$650 Million Dollar Fund Manager Talks Banking Crisis, Markets, & Family ft Sid Krommenhoek

Sid Kromanuk, welcome to the show.

Good to be here. Thanks for having me.

So as the viewers know, we've had you on a few times. You come to our Black Card groups, you've spoken a few times. One of our original people we actually interviewed when we were first setting up Fund Launch, or Invest Fund Seekers at the time. I interviewed local fund managers and we— I came to your office actually, we sat down and talked about Album VC. So if you can give the viewers, I guess, give us a 30-second thumbnail snapshot of Album and your career and what you guys do at Album, just kind of a high level.

First of all, congrats on all just the growth and the success you've been a part of. And it's really a community you've built that's impressive.

Yeah, it's been fun.

Hats off to you and your team. Yeah, so Album, all of us, me and my 2 partners were operators before this. I had personally started 4 startups, 2 failed, 2 worked out. My last startup was my exposure to venture capital where I had saw the best of VC and the worst of VC. And I think somewhere subconsciously I kind of started to process what I would be like if I were ever a VC. Well, that started about a decade ago. Album is a seed stage fund. So we focus on early stage software companies, almost all software with little exception. We focus heavily in Utah.

Mm-hmm.

My career took me to Silicon Valley, to the Midwest, to Asia. And then when I— by the time I came back, having grown up here, it was just a new landscape where it's like this vibrant ecosystem for startups. We noticed— I noticed when I came back that there was just not operators who were investing. A lot of them were kind of traditional finance backgrounds.

Yeah, yeah.

And so Album's early thesis was we wanted to be the early seed money that could empathize with founders in every tech unicorn that would emerge. And knock on wood, we're 7 of 7. My first investment was Podium.

Yeah.

Our most recent investment was TaxBit. And we've hit some luck. Like, I don't pretend that we work any harder than anyone else. I think we have a message that resonates. We're on our 4th fund. We hard-capped it at $100 million. In parallel, we raised an opportunity fund of equal size, a little bit more. And we're a boutique shop, so we don't have junior staff. I have, like I said, 2 partners and a small operation right here in Lehi, Utah.

Oh man, it's amazing. Well, and I look— I was looking at your list on your website of your portfolio companies and just some big hitters on there, at least that I would think.

We're proud.

We're super proud of them. I mean, To be a kind of— and you started your fund what year? What was your vintage first fund?

2014.

2014. Okay. And how much total, like, like capital raise or AUM have you guys had so far?

Like $650 million.

$650 million?

Yeah.

Geez, that's amazing. And you guys have just— it's been cool. I love seeing you guys' growth, what you guys do, and you guys are just good people. And I just— I love seeing it. So I want to have you guys on today. Now, I know we're limited on time, so we'll go quick. Cool. We talked just a second ago about SVB. So what was your guys' exposure in the venture space? SVB blows up. or is blowing up. Walk us through the timeline. This is like, you know, Tuesday, then there's Wednesday, and then Thursday you start hearing lots of rumors people are pulling deposits.

Yeah.

You, I'm sure you had some portfolio companies that have exposure there. I don't know, wanna hear if you guys had exposure there at all. I'm curious what happened that weekend.

Yeah, I mean, you know, a month ago one of our portfolio founders in Austin, Texas reached out and he said, hey, I'm getting, I'm hearing some things about SVB that they could be in a compromised situation. What he pointed to is what we've, you know, kind of all realized, You know, we're not paid to scrutinize our banks. So, so I think all of us kind of had this rude awakening in the wake of SVB. But we realized, you know, the situation with these, you know, banks that had bought, purchased a lot of U.S. bonds and the fact that, like, with rates hiking so quickly, like, that changes things and those are now devalued and they—

They haven't marked them down yet on the portfolio.

Yeah, nothing's marked to market. And so, you know, so he had tipped us about a month ago, but it was like one of those things where you go, yeah. And I remember reaching out to our bankers and they all, you know, kind of assured us that things were okay. And then as it was—

Like they always do. Oh yeah, it's all good. Yeah.

And then, and then literally Thursday, as things were like starting to hit, like that morning we had an event at SVB's office in Cottonwood, which was the big irony. Yeah. There's this event called the Mountain Mingle where it's like SVB and a group and all these VCs. So we're all showing up to SVB's Utah location.

Yeah.

And, and to their credit, you know, the gentleman who oversees the western U.S. stood up and impromptu was like kind of calming people and he's kind of like, look, I'm going to address the elephant in the room. But what you saw there now in hindsight was the CEO had not prepared anybody for this. It was an absolute, I think, just miss. I don't want to overly criticize, but it's just a massive miss on PR. Yeah. And leadership, you know, if you know that you're unloading and you're going to be logging this massive loss, like you got to have some of that because now you see it after the fact. You see all the bankers like you'll see it on LinkedIn and everywhere saying, been here 20 years and we get it. Like, we know we love you all. They're remarkable humans. But with banking, there's kind of like one rule in banking of, I don't know, don't lose my money, you know?

Yeah.

And none of us lived in the '20s and '30s. So it's not like we've ever really seen this. I mean, we've seen— I was in, uh, operating my startup through '08, '09, so I saw some of that, but you just don't expect this to happen. So, yeah, the short of it is from our end—

So, what did he say at that, that local meetup that you were at?

It was—

And then what happened for— what was the aftermath? What were the side conversations after that?

He spoke to their balance sheet, you know, um, to, you know, their, their strong fiscal position. He, he called out what had happened with the unloading and selling of these now, you know, that they had to sell at a heavy discount, these US bonds, the fact that they were kind of taking the hard medicine, doing what was right by the, by the organization. But, but in that moment, he couldn't really address— like, it was a little bit of the don't panic, right?

Yeah.

Until everybody panics. And, and so it was happening real time. By the end of that day on Thursday, of course, we're telling every portfolio company like, look, you know, you need to address this right away because once a run on the bank starts, you don't want to be the last one.

Yep.

And about, I would say we probably aren't dissimilar from many software and early-stage investors where half at least of our portfolio was banking with SVB. We personally as a fund were banking with SVB.

Yeah.

Even we as managers, you know, we had done some of our personal banking with SVB.

Yeah.

So there was exposure all across. I think I don't think in my heart of hearts I ever felt like, you know, I knew just based on the pain that our portfolio, our fund, and we felt, I thought there are bigger funds, managers have been doing this a lot longer, and many, many more companies. And, um, and the story that you've seen out there in social of like, look, these— this isn't like some tech bailout. These are like businesses who had, you know, what should have been liquid accounts, small startups, you know, small—

They've raised $2.5 million, they got payroll next week, and all of a sudden—

Exactly.

Accounts are frozen or gone.

Yep, exactly. So, um, it was, uh, definitely a fire drill over that weekend of, of, uh, communicating closely with our founders and then in turn our LPs. Um, because look, at the end of the day, and in these moments, you kind of realize for all we want to laud ourselves as, we are, we are stewards of capital. And that is, that is it. Like, in the most basic— just like SVB was a steward of capital, you know, Sid, Album, we are stewards of capital. And so, you know, you want to in those moments communicate closely with the people, you know, with whom you've entrusted your capital and then who have entrusted you with their capital.

Yeah.

So a lot of communication. And you appreciate also in those moments kind of the calm and the steady hand, in our case, of our LPs. Like, we are very fortunate to have the LPs we have. I put them right there on par with the founders that we— of course, they're our royalty.

But yeah. Yeah. Interesting. Well, I know, and I don't think, at least in my opinion, it's not pegged as a bailout either. I think, yeah, I think that's kind of, that's kind of gone. It's kind of been squashed by now, I think, in the kind of social media world. But I mean, it was pretty interesting, though, to think from a treasury management standpoint from all these businesses. You know, you got to think about is all your eggs at Silicon Valley Bank or another bank? You should be diversifying. That's right. As a fund, too, you think about like all these asset managers, these fund managers, it's like they always talk about diversification, having all these assets.

You don't think of— yeah, you think of like diversification within the context context of a bank.

Yes.

You don't think of like diversification across banks with treasuries. You're right. So I think at the, at a personal level, at a fund level, you know, at a startup level, like now, of course, like, right, we're opening multiple relationships with multiple big banks, you know, where we feel moderately safer than something regional. And, and I think it's a little bit of a shame because, you know, SVB really provided and catered to a specific group of people, just like Your local credit union.

I had an account at SVB.

Yeah.

Oh man, they're great to work with. Great to work with founders. They had all these cool terms and lines of credit.

That's right.

And I'm actually kind of sad they went out of business. Maybe that was why they went out of business. I don't think so. But I mean, I thought a very forward-looking, cool product in the market as from a bank perspective.

That's right. I think you probably end up seeing like some, I mean, sort of like there's now this selling off of the individual pieces of SVB, and I'm not close with what's happened like today. I was watching a little bit of March Madness today in between calls. And so I've been occupied with that, but You know, things like venture debt, like venture debt became just a norm for us.

Describe what venture debt is for everybody.

Yeah, so typically when you're raising like a series, especially around a Series A or a Series B, SVB in this case would often, you know, you have a certain amount of now assets on your cash on your balance sheet, and you're able to collateralize that and have some debt that you can take out. And it was just a super convenient convenient service that SVB provided. It was very lightweight in terms of diligence. Like, if I look back now, I, I can think of all the calls where the bank is calling me to essentially see, do you have more money if times get tough for this startup? That's pretty lightweight, like verbal over-the-phone diligence to underwrite a loan.

Yeah.

Effective, right? So I think what we end up seeing is like a decoupling of, say, venture debt and who's offering those Uh, those type of instruments.

Yeah.

Um, and then who you're banking with, uh, you know, or just something more sophisticated. I think SVB perhaps in hindsight got a little over their skis.

I mean, they were probably the biggest venture debt player, is that right? Do you see other banks doing venture debt?

Yeah.

Oh, okay. This is across the board.

Yeah.

SVB is more of the leader on that?

Yeah, I would just say with SVB, they were, they were one. Yeah, there's always going to be a handful that you're looking at. Um, SVB was certainly one that was very common, and I would— I can't give definitive numbers, but I would guess a quarter to a third of our companies who were taking out venture debt did so with SVB.

Interesting. Yeah. And any news from them on what's going to happen to venture debt? That sort of thing?

You know, they've been— I think the communication right now has been the calm, the trying to say like, hey, please come back, please, you know, bring your deposits, you know, back to SVB or keep them here.

Yeah.

You know, because they know that everybody in the last few days has been, or since the weekend, has been scrambling to open new banking relationships. I think they're hoping that maybe some of that money can stick around. I don't know. I think they're all watching and waiting just like we are. When we talk to our reps, it sounds like there's decisions being made, right? You have new leadership in place. You know, is this— is a bank going to come in and scoop it up? Are they going to stand alone as kind of a new entity? It's a little unclear.

Yeah.

I think the private bank which they had banked a lot of CEOs, founders, and VCs. I think that makes sense to probably decouple maybe some of these other debt instruments and the banking also, you know, go a different direction. I'm not sure.

Interesting, huh?

Yeah.

Okay, so different, not including SVB, but what's your conversation right now, 2023, with founders? You have rising interest rates, interesting economy, economic times we're going into. What's your conversation with a founder You know, end of 2022, going into 2023, capital is more scarce. What's a typical conversation you're having with your portfolio companies right now?

Yeah, it's one of capital efficiency, more with less. I think there's sobriety in the system that we just haven't felt for a long time. I mean, really, ever since I've been doing this, like, right, I'm just coming up on about a decade. It's been this bull run like the whole time. And so access to capital was almost just reflexive. It was like that money is going to be And what's clear now is it's not going to just be there. And so that creates more competition for capital, probably capital being— I think there's a general flight to safety. So you see, of the 10 deals, if 8 of them would've been funded in the past, maybe it's only 4 that are funded now.

Yeah.

It's hard to perfectly know, but you can only plan for, you know, as much as you can see. And what we're seeing right now is Series As and beyond are really tight. I mean, like crickets in some cases.

Interesting.

I've never heard more funds, later-stage funds, later than us. So we're seed investors, so Series A and on.

ABCs, yeah. Mm-hmm.

Saying, we haven't done a deal since last October, or something like that.

Interesting. Wow, huh?

I mean, it is quiet, and everybody's waiting. And I think capital will— it will move, but much more slowly. And so for companies now, like, when we're looking at a deal, there's both, like, the portfolio companies that you're already invested in, and then new investments. For those that we're invested in, The story of the last year plus has been to really assess runway and to say, all right, that runway needs to be longer now than we think. And so you've seen the rifts.

What's your— what's kind of runway projections? What are you saying for a startup that's maybe just raised a seed or Series A? Hey, you now got to stretch that capital till what date for a later round? What are you typically seeing?

Yeah, if you can stretch capital through 2025, that feels great. Of course not, you don't—

End of 2025?

Or say into 2025.

Into 2025.

Like, if you can, if you can navigate this year and through next, like, that's wonderful. Now, not everybody has that luxury. And so it's stretch it as far as you can. It's probably going to be more painful and more protracted than any of us think. And so, so make those decisions. And then in terms of like tradeoffs, so it used to be growth at all costs, right? If capital was cheap and capital was readily available, then it was like grow, grow, grow, you know, grow 300%, right? You hear the triple, triple, double, double.

Yeah.

And I think now it's like, we'd love to see a triple, triple, double, double if you can do so, you know, with a certain amount of cash. And, and so, um, you're going to see a lot of companies this year that grow just much more modestly, but they're growing more efficiently. And so, you know, just their, um, their relative burn to growth, like, looks a lot different.

Yeah.

Um, new investments, we're having to eye those a little differently too, because now it's like, you know, that Series A, line of sight to a Series A used to be one thing, and now it's probably moderately more revenue and moderately less money that it took to get there. So it's just, it's just kind of a, I don't know, rewind the clock a little bit. Like, one thing I noticed when I got into this industry, I would hear people say, like, expect a 30% loss rate, meaning, you know, of the 10 investments I make, right, 3 go to zero as a seed investor, which kind of makes sense. 3 to 4 go to zero. We didn't see that. I mean, we had like a 10— we've had like a 10% loss rate.

Yeah.

And I think I think if I was kidding myself, I would say, oh, I'm just a moderately better investor than everyone. And that's not the case. Like, I would guess a lot of early-stage companies have seen a lower loss rate than is normal. And so I think we're going to be entering an era where it's just not— I mean, worse relative to the last decade, but probably on par with what loss rates look like. And so—

Across the board. Yeah.

Yeah. So that just means as stewards of capital and allocators of capital, we need to, you know, make those early bets, but then be judicious with how we follow on with capital. And that'll be tough because you, you get close with founders, they become friends. It's almost impossible at this stage of investing not to become invested in the human just like you are their company. And so, but at the same time, right, you're a steward to your LPs.

Yeah, you got to make the right decisions. It's funny, I was looking at a report this morning actually on vintages of funds, and it was very interesting. I was looking back. Now we don't have the data out for the last like 3 years because those funds are still up, but Vintage, meaning the year they started, funds that started in 2001 almost double outperformed their peers that started in 2004, 2005.

Yeah.

Just— and it was just— it was a survey of like 550 funds across the board. This is in debt. And I looked at one in venture and private equity.

Yeah.

And they all showed the same thing. It was really interesting, just the vintage year. Back to your thing, it's like I could be an above-average investor, but maybe it's more of the vintage when I started. And also there's a lot of asymmetrical risk that you guys bring to the table.

Yeah, no, I love you bring that up. So, When I was getting into this, or somebody— who was it? Maybe it was my partner Diogo. He was looking into kind of this, what makes a great investor? And there's those like me who would tout like operators. It's better to be an operator. And those who would say, well, yeah, but look at Sequoia and others. Like, they weren't all necessarily operators. And the only thing that you could correlate to success was vintage.

Yeah. Interesting.

You know, and so, like you say, like timing does matter. It absolutely matters. And I think Yeah, it's like the people who, who lived through the Great Depression, like they just had a grittiness, you know, that was a little bit different, that kind of stayed with them their whole lives and even transcended them to their children. And, you know, my, my dad lived through— their family lived through World War II. And so there was always this joke that all my aunts and uncles, all my Dutch aunts and uncles, like, would like— it was like they licked their plate clean. You know, you almost didn't have to wash their dish type of a thing or put it direct to the dishwasher. Didn't even have to rinse it off because there was something about just their psyche and how they grew up.

Yeah.

I had a— in fact, I took my kids to meet my aunt who remembers all of the war in Holland this last summer. And she'll kind of tell them when you ask, like, what do you— how did the war affect you? She said, well, like, when my little kids would say stuff like, I'm starving, she would, like, put their hand on them and say, you know what, let me tell you what starving actually is like, you know, what that feels like. You're not starving, you know?

Yeah.

So, so I think, like, right now building, not to be overly dramatic, but, you know, it's It's, it's the age of sobriety, right? It's kind of austerity and sobriety. We're sort of like, no, we don't take anything for granted. Every penny that, that we're— that we have as a, as a founder, we want to put to as best of use as we can. We know that there's some R&D in figuring it out and pivots. We get that. But you kind of have to do it a bit more rapidly and efficiently and better than maybe you could have. You had the luxury of doing in '21.

Have you, have you heard of a book called The Fourth Turning? Heard of this book?

The Fourth what?

The Fourth Turning.

I don't think so.

So, it's been quoted a ton the last like 5 years.

OK.

These guys wrote this book back, I believe, in the early '90s. And it talks about World War II era and the generations that proceed after that and these cycles of human kind of psyche, how they work through generations. And if you've read, I'm sure you've read Ray Dalio's book about the 80 years of financial currencies.

Yep.

A lot of that study comes from these guys at The Fourth Turning. They kind of go through 80 years where a cycle resets itself. So World War II, and then 80 years before that, you had the Civil War. 80 years before that, you had the Revolutionary War. And it goes back through time and history. And a lot of civilizations have these time periods of 80 years. And they usually— he goes through 4 generations in 80 years. So there's the generation that comes out of World War II, and they're called the Prophet Generation. They come out with all these, you know, kind of scars from the war, but things that they want to change and do better. A lot of optimism. And then it comes— the next one is the Nomad Generation. Think about like the hippies, right?

Mm-hmm.

They kind of like rebel against the Prophet Generation a little bit.

Yeah.

And have this kind of discovery period. And then there's 2 more generations after that. And then it comes to, and they're each called a turning. So you have the first turning, the second turning.

Okay.

So the 4th turning is the end of that period. So what's interesting about this book is these guys wrote this in the '90s. They predicted, they say in about the 3rd turning, there's a huge financial crash. They said, well, we predict about 2004 to 2008, there'll be a big financial crash. It's pretty interesting. They then predicted in the 2020s, there will be another major world conflict or war. And it's just, they're just like, just because you've had peace for so long, people just, when they have peace for too long, they just start stirring the pot and wars just happen.

Yeah.

And Malcolm Gladwell wrote another great book about mini wars. Often, if you have lots of mini wars, they often don't go into a big war. But if you don't have a big war for a long time, it builds up to a big war. And kind of the same concept of if you have peace for so long, it blows up into big wars. You see this in the last year. You see Russia lashing out at Ukraine. You see China taking over Taiwan. You see Iran, you see Putin, pretty much every country in the world that wants to make a move is starting to make moves, right?

Yeah.

On this geopolitical scale. So it's a very interesting book and kind of thought process of generations. And we'll see what happens in the 2020s. I don't know, but we'll see if that changes this.

Yeah, and even, and you mentioned Dalio, like just looking at fiscal policy and the fact that like since the global financial crisis, we've seen this quantitative easing, you know, and so you start to correlate, you know, these, yeah, the rise and fall of kind of nations and yeah, it's—

And yeah, he put that to, pegged it with currencies, right? 80-year currencies. And this guy says 80-year wars. It's really just a very interesting, I don't know, concept of just the— it's about the age of one person.

Yeah.

Where you kind of— the 4th generation forgets the lessons of the 1st generation, you know? And you see this, dude, if you read scripture. I don't know, I've been starting to look at 80-year timelines throughout scripture, whether it's like the Book of Mormon or Bible or something. A lot of times it's an 80-year or 4-generation cycle.

Yeah.

I don't know, you maybe— whatever people are listening, you guys can look up scriptures and correct me or add more detail to that. But I started— There's something to it. There's something to like an 80— there was peace for certain generations and then there was a big war. And then there's— because, you know, scripture often talks about war, things that happen, conflict.

Yeah. Yeah.

It's very interesting. I keep seeing this 80-year pattern, so we'll see what happens.

That is interesting. Well, and there's value like in these— like, I— it's a different time. There were different issues. But like, there is a lot to learn, you know, when you dig into like family history in this case, like, right as I go into and, and look at, you know, whether it's an uncle who served in World War II or a family in the case of my father, like born during World War II in the Netherlands, like you learn a lot from that stuff. And yeah. Yeah, it kind of, it's helpful, especially in times when you think something's so dire. You can kind of pull back and say, well, actually, like, this isn't gonna eat me. You know, I'm gonna, we're gonna get through this. And, you know, and there's something to be learned.

Yeah. So looking forward, what, I know you're in the VC space, you're seeing all these new startups, technologies right now. They, a lot of people talk about the convergence of technology happening right now. You have AI, VR, blockchain, quantum computing, 5G speeds, all these things. this convergence of technology happening and this huge spike of innovation happening 'cause they're coming together. What are some things over the next decade or maybe 2 decades that excite you the most in what's happening right now?

Well, I definitely think what we're seeing, and all of us are seeing this in generative AI, you know, is kind of like the excitement and reality that sort of last year, like Web3 was kind of the head fake for. And I don't wanna say Web3, I don't wanna dismiss it as if it's nothing And I think you could argue they kind of go hand in hand in certain ways. But certainly the pure kind of euphoria that was surrounding Web3 and blockchain felt Ponzi at times. You know, it was sort of like, wait, what does it do? I don't know what it does, but it's this and it's gonna be worth that tomorrow. And you're like, hold up. And now with generative AI, right? We can like, whether it's ChatGPT and us all playing with it and seeing the things it can do.

Yeah.

Whether it's, in my case, you know, I'm seeing, engineering teams at some of our startups who are all using ChatGPT in lieu of Google. And that's the Google search.

So cool.

And that's interesting because, you know, we had invested in a company.

Is it writing code for them too?

They're using it for that too. Yes. Yes. You have like junior devs who are leveraging it, you know, and, and then also just for like general search. I just think it's cool because we've seen the rise, right, of some of just the great tech companies, Google being one of them, and Like, I think we're finally seeing like, wow, things are gonna change.

Yeah.

And I'm not gonna try to predict like who is disrupted when or how, but it is exciting like because you can take and see how there are many interesting use cases from consumer to business for AI in particular. And I can tell you like in terms of startups, like it used to be just one of the few buzzwords, machine learning, AI, blockchain, you know, that people would put in a deck. Now there's like real like use of AI. And I think everybody can to some extent understand a bit better what AI is. Like, I think a year ago you ask everyone and it's hard to give a use case. And I think now you can, you can all kind of grok it because we're playing with it.

Or every company said, oh, we got this cool AI backend.

That's right.

And it's just, it's just like a piece of code that just like automates. It's not AI. Like, stop. I was so mad at these companies. Like, stop saying AI. It's not learning. It's just— You wrote a little macro that like connects, but now there actually is real AI, you know?

That's right.

So it's pretty interesting.

Yeah.

So that's pretty cool. So that's something that excites you the most probably is AI and how that disrupts. I do. Yeah.

I mean, I'm really— yes, it is. Like, I think it's truly one of those times where you can see how we have a few of our portfolio companies that are already seeing what used to take real human input with their customers or even within their teams is now being solved for. Through AI.

Yeah, yeah. Totally shifted gears. Has The Chosen called you up for a casting spot yet or what?

You know, we—

That's an honest question. You could be on the cast of The Chosen this weekend.

And I just cut my hair too. This is like my short haircut right now.

Oh, was it a lot longer before?

It was a lot longer. Yeah, I had it like down to here.

Well, it looks perfect. You could be— you could hop right in. Yeah, that's a great show. Has anyone told you that yet?

You know, I had— so I actually was I was going to be like an extra in The Chosen, The Chosen stuff.

Was it part of the 5,000?

I can't remember what it was for.

We paid, we did like a donation. They invited us out. We ended up not going.

Oh, cool.

Was it or was it just something different?

I don't remember specifically what it was. It was just like billed as an extra and they sort of told me to keep growing my beard and my hair. My partner Diogo did. So he's in it. He's like in the background. He says it's like being an extra is like not exciting at all. Like you're treated as like second-class citizens to the main actors. Like literally, You eat this food over here while they eat this food over here. You're sitting around for like 10 hours until they finally corral you in for your moment of, you know, being in the background of somebody. So I never could break away to do it.

Yeah. Oh, gotcha. But he's on it. Do you know, like, what is he— have you seen this? Is he in it yet?

Yes.

Coming season?

Yeah. No, he showed us the clip. I can't remember. I think it was season 2 and I can't remember which episode, but yeah, he's in the background somewhere there.

Okay. That's awesome. We should get— we got to get you on there. You look like you— there's actually a guy that works here. He was an angel in one of those Bible videos or whatever. Oh, yeah. And he grows, and I kept asking, why are you growing it? He wouldn't tell us. No, I just like the way it looked. And finally he's like, no, I'm actually an extra. I'm an angel that like, he had to have long hair and this whole thing. And he looked amazing. It was great. But it was pretty awesome. Okay, I know you got to go soon, so we'll get a couple last questions here.

Yeah, sure.

What's one book that has changed your life, the way you've seen the world? Hmm.

Yeah, good question.

Or I'll expound it to a piece of content. It could be a book, it could be a podcast, but book's usually the one.

Yeah, there's a lot of books I really like. I mean, I'm a little bit a product of like what I've read lately, but, but if I, if I reach back, honestly, one of the first books that captured me in a business sense, because I grew up loving like historical fiction, And then, you know, when I, when I was in my first startup, I started to like, I need to understand this stuff. And even just the concept of, of money was The Millionaire Next Door.

Yeah.

I think that was like, I think especially growing up too, like as a kid, you know, not having money like in our family or anything and, you know, having to pay for my basketball shoes, my scooter, and then my bike, you know, threw my paper out like, I didn't understand. I just didn't know anything in any sophisticated way about money. And so, The Millionaire Next Door was kind of my first look at like just the idea that the people who appear to have money aren't necessarily the ones that are building real wealth.

Because probably your idea as a kid was the only people that have money are the people that have a golden house and drive crazy. You know what I mean?

That's right.

Crazy. Look, they're on Instagram with Lamborghini. That's the only people with money.

Totally. I looked up to my friend whose dad was a doctor and he did have money, but it was the convertible red Porsche and going Going to a jazz game in Salt Lake and thinking like, wow, to have that car and to sit in these seats. And it was just very basic. And I think, you know, appreciating even just saving. I think early in our marriage and even now with our kids, like, I try to get my kids like addicted to saving. So, we match aggressively anything they save.

Oh, interesting.

So, my oldest 2 have constructed— I helped them or the group that we work with on our private equities helped them construct their own little mutual fund. And now, they Donate $1 and we match it with $10.

Oh, wow.

And so, it's just this, I just want them to feel that little bit of serotonin of like saving. And, you know, now I have my first kid going to college. And so, I think that was like the first book that for me was just like trying to reframe everything from a car somebody's driving to a home to other things to sort of understand what real wealth looks like.

That's awesome.

Yeah.

My dad lived Millionaire Next Door to a T.

Yeah.

I think, I don't know if you've heard my story before, but he, I mean, I had no idea that he had any amount of money growing up.

That's awesome.

And I mean, looking back, I'm like, wow, what a, what a guy. He drove a car with a dent in the door for years. It was a nice— nothing bad, but nothing crazy nice either.

Yeah.

And, you know, and he really did that. He lived that to a tee. And then finally, when all of his kids were out of the house, then he went and he bought a pretty nice house and he has a nicer car now and stuff. And he's still very conservative, though. But I think it's just how he was raised. But I, I look back and go, wow, what a, what a, what a blessing that was for me to be raised in that household and what he's done for us as kids. And I just, I respect that a lot. It's pretty cool. Yeah.

Okay. 2 final questions.

I know you got to race. We'll get you out of here. Um, ways that people can look you guys up or find you or connect to you online, what's the best way?

Yeah, album.vc is the website. Um, and, uh, you know, the best way if you're an entrepreneur with a startup is to usually find like a founder that we've already backed. Like, you know, it surprises me when I get a cold outreach on LinkedIn with a deck just because is that like the best way you could reach out? So album.vc, though, is the website we're all on. You know, LinkedIn and Twitter.

Cool. So, Alvin VC, find an existing founder if you can and come through them.

That's right.

That's the best way to do it.

That's right.

Yeah. Love it. And then final question. I love asking my guests this question. If you could leave this audience with one thing that you felt was most valuable, I know today we just kind of talked business, but I'd love to hear if it's family, spiritual, it could be religion, it could be politics, it could be business, whatever thing. But if there's something that you felt was most valuable you'd want to leave with this audience for a minute or 2, What would that thing be?

Yeah, I think it's— let me give the context. So my first, like, job that turned into, you know, my first business was in Detroit, Michigan. And, and what I remember, like, so vividly about that— and now I'm actually flying this Sunday to Detroit to take my daughter to visit the University of Michigan, one of the schools she was accepted to. And I'm looking forward to it because Detroit is so nostalgic for me. And what I can tell you And what I can tell you then was I had no money. Somebody had to cosign on the apartment that me and my wife were renting. We lived in that apartment with my co-founder, another guy. We were newly married, so it was weird. You're like newlyweds living, you know—

You have another guy there.

Another guy living there.

Yeah.

And this was when Wendy's had their dollar menu. They were the first ones to have the dollar menu. Because for $3, I could get 2 junior bacon cheeses and some fries. And like, those junior bacon cheeseburgers tasted so good, and they don't anymore. I went back, I went to a Wendy's, I was like, it's just not good anymore.

Yeah.

And what's interesting about that time was we had no money. We were, you know, living in a simple apartment. I would come home and kind of drive by the— no, my wife would, would look and identify furniture like in the dumpster, you know, from people who had like used it just lightly. And then we'd like take it. we thought it was like, we thought we were so smart. We were so happy. We were so happy. Didn't have, of course, the kids that we have now, which we love and adore, but we didn't have fancy vacations at the time. Like the trip to New York City that we took was piling in my car, you know, staying in, you know, the cheapest part of Manhattan that we could afford. But we were so happy. So like, I think the bit of advice I would give is, you know, it is, it is awesome to see the power and the leverage of software. of capital and the things that we— the other forms of leverage that we find. Like, it is remarkable. But, you know, it doesn't give you any greater leverage on happiness for sure. It is harder now to find the same level of happiness in some ways because think about it, I have to— to find the same level of happiness with a burger, like, I'm comparing it to all the burgers I've eaten. And like, again, that burger was so delicious and simple. So I would just say for those, especially those starting out, for those who took a hard hit in whatever, you know, the current economy, in your startup, you know, in trying to fundraise right now when it's tough, like, don't let that be confused or correlated too tightly to your happiness. Because I think happiness is something we all, you know, have access to regardless of the financial things and the successes of career that we pursue.

Mm-hmm.

Which, again, they can go beautifully hand in hand. Like, like I, I am thrilled to actually go back to Detroit in particular with my sweet daughter, focus 100% for that 24 hours, you know, that we're, we're out there together like that will be amazing. And I think on par or better than any experience I had before we had kids. But, but yeah, I think these relative happiness can be had at any stage of our career.

I love that. What a great story. It's amazing. That's awesome. Awesome. Sid, thanks for coming on today.

Yeah, man.

Sid Cromenach, everybody. Go follow him on @albumbc. It's amazing. Thanks for coming on.

Yeah, thanks, dude.

Okay, that was it. I got you out.

Okay.

Hopefully on time.