook right now. So don't cry for me because like, you know, I still have a great house and all this stuff, but like, you know, like it's there, but like, it's not, I don't want to get rich off of my salary and management fees. I want to get rich because we invested in a founder, Sharath. We helped him. He got ultra wealthy from his outcome. And then my investors did. And then I got wealthy as a result. Like that for me is like a pure alignment to capitalism. And if that is the goal, which is just like, how do we set up this founder? to absolutely like destroy it and crush it, then that usually means you have to do a little bit of work, right? But it's fun. Like, it's really fun work. So yeah, I'd say that it's a long answer to your simple question, which is just like the industry is changing to be a little bit more service-oriented. But at least when I was a founder, it was not. It

sucked. I think that's why you're building a fund because just like any other founder, Or before becoming a founder, someone will work for someone and they feel terrible when they're working with someone and they find it very irritating that they go to a point where they want to build their own stuff, solve their own problem and put it out. I think to me, that is my biggest motivation. I build things for myself and put it out because I'll be my first user. Hopefully people join me. That's good. If not, that's fine too, because I am using my own thing, right? Yeah. I do this podcast. selfishly for me, because I want to learn from the speaker or the guest. If it helps one more person pick brain from Eric, oh wow, that's phenomenal. That's impact right there. So I'm already doing something impactful for myself. I think I love founders, you know, VCs, for example, Ryan Hoover, who I admire so much.

Good friend of mine.

Yeah. Ryan does the same thing. He builds things for himself. He does the fund for himself. Because he finds a kick in it, right? So appreciate people like that. I don't want to ask questions about what you look for in a founder because you create content a lot on Hustle Fund's YouTube channel about what you look for in founders or startups. That's there. But one thing I really want to ask, you tweeted about this. Being a founder of a VC fund is much easier than being a founder of a startup. Why do you think that?

Yeah, that one actually got a little bit of controversial responses back. I got some pretty angry direct messages, in fact, from it.

Oh my God.

So yeah, why do I believe that being a VC, a founder of a VC fund is easier than being a founder of a startup? There's so many reasons. I mean, the first, I guess I'll ground myself on is product market fit. It turns out that when you run a venture capital fund, there's very established product market fit. my product is giving money to you as a founder. And it turns out that founders really like getting money from a VC, right? So, um, every other startup that I ever ran, like, I've, I've had 5 companies, this is my 5th one right now.

Mm-hmm.

Like, um, they, uh, it took me like 3 to 5 years to find product-market fit. And that was like with a lot of resources spent, time, money, uh, to try, try to find something that that finally took off, and it was just lots of experimentation. So,

you

know, the early days of being a startup founder, the quest is to see whether there is a path to product-market fit, and many do not. I'd say arguably most do not find it, right?

Sure.

So you take away that stress. That's part one. Uh, part two is that, um, there's something a little bit different about having a portfolio of companies versus just one company. When you're a founder, you know, all of your eggs are just in that single company. Like, it's toxic. Like, even your personal identity often feels tied to the success of this business. That's how I felt. That's never a healthy kind of thing. And I encourage founders not to try to have that mentality too. But it was the case for me, like all of my money, everything was there. And if it doesn't work out, it's one single thing, right? That's like going to be like a binary outcome usually for that founder. In a portfolio, when you're a VC, we have 500 portfolio companies across 3 funds. Like, It's never cool when a company winds down or shuts down. Like, it never feels good for anyone.

Absolutely.

But from my perspective, it's sort of okay. And the reason why is VC at the end of the day comes down to just like 3 to 5 companies that you found that you invest in that generally is going to pull like 90% of the results, right? So it creates a little bit more of like an emotional balance when you're a VC because you have like a portfolio of high-risk businesses, not just the one. Mm-hmm. But I think like one of the responses I really liked was from this guy named Frank Rotman. I really like him. He runs QED, which is a great fintech fund in New York. And he's like, yeah, like at the end of the day though, whether you're a founder of a VC funder or founder of a startup, if you're going to try to be the very best of it, it's always crazy hard. And like, and I think that's actually always true, right? In any discipline, like whether you're a founder or even like working in a In a day job, like if you're going to try to be like the very best, like within the top 1%, that requires crazy good effort. Um, so, and being a founder is just of anything. I don't care if you're a VC fund, a startup, or just like, you know, making a cool like e-commerce store for ceramic mugs. Um, it's just way harder than any other day job that you can have, like by an order of magnitude, I would argue.

Yeah, absolutely.

Not easy, but the degrees of easiness are quite different in my view between VC and startup, at least.

And what lessons have you learned as a founder that you're implementing as a founder of a startup? Are you implementing as a founder of VC fund?

I think the biggest tool is empathy. You know, like, when you're a founder, it's super lonely, right? Like, mental health is actually something that is like a serious problem. Right. And, um, you know, you might have a co-founder that you can talk to and that helps. And I have 2 great co-founders to sort of talk about these things. You might have a great spouse, significant other, friends, but even with a spouse and significant other, unless they're founders too, it's very difficult for them to understand what this life is like. Right. So I think the first question I always ask a founder in our portfolio, whenever we meet, I go, Sharath, how's your mental health? That's the first question I always ask every single one of our founders.

Right.

Right. What I like about that question, it's not like, how are you doing? Which always gets bullshit response. It's like, good. Right. Like people that are fine or, you know, like, how's your mental health is a little bit more of a backfoot question where like, you can't really, you shouldn't be bullshitting me on that one.

For sure.

And I love that our founders are very honest about this. Like, it's really bad right now, or, or it's excellent. But like, rarely do I hear excellent. So, uh, that's part one is like the empathy. And then the part two is just like, because I was an operator for so long and I scaled companies, uh, and sold them, like I, I generally have a perspective that I can share, which is just like, oh, you're, you're about to hire this person. Let me talk to them. Like I've, I've hired like so many engineering leads. Like I'm happy to help you close this person. Or, um, if you have to fire someone, I've done a lot of firing too, just like share advice. And first-time founders are really nervous about that kind of stuff. Mm-hmm. Or, you know, digging in on, you know, I was a product manager for a while too. Like, you know, oh, like, let me take a look at like how you're designing these workflows and like, and all that stuff. So there's a little bit of that, uh, operating sprinkles I can like, uh, put out there. Uh, but at the end of the day, like my core job is just making sure that, you know, I'm, I'm an asset allocator, right? Like I, I, I don't get that, that deep into that kind of stuff, but making sure that the founders feel seen and heard. Mm-hmm. you know, of just, you know, how hard this stuff is, I think is a small, subtle kind of psychological value add that I try to provide too in a very authentic way.

I think an investor is more than someone who gives money. An investor, after listening to your answer, is a coach. It's like literally an NBA basketball coach or an NFL football coach who have a group of guys or girls founders who wants to be at their greatness, and the coach's job is to enable that greatness by providing resources, playbooks, plays, or whatever it is. Like, you know, you're sharing your experience and being really empathetic, empathizing with them.

Yeah, but I don't think that's a very consistently agreed-on perspective, Sharath, right? Like, a lot of VCs I know don't come in thinking like, I'm going to be a coach to this founder. Right? Like, I don't think that's as common a use case as you might think.

Why do you think that? Why do you think— and what is— why do you think people are not being a coach when the job itself demands being them as a coach?

Well, because it takes work. I mean, like, at the end of the day, like, if you're gonna be really cold about it, like, if I gave you the money and I'm on your cap table and I have the ownership that I want, then like, That's there forever, right? Like, like, what? Why do I need to help you? I mean, that's a very— that's a— I'm not speaking for myself. I'm speaking like a very like negative like perspective that some people hold. And like, and I— the downturn has been really interesting for me because there are some VCs that I will not name that have a great brand that have done jack shit in serving their founders. Like, we don't sit on any boards. But like, I mean, I see how hard my colleagues Elizabeth and Sheehan, they work and myself too. And the conversations I'm having and trying to like engineer like all sorts of very interesting financings or like trying to fire sale acquisitions for companies that are struggling. And I'm like, this board member who owns like 20% of this company isn't doing anything. Right. Right. And it's like a constant disappointment in seeing that. And I think the reason why is just like, Why work? You know, I'm too busy. It's August. You know, I'm in Europe right now. And I'm just like, like, we're doing your fucking work for you then. So it's, it's, and I felt that way too, as a founder, it's just like, man, like these VCs aren't signing up to do anything except for just like sit on my, sit on cash that they gave me. That's a bit of a rush.

Like, no, no, it almost feels like you're describing a bank officer who puts money at an interest rate. And if you don't pay, comes back at you saying that, hey, where is my money? Where is the payment? But it doesn't help you, like your business or the thing you grow. If you're buying a house using that bank loan, they don't come tell you like, hey, these are the things you should avoid when you do fencing, for example, just for that analogy. Yeah. You're describing more of that, which is surprising to me because I think I see people like you, Elizabeth, Ryan. There are like some other folks who are very much intentional and have skin in the game and they want to help people. That's why they started these funds, not to make money, but to really like empathize and avoid the problems they faced in their past.

So yeah, but we're not saints either. I mean, like, at the end of the day, we're capitalists and we're in this because we think that this is a very lucrative career if you can do it right. So there's a little bit of self-interest there, but I'll tell you, like, Sure. It's like the thing that I love most about this job. All right. Outside of working for my teammates, we have 30 people at Hustle Fund and they're such cool people. That's fun. But the, there's a moment where like when you invest in a founder as like one of the earliest checks and so many founders at that stage are dealing with like sabotaging voices, imposter syndrome, just like these, this idea of like trying to fighting back that medulla oblongata response of like, you can't do this. Like, why are you here? You don't deserve to see the table. And then like on the few cases where like it starts to work and the company's starting to take off, you begin to witness the metamorphosis of these founders of like suddenly realizing I have what it takes to do this. And you see that confidence build and then you can see like the company just start to grow. And it is an amazing thing to witness when you're at that moment, just like, wow. Like I remember when Sharath was like really doubting himself, but He is crushing it right now and has exhibited an amazing amount of growth. Yeah, the money is nice and all this stuff, but that comes later. That's an outcome. But when you get to see these good human beings become great at what they do, my gosh, that's one of the best gifts.

I think you're also kind of describing the parenting life of You know, being a VC, right? Like, if you— the joy of your kid taking the first steps would never replace anything, right? Like, the joy of that struggle, you know, you treat like your founders as, you know, as your kids in a way. You know, after your answer, I love that. No, I know we are like kind of on time, so I just want to ask about a few more questions.

Yeah, sure.

What do you enjoy The most, if you were to give another chance, would you become a founder of a startup or founder of a VC?

I'd say startup. And like, you know, okay, uh, the thing that's really cool is, uh, I would do it in a very specific way now. Like, if I didn't have this job, it'd be, it'd be me, maybe another friend. Uh, we would leverage a lot of AI and autonomous agents and try to build like a SaaS business to like $1 million in revenue bootstrapped with just 2 people. And I do think we're in that era where you can make like a million, multimillion dollar business with like almost no people. So that's probably the place I would go first is just try to find a problem in SaaS that I can solve and then build almost like teamless setup to make a decent business.

Yeah, there are, there are, there are a million people, like, you know, so many examples you can see who are building businesses. Yeah, it's good. The more businesses we see thriving, it's best for the whole industry. Always. In your opinion, if you were to give advice for folks who want to be a VC in their game, what kind of skin in the game that you tell them to put in? Like, they have to angel invest first, then become a manager, then start their fund. What is the transition? I would call like, what do you call software lifecycle type of a thing? It's DLC, but for VC.

That's a great question. So the cool thing is this, there's no real path to becoming a VC because there's an infinite set of paths. I studied sociology in college. I didn't— I'm not an engineer.

Sure.

I somehow found like a very technical career randomly as a product manager and then in my own startups. And then the angel investing I started around 2013 really did help. So What I do recommend is something you did suggest, which is beginning with angel investments, even small checks, like $1,000 even, where, you know, sometimes people, sometimes a lot of angel investors are like, will a founder even take $1,000 from me? And the answer I have for them is like, yes, they will. If you can also roll up your sleeves a little bit and provide some other value on top of it. Like early in my career when I had less money, I would actually do like a small check and advising. Mm-hmm. saying like, for the next year, I'm going to like do all of your proc requirements or something like that for this, you know, just something on the side. And that ended up being like a very lucrative thing, probably because I got like super lucky with my first companies. So I think early angel investing, even with small checks, is a great way to learn and then build a little bit of track record. And if you do want to inflect into becoming a VC, the only difference of How I would've done things differently is probably begin with like a nano fund. Like go to AngelList, use their AngelList fund services or rolling fund services. Try to raise like $1 million or $2 million or $5 million maybe. That's much more doable as like a starting point. And like the costs for running a fund that small have gotten much lower because of great services like AngelList, Sidecar. Sure. Other kinds of great platforms too. And then if you're finding that you really enjoy that practice and you can do that as like a side fund as you have your day job or whatever, then I think that's a good stepping stone into like maybe creating your own VC fund if that's the path. Now breaking into like an established fund as like a partner or something like that, that's like a Sequoia or something, that's generally much harder, right? Like, you know, you gotta have like unique connections within the industry, pretty great track record, or be like a founder with like a pretty massive exit. So the entry point there is far harder and I don't have like as good advice since I've never done it myself, nor do I have I desired. But creating your own VC thing I think is great. And I think it's, we could always use more good funds on the side of the table.

Yeah, I love that. I think I manifest myself to be a VC because I have this coaching angle in myself. I always like want to help people. So there is a joy, like you said, So 100%, hell yes, you know, for that path. Thank you for that. And last, kind of like a last question in a way, you Hustle Fund invests in hilariously early-stage startups. Can you define hilarious? What is hilarious to you that tickles you?

Yeah, sure. We define this actually on our website as well if you go to our FAQ area, but Hilarious for me is just like, you just quit your job and that's it, right? Like, you're now like working on this full-time. I do want to actually be able to someday support part-time founders. I actually think that's pure hilarity. But we're not right now mandated to do that. Like, it's for us, like, we still need to see the signal. Like, this is someone that's not just dreaming, but actually doing it.

Sure.

But if you're now full-time on the company and then you have like a crappy prototype, That's enough for us, right? Like, that commitment traction is cool, but like, it's not necessary. But you've gone full-time and then you tried— you're now trying to build your first thing. I would love to talk to you at that point. Yeah.

I like what you said about investing in part-time founders because you should— I should talk to you about it. I always build these products and I sold lucky very fortunate enough to build a SaaS and sold it in the last 2 years.

Amazing.

But that's for another topic. But I'm so mad that we don't have more time because I have so freaking many questions I didn't ask.

Oh my gosh.

Maybe we'll do like a round 2. But Eric, this has been a blast. I love the mindset, that service-oriented leadership that you bring to every founder, all the portfolio you have, and generally in general public, like people like me. I learned so much.

Thank you, man.

I didn't ask about shitposting, but that's for the topic. I love your vibe. Like, you know, you're just basically like, you know, live your life, live in the moment, uh, and be cool about it. So, uh, any closing thoughts before we close out?

Yeah, I think the first and foremost, just, Sharath, thank you so much for allowing me to be a guest on your podcast. This service that you're also providing to These questions are great because they invite a lot of vulnerability for folks to understand, I think, some of the underlying motivation a few clicks deeper. So really grateful that you gave me this chance to be on your podcast. And yeah, we can go into round 2 at another time if people found this first part kind of interesting. And yeah, I think the last thing I'll just mention to any founders who are listening is A reminder of quantity time and quality time. It's very easy to view everything as an opportunity cost of like, should I go to this movie with Sharath or can I work like 3 hours instead? And I did this for like so many years of just like starting to turn everything into opportunity costs. And I gotta say that, you know, life moves much faster than you can imagine.

Right.

And, you know, I just hope that people can just enjoy the process and journey a little bit more. And find some time for slow thinking and taking a rest because that's actually ironically going slow allows you to go faster. I'm a really big fan of like high performance driving and they always say, there's a saying which is just like, slow is smooth and smooth is fast. Right? So like when you're actually learning to drive really quickly, the instructors are actually trying to make you go slower, actually slowing down your movements, getting your hands a little bit lighter, trying to get a little more smoothness. Versus like focusing on just like gunning the throttle. And it turns out that like, if you do it that way and just sort of adopt that, um, you, you end up just going faster and faster and faster with that kind of stuff. So for me, that also means just, uh, um, you know, you just don't discount what rest means and actually good pacing, and you'll be astounded by how much throughput you can get as a result. So.

I love that. I love that.

Thank you so much. I mean, it's been such a blast speaking with you, Sharath.

Yeah. Thank you so much, Eric. And that, I think that's the best possible way to end it. I'm so happy that you've said about that quote, you know, I'm taking that as a takeaway, biggest takeaway. But folks, thank you so much for giving your attention. We do this for you, provide value in at least in, you know, in 1% way and stay tuned for more episodes. But that's it for today. Cheers.

Appreciate it. Thank you.