Chad Byers - Co-Founder & GP of Susa Ventures; Gain Insight into Early Stage Investing

All right, welcome back to the Casey Adams Show. Today I am joined by Chad Byers, the co founder and general partner at suse Ventures. Thanks so much for coming the show, Chad.

Thanks for having me.

Absolutely, man. So you've been in venture for a while and I think just from an, from a business perspective, what led you into starting your own venture fund and you know, what was your, the origin story of SUSE?

Yeah, so I've now spent about 10 years in ventures. I'm a dinosaur in terms of how long I've been doing it. But the background story is I was born and raised in the San Francisco Bay area. I think only with age do you get the perspective of how lucky and awesome that is. And both, I mean, just from exposure to startups and technology, but also just culturally, there's an acceptance of risk, there's an acceptance of failure. I think that stuff kind of bleeds into you a little bit through osmosis, being based there. And so the background for me is my dad was actually in venture and as a kid you don't really pay attention to what your parents do much other than I noticed that he loved what he did. And so as I got older, my interest was always kind of more from an entrepreneurial standpoint. I was always starting little companies and businesses as a kid. I was fascinated with the idea that you could spend your energy, build something that could make money all on your own if you just grind it hard enough. And so that kind of pattern of starting little projects, I wouldn't call them businesses, I call them projects. And we can talk about some of them later. You know, after school I did the thing that people tell you to do, which is go get operating experience. So I joined a startup, kind of a mid stage startup, and ended up making it to an ipo. And I got to see that journey. And with some of the proceeds there, I was like, all right, what should I do next? I found myself at night watching startup pitch videos and I started going to YC Demo Day and Techstars and all these TechCrunch Disrupt, all these events, like really anything I could on nights and weekends. And this was 2010 and 2011. And I was thinking, well, if I'm doing this with my free time, I might as well try to make that my full time thing. And so kind of full circle came back to what I was exposed to obviously as a kid through, through my dad and through kind of the broader community and decided, you know, venture looks really, really fun, I want to go try this. But I wanted to try it my own way. I didn't want to join a fund back to the kind of entrepreneurial roots. I wanted to start a fund, have it feel like a startup or a business, and get to build from scratch and kind of define what, how, or how we wanted to do the business. And so we started at the seed stage in 2013, primarily because I felt like that was the stage that I would love the most. Right. A couple people with an idea getting something off the ground. It felt very akin to what I loved in early stage project building or company building, whatever you want to call it, but a group of people trying to build something. And so that was really the impetus and got the fund off the ground in 2013, and we've been doing it ever since. Wow.

10 years in the game. I'd love to hear that. When it comes to. I'd love to dive into some of the early stage projects, as you said, that you would start in your foundational years in the entrepreneurial journey. Like, what were some of those projects and why?

Yeah, so probably the most fun one was in 2011, I was living in New York City. So the year before we started a firm, about two and a year before we started, Suse and I went to a live taping of the Jon Stewart show, the Daily show. And Jon Stewart was the host, and he had Peter Dinklage from Game of Thrones, the actor who played Tyrion Lannister on the show. And they were talking about the look on someone's face when they watched too much Game of Thrones. And Jon Stewart says, it's nerd Glaze. And he went on to say, if someone doesn't own nerdglaze.com they should buy it right now. That was direct quote in the table.

No way.

And everyone kind of laughed. And I go to dinner after the show, and I'm just sitting there and I'm like, that's not a live show. That's taped. And he just said a dot com. So I go on my phone on hover.com and I buy nerd glaze.com.

No one bought it yet.

I put up a landing page that says big things coming with a picture of Peter Dinklage and just an email submit bar. I set up Google Analytics in like two hours. I leave the dinner immediately, early, go home, and as it launches, East Coast, Central west coast, I get about 150,000 page views.

Wait, so you were live in the audience watching this show?

I was live in the audience. And they tape it live, Right. And then they show it later. Yep. And so it just dawned on me. I was like, this is crazy. Like, what a crazy opportunity. And so I buy the domain and I put Google Analytics on it, and I watch it go live, and I just see the crazy spikes as it hits even east coast, central, west coast time when they air the show. We ended up getting 50,000 emails submitted into this website, and we had no idea. By we, I mean I had no idea what to do with it. And over the next year, I ended up getting friends, and we turned it into a nerd editorial blog. Think of it as, you know, barstool sports or, you know, bleacher Report, but for nerd topics. So our topics were anime and video games and movies and TV shows and all sorts of stuff, all in the nerd genre. We ended up having 50 writers writing articles. We had editors. Our articles get posted to Reddit. It would take down the whole site because we'd spike to a couple hundred thousand views in a day. And it was all on the piggyback of this moment. And it kind of built over time. We had Facebook and Twitter and all sorts of stuff, and this was kind of 2011, and it consumed so much of my time. At a point I was like, I can't keep doing this. I either need to do this or go do something else. But, like, stories like that are what I love in, like, the entrepreneurial game of just these moments in time or a thing you want to build or something you can't live without, and you get to go put a bunch of time, energy, and sweat and learn a ton. And that was like one of the fun, really fun kind of project company examples.

That is so great. Like, talk about just, you know, opportunities come and you can either miss them or just strike on it.

Totally, totally. I think that's a big part of entrepreneurship.

Were you someone prior to that that was like buying domains for different projects and saying, oh, I'll do this, I'll do that, or when you heard this idea of like, oh, like, let me go buy a domain. Was that a new concept to you or what were you thinking about it back then?

I was definitely a little bit of a squatter on domains because I think as an entrepreneur or someone who thinks very entrepreneurial, you're always thinking about projects. I mean, I have 10 in my head right now that I would go start if I wasn't doing Susan. So, you know, you just can't help but dream. And so I owned so much random stuff. And so the idea of buying a demand was Very familiar to me.

Got it. No, that's awesome. I want to dive into like current day venture, you know, where do you guys spend your time? I'm familiar with some of the investments you've made Robinhood and I want to make sure we get to the stories there. But where do you guys spend your time as a firm and like when it comes to your day to day, how are you looking at companies and what has been your approach to that?

Yeah, so suse Ventures is primarily a early stage venture fund. So we are investing in the pre seed and seed stage of businesses when they are a couple people maybe with a product, maybe pre product. But really in that phase as a firm we write checks of about 1 to 2 million. So we're often the lead or co lead of these seed rounds and we spend our time in five areas and we've been doing so since the start. So we've been doing this now for a decade and these areas have really compounded for us. One is fintech. So you mentioned stuff like robinhood on the B2B side or B2C side. We've done quite a bit on the B2B side as well. Infrastructure and stuff like that that powers the fintech revolution. The second is healthcare. So we've done investments in stuff like Viz, AI which people might not be familiar with, but it's a unicorn now we help lead the seed round. They build machine vision technology that can auto identify strokes and CT images and we sell that software into hospitals. Talk Fred Links about that. But fascinating. Really cool business. We do supply chain logistics. So we were in the seed round of Flexport which is now about 8 billion in value class done by Andreessen Horowitz and Shopify. We did a company called Stored which is now over a billion. So love stuff in the logistics and the supply chain space broadly we do kind of B2B software, a lot of vertical software. So think about software to help run a business, a system of record, stuff like that. And then lastly we do infrastructure and developer tool investing. Across all those categories we pretty much do software. We don't really touch hardware or robotics or many of these other things, you know, absent from that list as you noted, but probably, you know, crypto. So there's a bunch of categories we haven't done over those years. Got it.

That's incredible. And you know, I got to ask, you know, it's every fund manager's dream to, to strike that one unicorn, right? You've, you've done this time and time again. Like what, what do you think has led to the success of suse when it comes to, you know, the opportunity to get into deals, your network and the ability to meet and speak to founders. Like what has been your key to deal flow and getting into these great deals at the times that you did?

Yeah. So I think early stage investing for me really comes down to two things. And one could also say if I was to evaluate an early stage investor, this is how I would underwrite that. And I've done that. I've become an LP and 15 other managers that I've wanted to help put in business. And what I look for is essentially one, it's all about network. Because the seed stages is meeting entrepreneurs before or at the time of company creation. By definition you can't have sourced it on the web. You don't know that it exists. The series B or C, the constellation of businesses raising a C exists, it's on the Internet, there's data there. And so you have to have a network. And what does that mean? Now that could be a general network, like you are in a startup hub, New York or the Bay Area and you just meet a ton of really brilliant people who could start businesses. Or it means you have depth of expertise. Right. So you know everyone starting companies in aerospace or whatever that is. And so you have to merge a network. That's the first thing with the ability to assess what brilliant entrepreneurs look like. And I'm a big founder first investor. People talk about markets or products or other things. I tend to be a people first investor. And the way that I describe my ability to generate taste is I spend as much time as I possibly can in my day to day with the top founders of the world. So I've become friends with many of our top founders, I've become friends with many top founders outside of our portfolio. And almost by just living, you develop pattern recognition of what exceptional looks like and then you go try to find those patterns in the next folks. Now patterns don't mean that they all look the same, they all talk the same, they all have this come from the same college. But it's almost a like way of life. It's an obsession. It is the ability to grind, it's one's clarity and vision. It's many of these kind of like less tangible, more qualitative things than quantitative. But there's certainly a feeling, I'm sure you've interviewed people on the show, amazing entrepreneurs. There's a feeling when you're around just like really exceptional founders, that spikes for me and I Meet thousands of founders a year and only a couple times do I feel that a year. And I just try to take advantage of those moments. And now not all those companies will be successful. But if I do that well enough and I stick to my process, then hopefully some basket of those will play out well over time.

Absolutely. I love that thesis. And just the ability to be a founder first fund I think is very incredible. I want to take it back to when you were starting suse. What was your process of raising a fund when you did and how do you believe it has changed if you were to go and raise a fund today? Just. I would love to hear your thought process on that.

Yeah, so our first fund was 25 million. It took us about 11 months to raise. So I think by all definitions that's long ish relative to the last decade now, not including the last year, which we'll talk to in your question. And what's interesting is we had four people so we got to collectively pool from all four of our networks. My partners at the time were far more experienced and impressive than me. And it was still very hard. And then add into the fact that I also came from a family where my dad did venture our network. I was already extremely lucky to have access to things that the average person probably doesn't. And it was still hard. So I think it's important just to acknowledge one, I was lucky, we were lucky and it was still difficult. And so I just have immense respect for people that raise first time funds. It is so difficult. It was easier then than it is today, but it was still hard. Yeah. We started with only family offices. I talked to 50 institutions. Institutions are endowments and foundations and these types of folks. All 50 said no. We went over 50 batting coverage with I guess batting average of zero with institutions. And so it was a bunch of small checks. Well, relative small in LP terms, 50k to 250k kind of putting us in business. And thank God we delivered for those folks that funds now over 5x return could be a 10x kind of plus fund on paper so far. And that's kind of set off on our journey. You know, today's funding environment. As I mentioned, I'm a limited partner. So I have now backed 15 ish emerging managers who are raising funds between 5 and 50 million. And the reason I did that is I wanted to help do what people did for us with this next generation of managers. I also intentionally select for folks who don't come from a background like myself, right. Who kind of have no connections who are just trying to take a bunch of risk in life and really grind. And it's been a blast underwriting those managers. All of those have raised in the last couple years and I can certainly tell you it's been significantly harder for them. It's a really tough market right now. Right. We know all the macro stuff happening, we know the stuff that's happening with interest rates, the pullback of tech, what's happened in crypto, what's happening in mid stage and late stage growth, you know, valuation resets. That is a huge suck of capital out of the venture market. And so I do believe though, the managers that do persevere and do get in business, this will be an incredible early stage venture vintage. And when I always tell managers that I end up becoming an LPN is if you set out to raise 40, you raise 20. It's okay, it hurts your ego. I've been there, I know what that feels like. But just get in business, prove that you can make great investments and the rest will be history if you do well.

Yeah, no, I love that. So you said you're an LP into 15 different fund managers and I know you briefly touched on it, but when you're investing into different funds the same way you're looking at different companies, it's founder first. How do you approach these different fund managers and what is the difference of fundraising? 5 million or 50 million? Do you think about it differently or how do you think about investing as an lp?

Yeah. So you brought up an incredible point which is fundamental to all fund management, which is the size of your fund is hugely predictive of what strategy you should implement. And also I always say fund math is undefeated. And what I mean by that is it's just harder to generate bigger multiples on bigger funds. Like that's just flat out true. Now we're talking, it's obviously very different when you're talking about orders of magnitude. So 10 versus 100 versus a billion dollar fund.

Yeah.

But even within a 5 million or $50 million fund, it's a materially different size fund, especially at the seed stage. You know, just to play this out, if you have a $5 million fund, you might be doing 50 to 100k checks. If you have a $50 million fund, you might be writing million dollar checks. That's a materially different place you're playing in the early stage venture ecosystem, if you're writing a million dollar check, you have to have a real brand that can win competitive deals time and time again. And so I love small Vintages. There's a manager named Nicole Wishoff that I'm just a huge fan of. She's based in Nashville, but she's on a plane. 24 7, works harder than anyone I know, has an incredible network. It was a no brainer kind of back for me. I think she's going to be widely successful and her first fund was 5 million and I was like I'll take as much of that fund as I can possibly get because fund math is undefeated. I think this can be an incredible fund. If you just hit a single winner, it can be a multiple of the fund. And the way I really think about fund construction when folks pitch me is if, if your winner can't return your fund with your fund model. I typically don't love that. I really believe venture you should build a portfolio construction and a strategy where a true winner call the winner over a billion dollar outcome which we all forgot during the age of unicorns. In the last decade getting a billion dollar plus outcome is really rare. It's really, really hard. And so if you get one of those, it should hopefully return your fund if your fund model is correct.

Got it. No, I love that. Just the fun math for you. As someone that's been in the venture space for 10 years now, how do you describe your journey in terms of you got in 2013, you missed that 2008 window. How have you described these past 10 years? Especially as a founder myself, I went out and we raised a Pre seed round 1.5 million in 2021. It was such a different playing field to raise that, you know, that first round of funding for us than it is today. And I, I'm thinking about it in a completely different lens. So for you as a fund manager, what are the key years or the key moments that you've had to whether that's change your approach or just start thinking about things differently. Especially today in 2023 given the, the points that you brought up about macroeconomic dimes and everything there.

Yeah, we didn't know how good we all had it. I think that's the summer for sure. We all had it better than we even knew at the time. So venture capital, if you look at benchmark return data of the whole industry over time, it's highly vintage dependent vintage meaning the year in which those dollars were put in the ground into early stage companies. Vintages have huge outcomes on venture returns. And the reason for that is quite simple. Right. If you think about a company funded in 2010 or 11, they had a 10 year bull run ahead of them to go, continue to raise capital in. And so if you were doing okay, you could still raise capital and have a chance to turn over the next card. In a typical funding market, you're not in a bull run for a decade. You have these tough cycles where it'll kill companies that aren't performing exceptionally. You had this artificially high success rate or perceived success rate of dollars raised and valuation escalations. You had an artificially low mortality rate in that past decade. We're now entering a period that looks probably more like the average year of history, which is dollars flow to exceptional companies and exceptional founders. Good and okay. Companies don't get funded or struggle to get funded. You have much more normal failure rates. Traditionally, more than half of early stage companies will fail to return 1x capital. That's kind of right. We're in this business of this outlaw power law business of what are the companies that can be 100x,000x's most will never live up to that vision. And so in a lot of ways, today's market and as a manager, you tell yourself, or we're just going back to the first principles of venture investing, which is you have to be more disciplined on price entry price matters. You have to be more disciplined on portfolio construction and how many deals you're doing. Not caught up in hype cycles. Think about the capital efficiency of business models. It's all these things we all knew, but it's very easy to forget when the times are so good and there's this real sense of fomo. And I think the whole industry clearly got caught up in that. And it's something I harp on our team all the time is this just kind of return to what we're really doing here. And it's funny because as a manager of early stage, you can really wear two hats. You can think about venture as this like business and think about it very strategically around our portfolio construction, number of deals we should do and our check size and our ownership and how does that play out from a fund model, etc. On the flip side, the other way fun way to think about it is let's go meet a couple thousand entrepreneurs. Let's back 40 of them. That's how many we put in a single portfolio. And the fun part is like, let's just go see if a couple of those can be really important businesses in the world. And if it does all of the math and all that's going to take care of itself for the type of business we do, which is early stage concentrated High ownership, relatively small portfolio where we know is if we get a winner in there, the numbers are going to take care of themselves. And so there's kind of two ways to look at our business, but it's certainly been a very grounding moment to realize that not all markets are up like many people our age got to experience.

Absolutely. I love that. Just how you think about that. I would love to ask, just coming from a growing up in a environment such as sf, what's your current mindset on the city itself? Whether that's living there or be just having a fun there, the companies there would love to get your personal feedback on just the city as a whole in its current state of business, tech, living there, et cetera.

Yeah, this is, this is the most talked about topic on Twitter for sure. So look, I'm a little biased because it's, it's my hometown. I think San Francisco Bay area is a very special place for some of the things I talked about. Right. It is an incredible place to start a business. Culturally, having a place that embraces risk, embraces failure in the pursuit of it sounds cheesy, but changing the world is true. I mean there are hundreds of businesses there that have materially changed the world at a scale that no one thought possible. These businesses are now trillions of dollars. In the case of an Apple or Google or others. It's mind blowing the scale that these things have reached and then just the next gen of entrepreneurs and the number of people they're grinding is what makes that place so special. So I think first it's probably good for me to admit that I have a bias of love for the Bay. Do I understand the criticisms? Of course. Without getting into all the political stuff, because we can debate that all day long on Twitter. Look, it's clearly been mismanaged. It's a beautiful city that's sitting in this incredible place with this amazing amount of tax based revenue that should be a metropolis and it's not. And so clearly something went off the rails there. But what I will say is I firmly believe as an entrepreneur or an investor, if you take your, your life and your career very seriously, you should really consider moving there to pursue that. I just truly think you increase your chances of potential success. And I'm talking very broadly. Right. If you're doing something very specific, maybe in entertainment in LA, or you know, hardware, aerospace down here with, with Hadrian and SpaceX and others in LA, you know, obviously has a special place. But the Bay Area is this very unique environment and I'll tell you my litmus test for how the Bay Area is doing as a startup market. It's not dollars in, dollars out, because that's all lagging indicators of how it's doing. What I, what I consider the health of San Francisco from an entrepreneurial perspective is when you go to a random coffee shop in the Mission or wherever, are there young people hacking and building companies? Like, are there a bunch of people on their laptops starting businesses in a coffee shop? They're living in their friends, you know, extra bedroom. And that just came back after a four year brutal hiatus during COVID where SF truly was bad. Yeah, I feel that again. And I feel the pullback to the Bay. And that gets me very excited because I think debating whether it's a great city or bad city is just missing the point of like, I thought we were all on the same team, that we all believe tech can be a force for good in the world. And if you do believe that, then you root for all the ecosystems of the world, whether it's New York, Miami. I truly don't care to be doing well because it's net, it's net good. And so I'm excited that that feels back and, and I'll speak personally for myself. During COVID I spent time in other places. I finally took a moment where I've lived in SF for probably 30 of my 36 years of my life. I am going to kind of re establish myself as my home base because I truly believe what I just said. I think it's like the best place best and the best place to build.

I love your perspective there. Thank you for sharing that. When it comes to just your. The influence of starting a fund, obviously coming from SF yourself, when it comes to just the different funds that maybe you've modeled after or that have inspired you, do you have any GPS or funds that you look to as not only clear success, but just funds that you say, hey, this is the direction that we're moving and these are funds that have inspired me as a gp. Yeah.

So the thing I probably respect the most and who inspire me are people who think about the business slightly differently and they employ a model that is unique to themselves and they stick with that. So the common cases would be kind of a USV or a benchmark not increasing their fund size too much and chasing what everybody else did as an example of someone who sticks to a strategy because they believe it works and it compounds over time. Furthermore, I think I probably take more inspiration from specific people than firms and the people I take inspiration from typically are this rare combo of they're a good investor and they're a firm builder. You typically don't find that in venture. You have some brilliant investors, genius investors. They're typically really bad at people management, really bad at running a firm, really bad at building a firm and firm strategy and all the things that go into what people don't see at venture firms, which is the other 50% of the work is non investing related. It's just like running any normal business. You have to set up a payroll and you have to do all those other things that a normal startup has to do and people that can do that both of those well is quite rare. A Josh Koppelman comes to mind. You know, these folks that are former operators turned investors tend to be better combos of these two because they built large startups or businesses before. They understand operations, they understand hiring, they understand culture, they understand strategy, they understand just how to build a business. And I think folks like that are where I draw a lot of inspiration from. And that's what I try to be is I want to be a competent, strong investor, but I also want to be a firm builder. And I truly take joy from both. If I was just doing one or the other, I probably wouldn't feel fully fulfilled in my day to day.

Love that. That's great perspective. Outside of investing, where do you, where do you like to spend your time and what are some other ways that, yeah, you, you fill your time in terms of just day to day?

Yeah, so I, I, I, there's two big passion areas for me in life. One is outside of work, one is sports in general. So I plan a lot of adult sports league and I'm on a coed flag football team with okay a bunch of friends. I play beach volleyball, I surf, I try to do as many outdoor physical activities as possible to make my body tired so I can go home and think clearly. And I have quite severe ADD typically so that helps, that helps counter it for me. The other is video games. So I played video games growing up my whole life. I've always loved kind of the strategic competitive side of, of video games. I'm a very competitive person. So whether it's work or sports or video games, like I generally love anything that's highly competitive and you can try to be the best and win. And so even in video games, you know, I'd say I probably don't enjoy them as much as the average person because I usually just am trying to like get better. So as opposed to Just enjoying the game. I'm usually reading as much strategy as I possibly can and trying to get better. And I've gotten coaches. I get quite, like, nerdy about it, but those are the two big buckets. I spend a material amount of my time outside of work, and I found that both are. Are quite complementary to, you know, a quote unquote desk job in terms of just getting my mind out of the work obsession.

So, yeah, no, I love that. I. I grew up playing sports a lot. That was like my whole identity. Played hockey for 10 years, lacrosse. And a part of my story that really led me into business. Entrepreneurship was sophomore year of high school, playing football. I ended up getting injured. I'm in a neck brace for six months, almost. Almost paralyzed. That was the. A whole catalyst to, like, going down a whole different rabbit hole of my identity, which was business and entrepreneurship. And like, that was a. Not only a setback, but just like a true pivoting point in my life of, like, how I looked at myself in the world. Do you have any moments like that in your life where you've had to, like, rethink about your identity or, like, where you're spending your time or those critical, you know, pivoting points that you could reflect on?

Nothing quite as. As severe as that one. I think. I actually, growing up, as I mentioned, I never kind of treated my add, but I certainly had a very kind of overly energetic, addictive kind of person. I always thought myself, you know, I was actually going to pursue a career completely outside of tech business, whatever. I thought I needed something that was more outdoors. For a long time, I wanted to be a park ranger. I studied environmental science in college. I quite literally took classes, like doing population studies of squirrels in the Rocky Mountains. I really thought I would just, like, patrol Yosemite and live outdoors and hike a lot and be really happy with, like, a dog. That was, like, my vision at the time, like cruising around with a golden retriever and a pickup truck. And so, you know, I think after college that, you know, I moved back to the bay. That reality kind of set in that, you know, despite the romantic vision of that life, it probably would have left me unfulfilled in some of my other attributes, which is highly competitive at the end of the day, want to feel a deep sense of purpose to what we're doing and want to really build. And so it was probably just this pivotal moment in life where you've finished college and you're thinking about what your career is going to look like. And I didn't really have, like, an injury like you're talking about, but I certainly remember kind of in an internal conversation with myself about, what do you really want in life? What do you want to look back on in 50 years and think that was a life well worth spent? And that was kind of the decision to pivot and end up kind of taking the path that I took. And it's obviously been very meaningful. And I think the good news is, if you want to go wander around a park, you always can.

So, yeah, I love that you say just, like, your idea of competition and spending your time and effort being competitive, like, what does. What drives you when it comes to competing, whether that's in sports or in a business world of finding the right deal or working with great founders. What does competition mean to you? And has it changed over time?

So that's a great question. I think the recent quote comes to mind. I think the. When the Bucks lost in the NBA playoffs, their All Star, they're like, this is disappointing to lose or something. And he said something on the order. I'm going to butcher the quote. But, like, we didn't lose. We're, like, learning, right? Like, every loss is a learning moment. And this sounds very cheesy, but I think what I love about competition, whether it's with someone else in a market or with yourself, is there's this concept of if you can get better every day. And, you know, my friends would say that playing games with me is sometimes not fun, like, even casual pickup games, because I take it way too seriously and I get way too competitive, but I truly can't help it. It's, like, built into my DNA. And, you know, I think a simple way to explain it would be even in things that aren't competitive with others. I'm very competitive with myself. So when it comes to, like, fitness or sports, I do triathlons and other races. I'm, like, heavily quantitative and tracking all of my metrics around speed and getting better every day, whether it's my biking, my running, my swimming, whether it's my VO2 Max, or, like, fundamental things around health. I'm just highly competitive myself. I just truly enjoy the process of grinding and trying to get better. And I thought a lot about where that comes from. My brother is quite successful in his own right, but he's not actually as competitive as I am. So, you know, he derives satisfaction not from the same way, not from that same level of competition, but from more of a, like, a true curiosity, intellectual curiosity, standpoint. And so I have to believe like some, certainly some of it's probably genetic, some of it's probably cultural. I think probably a little bit, you know, being the little brother to someone who's like, clearly weight, my brother's significantly smarter than me and more accomplished. In other words, probably a little bit was like being the little brother to that and needing to like define myself and try to live up to, to that, whether it was conscious or unconscious. But it just feels very ingrained and I tend to really connect with people that are competitive. Not to say that you need to be in life and you might actually be happier being not as competitive as, you know, really competitive people. But I certainly find myself drawn to people who, who think like that. And I do think in entrepreneurship, almost all the really successful entrepreneurs I know are highly, highly competitive people. It's definitely a trait that I look for in people.

Yeah, I could not agree more. I mean, even just relating to you, I grew up a youngest of three, three boys, two older brothers. And I think just like that competitive nature in sports and trying to play up in my hockey league when I was 8 years old, playing with a 13 year old, that simple understanding of just living up to, you know, people that may be quote, unquote, better than you and to live in that competitive mindset. I love that you talk about triathlons. I happened to run my first marathon last December. It was quite the experience. I learned not only how to be the most competitive with myself, but just it truly instilled in me so much about business and life just from doing that. What is your, what is your journey looked like when it comes to triathlons, running, biking. I would love to hear that because I think there's so many alignments of just how it correlates to business and how you think about the world, at least for me, and would love to hear your perspective on that.

Yeah, I think the two things that immediately jump to mind are one, you know this and for anyone that's done endurance sports, but you could extrapolate this to, to really anything in life, even if someone you know isn't, isn't doing it in a sports arena or a physical arena, but other ways is like whatever you're doing that's really hard is eventually mostly going to test your mental fortitude. So even if it's a physical thing, there are moments during a marathon or a triathlon where I'm literally miserable, everything hurts, I can barely breathe anymore. Everything in your mind is telling you that this is unnatural and you should just start walking or quit. And it's in those like true moments, three hours, three and a half hours into the race where you actually truly test yourself. It's not the first hour. It's like you have to put in the time to get to that breaking point, that test point. And it's in the moments like that in life where you choose not to that I find the most satisfaction. And if I look back on my life, there's moments like that in some of these physical things that even feel just as, you know, just as meaningful as career or business related things. It's like testing your mental fortitude, I think, is that idea. And that extrapolates to a lot of life, right? A lot of life is putting in the time, working. And you only really get tested when you've like gone past the first couple hurdles and pushed deep enough or far enough to feel that pressure. And I think in entrepreneurship, and I talk to a lot of CEOs in our portfolio, they feel this like the early stage of company building is hard, but then you can get to a series D and you have hundreds of people and the pressure's mounted. You've raised $100 million. There's an immense amount of pressure on a human. It is an extremely difficult thing to go through psychologically and physically. Physically it is stress and time consuming. And I think there's a lot of analogies of there. The people that decide to just push through that fifth wall of kind of true misery and grit, I think is very cool. The second for me is triathlons became a very social thing for me. I have a group of friends who we all kind of do it together when we have a group thread. And it's the power of a community where if it wasn't for that text thread and that group and the accountability that that group provides, I wouldn't train as hard, I wouldn't do as well. And it's like true joy to do it with a group of people. And that also in perfect ways extrapolates to company building, entrepreneurship fund or whatever kind of pursuit you want, which is like, we are naturally social beings as humans. And you can certainly, the cheesy saying is true. You can certainly go farther as a group. And I think a lot about that in early company building, which is like, you can't have one exceptional person in a company. The group kind of needs to make sense collectively and they need to push each other and rely on each other for support. And that's been very true with this little crew that I do the triathlon stuff with. And so those are probably like the two that really jumped to mind.

Those are great. I think just like that, the idea of mental fortitude and your experience there, that's awesome. I interviewed a guy, his name is James Lawrence. Are you familiar with him? He's. He goes by the name of the Iron Cowboy.

Yeah.

So he's a beast. And like I was when I was prepping for my marathon, I had him on the show. And for people that don't know, he broke the record of consistent Ironmans back to back. So the previous record was five. Then he ended up doing 50 ironmans in 50 in 50 days. In all.

I watched this, I watched a video on this guy.

Okay. In all 50 states. And then he. To make it even better in 2020, I believe it was, he doubled his record and did 101 Ironmans back to back in 101 days. And like this, this mindset of what you're talking about, of like that uncharted territory, he. He described it as the Hurt Locker. It's like in order to really test yourself, you have to be on mile 23, 24 and to open that door to what he deemed as the Hurt Locker. And I think there's so many analogies in business right, when it comes to whether that's raising a fund, like to closing it, to getting your company acquired, whatever it may be like, you have to go the distance to really understand what you're made of. And everything else is just the, you know, the, not the test run, but just the practice to really test yourself in the most difficult times.

But absolutely, there's. I'm going to forget her name, but I just followed this woman on Twitter because it came up in my feed or whatever. She ran an ultra marathon, which I think is like 32 mile. It's 50 cams for 200 straight days.

She's a beast.

Like I just tend like the content I love I will watch all day long is stuff like the Last Dance or people like this or the Iron Cowboy. Like any human that's pushing their mental or physical limits to that level or like the best chess players. Yeah, I just am fascinated with like those people captivate my mind and I, I just think people like that are just so fascinating and so cool and, and yeah, shout out to all people that do that kind of stuff. I love it for sure.

No, I could not agree more. In the spirit of time, Chad, just when you think about the future, or let's say the current state of venture, when you think about you and your team and the companies that you have invested in what excites you the most in a positive way, but also in more so challenging way that you have to get through over the next 1, 2, 5 years as you're thinking about it.

Yeah, I'll say the challenge and then what we're doing and why that excites me. So the challenge is that venture is harder than it's ever been for a couple of reasons. One is there's more funds, there's more competition, there's more dollars than ever before. Two is AI has thrown this monkey wrench into the market where I am under the belief that a lot of the value is going to accrue to the large incumbent companies because of scale and resources and energy. And it makes early stage company investing within AI. When I say AI, it could be tools, but also just companies that are using AI to build whatever application in the world they want. It makes it very hard. They can become obsolete overnight and so it's hard to invest today. And I think our reaction to those two is really using our strategy as our advantage. So what's happened in venture is you've had a lot of funds become these mega platforms, multibillion dollar, they do every stage. You've had 500 new entrants over the last couple years doing micro funds. It's left this weird gap in between which is there's not that many hundred, 200, $300 million seed stage focused funds anymore. It's this kind of spot in the market where we can write a bigger check than all the new entrants. We're more stage focused than the mega platforms. We're going to spend more time per company with that entrepreneur. We have a more dedicated brand at this stage. I think we run our playbook and we are more helpful at that stage than any of these other funds and we have the resources to dedicate there. And so the excitement comes for me which is like the market's gotten harder in a lot of ways. But this gap has been created for the stage and the business that we built where I think we can really execute there and execute well over the next decade and be an incredible product for LPs, an incredible product for entrepreneurs, which is an incredibly resourced and well staffed organization specifically designed to help entrepreneurs from the zero to one stage. And that that gets me very excited to go, you know, as an operator go try to execute on that strategy.

I love that and I appreciate you for sharing that and I think just your perspective on that. I hope a lot of people learn from last question before we wrap up, Chad, if you were to give your younger self a piece of advice, you know you have a young version of yourself in 2023. Raising a fund, what your do's and don'ts and just your overall advice to an early stage fund manager.

Oh man, we get this is a dangerous last question because I could go on for an hour with learnings. I'll just rattle off stuff that comes to mind. 1. Build a team. You can go at it alone. It can work. Venture. There's a lot to do when you build a fund to run the fund and invest. I think teams are great. Two is don't worry too much about your first fund size. All that matters is that you say and do what you said you would do. Go execute the strategy you said you'd have and go find great companies. If you do that, you will be able to pick your fund sizes for the rest of your fund your life. The third would be start building relationships with institutional LPs Fund 1. Even though most won't come in, the anchor of our second fund, who wrote us 10 million out of our $50 million second fund said no to me in the first 10 minutes of my first pitch in the first fund, build those relationships early. Cultivate them over time. They'll pay dividends down the road. The fourth is it's a power law business. You have to be helpful to every company, but spend as much time as you possibly can with the great companies. They'll often need the least help. Figure out how to be helpful without them asking. Be proactive. It's easy to say that one's doing great. I'm going to go focus on these others. But that's going to be the one that matters for all of your returns, all of the relationships, all of the network in the future and make sure to invest in those relationships.

That's powerful. Well, Chad, I just want to say thank you so much for coming on the show today. For everyone that doesn't already follow you, where's the best place for them to connect with you and learn more about about Suseventures.

So Twitter just Chad Byers at Chad byers and then suseventures.com but reach out even chadususaventures.com, reach out with anything. Happy to always route internally or help if I can.

Awesome. Well again Chad, thank you so much for coming the show today. I know I learned a lot and I hope the listeners did as well. And yeah, thanks so much for your time.

Thanks Casey. Appreciate it.