Investing in the Next Chapter - Jules Maltz - IVP - Episode #81

I'm looking for that, that, that sign in the entrepreneur that this is something they really, really care about. And that tells me they'll never give up.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own Jo. Today's guest is Jules Maltz. Jules is a venture partner at ivp, one of the premier growth stage investment firms in the world. Over the last decade, he's helped lead investments in some of the most iconic technology companies of our time, including Slack, Dropbox, Grammarly, Mulesoft, D2, Buddy Media, and many, many more. He's known for being a disciplined long term partner to founders, someone who helps companies navigate the transition from, from breakout growth to enduring scale. I could never get him involved in any of my companies, even though I tried very hard. But every founder that I know that has worked with him says he's a great investor to have on your side. Jules has been named to the Forbes Midas list three times and he's now started teaching classes at both Berkeley and Stanford. Please welcome Jules Maltz.

David, thanks for having me.

I'm very excited to have you and thank you for doing this. Okay, first question. So what is the one thing that you look for in the founders or companies that you invest in? Only one thing. I'm sure it's more than one, but if you could only choose one thing.

Yeah, no, it's hard just to pick one thing. But I guess the most important thing I'm really looking for is authenticity and a real passion for doing what they're doing. You know, the people that I get to work with are incredibly intelligent, smart. All entrepreneurs are. I'm looking for something extra that's causing them to sort of have an itch or a need to solve this problem in the world that is different than everyone else. And so if it's something they've personally experienced, if it's something they just really care about because of a family story or because of a past story from a previous company, I really want to hear the why behind it. My most recent investment in Rome is founded by Howard Lerman. And you can just tell, like Howard has an insane desire to build a company bigger than Yext and he really wants to do something in the kind of the new office of the future. And so finding a way for people to work a different way than, you know, than, than they're working, you know, in offices historically through hybrid Technology through better communication through AI you can just tell it's something that, like, he wants to solve for himself and he wants to share it with the world. And so I'm looking for that, that, that sign in the entrepreneur that this is something they really, really care about. And that tells me they'll never give up. And if they never give up, we have a good chance of doing something special together.

That's a good. That's. And that's a good example. I don't know Howard well, but in a couple of times I've seen him speak or he's very intensely, like, he, he really wants to solve. He believes problem.

Yes. And, and it doesn't. It's not about everything in the world. Like, he's, you know, you, you couldn't. I, I, I think it needs to be a problem he really cares about, but when he cares about something, that's all he cares about. And, you know, he's very focused on making Rome a big company. I'm super excited about it. For anyone looking for, you know, technologies to help them work with their employees better, it's an amazing product with fanatical customers, and I think it really comes from Howard's care and, and desire to solve this problem in a really unique way.

How can you tell? So I feel like when you get someone pitching you, I know for myself, you know, the person practicing puts together the deck, and it's like, you know, it's like interviewing someone who has all the canned answers. And how do you. How can you really get down underneath all of that to know if that is truly authentic?

I love asking just the, like, why are you doing this story? You know, and just. And people usually answer that pretty authentically. And, you know, people. I mean, everyone has their canned answer. And there's some people that you can tell. They've, you know, you're the 50th pitch they've done. And. But I'm looking for, like, does it. Does it really matter to them or not? And in the same way that I don't know when I, I grew up in Oregon. And so if I talk about my memories of Oregon, you can tell I really like Oregon and, like, it really matters to me and that the state, the people, you know, the college town that I grew up in, it's something that even, you know, someone who isn't from Oregon could say those same words, but I don't think that you would feel like they were as connected to it as someone who, like, lived it. And I'm looking for people And I don't know if it's their body language or in their eyes or in their, their, their voice or their emotion, but I'm looking for something that helps me realize, wow, this person, this person really, really cares about this and really wants to do this. I meet a lot of business students now because I'm teaching a lot, and they are amazing, and some of them are equally fanatical, but I know when people are doing their, their class project and it's just an idea and not something they're really going to build, you know, they say the words, but they don't have that same emotion. And so if I see a CEO with similar traits where it's like they're saying the words, but it's like, you know, for the grade or for the class or maybe just for their board, they want their next startup, I think it comes out differently than when it's something that someone cares about. And it also, I get the sense that even if they didn't raise money, they're going to be doing this. It's too important. And so it's just a question of, you know, did that do. Can I. Do they want me on the train or can I get on that train too, that they're already, that's already running? It's very different when it's like, hey, I need to raise money to do this. No, these people are doing it anyway.

And how long from the first time that you meet a founder, how long is it from that, you know, this or just in general that, you know, you want to invest or you think you want to invest?

I know pretty quickly that I think I want to invest. And what's interesting about the stage I invest at, which is often at ivp, we're often investing in kind of series B and beyond startups. Is that that emotional connection with the founder and the problem? I mean, we're looking at lots of different companies, and so when we find something that fits and a founder that fits, you know, we can get really excited, often in the first 10 or 15 minutes of a meeting. The, the stage we're investing in, though, the companies have data and numbers. And so we're always trying to balance this concept of, okay, our passion for the entrepreneur and the idea. I kind of think about it on one axis. You know, that can be really high. We also need to see the, the financials, the momentum, the customer references, the, you know, all the different things that we do kind of analytically to verify that. We really want to see both those traits, you know, at A very high level. And so that's super important to us. And it's hard sometimes. I'll meet, you know, companies with amazing CEOs and I'll be, I want to invest in this person. But then you get the data and the churn is too high. And that was, you know, a case with a company, actually. Andrew Dunham, who was. Who is CEO of Hims and hers now a public company. I met him when he pitched his previous company to that kind of a photo sharing site called everalbum. I loved him. I loved the passion that he had. I didn't love the metrics. Luckily we stayed close and when it was time that he was doing his next thing, you know, everything matched up. And it was one of my favorite investments I ever got to work on, Hims and hers. So I love it when you have that combination of great founder, great passion for the problem meets great metrics and, you know, great data that we like looking at too.

It's actually when you say those two things together, I mean, when you combine them first 15 minutes and then you're looking for the authenticity. Interestingly, as I've been helping companies and they're fundraising and founders and they pitch me, they always go right into. I have found that they always go right into the pitch and they start with the slides and they start. And I told someone, literally, this is like two days ago, when you're pitching, start without the slides. Just tell that your story because that's such a big part, why they're going to invest. Don't even worry about this. You know, they had their teams on the last slide and I said, just spend the time with no slide, just talking about yourself and everything. But I didn't really think about. Actually you pick up that authenticity. I, I kind of like to do it because of the story arc and. But actually you're picking up on that authenticity of like, where did they even come up with this idea and do they. Is it actually real or not?

You know, I love that advice you gave and I love it at the beginning too. I mean, every, I mean, different people can pitch in really, you know, different ways and still be successful. But I love, you know, just in the same way, you know, like, when we're getting to know each other, we, we talk about who we are and where we're from and what matters to us. You know, like, we don't launch into, I mean, some people launch into different things, but I love getting to know someone, like on a deeper level. And I, I always felt that Connection with you too. I think you've always done a great job of like kind of bringing your full self and, and the reason you do things to the meetings and that's the reason I've always, you know, I always felt connected to you as well.

Just our turn was too high, but you know, I can't remember. I can't remember.

It was close. I remember that the metrics are very close though. I just, I, I can't remember what hung us.

No, that was actually what it was.

Was it the turn. Oh my.

The turn on.

It's always a turn. It's always a turn for. That's a killer for every company. It's so hard.

So you, so you, you know, you have invested literally, I mean some, some of the really, truly most iconic companies and at early stages, yes, maybe series B, but, but stages before you knew they were going to be the companies that they were. And my, my past, the authenticity. What is it about pitch? When you're getting the pitch or you're getting to understand the business, what are those things that you're looking for that, that are kind of the tells that this is going to be one of those companies, you know, is there something in there that you. Something about the market, about the product, like. Or are you just trusting the founder with the data that you have that, you know, how. How do you see that?

Yeah, I'm so my favorite pitch and I wish I had saved it and I. It's not on the Internet, so maybe. But maybe they'll post it one day because it's not even that confidential of stuff, but my first investment, our investment in Twitter. And I wasn't a partner at the time. I just joined IDP. This is 2009, which is, you know, eons ago. And you know, when, when Twitter had a different. I guess it has a different name now too even. But I, I remember at the time it was EV and Biz running the business because Jack had stepped out for, you know, like a period of time or had, you know, been been stepped out and so for a period of time and, and they pitched our firm. And I remember like walking through the presentation that EV put together and there were very little numbers in it. It was really about like what Twitter could do for the world. And it was stories and images and it, it was almost like this, you know, like, I don't want to say religious, but it was almost this, like a fanatical, like this is what we believe the world will be if we can communicate, you know, with each other in A different way and connect with each other. And there were, you know, there were journalists who were using Twitter to, who had been arrested and then using Twitter to get out of jail. And there were like, you know, people. This is, you know, this is, this was in the time of, you know, lots of different kind of global protests and, and Twitter was kind of really on the side of, of a lot of freedom. And it was just this like, very emotional pitch. And then he followed that up with, with some of the stats on user growth. And I remember this was, this was something where they were growing 50% month over month in usage, which in 2009 is, was like unheard of today, I guess AI companies do that, you know, like in their sleep. But, but it was, it was just incredible to see how quickly the, the product was, was growing and then how fanatical some of the users were. And so again, we're, we're not looking for things, we're looking for things that like, touch a nerve in people that we think can then be translated to millions and millions of more people. We don't want something that's, you know, kind of just a bit better than, than the alternatives out there. And I thought Twitter did an amazing job of doing that. Again, it was all images. And then the funny thing was I was so new to the firm, I said, well, you know, you need a slide on how you're going to make money. And, and you know, they had no revenue at the time and, and ev put a slide in there in the deck, you know, which was, you know, it said, like, how are we going to make money? And then it was just a big question mark and it was just like, Jules told me to put this slide in. We don't know, we have a lot of ideas. It could be advertising, but right now we're just trying to hold on and grow as fast as possible. And I actually thought that answer was really honest. A lot of entrepreneurs, I think, make the mistake of trying to say what they think the VCs want to hear. And he could have built a super detailed model with CPM rates and, you know, impressions and told us that the revenue was going to be 6 million next year. And instead he's like, I'm not focused on that. I'm honestly not. And that really endear him to us and to me in like a fun way and taught me, look, when you don't know the answer, it's okay just to say I don't know or we'll figure it out. You know, I got a lot of other good things going.

Yeah, I think something that I've learned in my own experience that actually in all the interviews that I've done is a lot of first time founders, they feel like like the venture capitalists are their bosses, you know, in a lot of ways. And I've had conversations with so many and, and then I've had conversations with people who are multi time founders and the difference is so stark. Look, I did one with Adam Dell and he was telling me about his current company and he was saying yeah, I pitched something, it wasn't the right idea, it wasn't the right thing. I raised a lot of money for it, but the right thing was this. And he's like, I literally shut it down completely pivoted and went and did this. And I said isn't that hard with a bunch of investors who gave you a lot of money? And he's like, yeah, but they gave me the money to build, to build a company that's successful and if this is not. And I'm going to keep running my head into the wall. But a little bit of that is what you're talking about is like some, you know, I see decks and people put five year projections, it's like their pre product prereview but they have a five year projection to break even and 200 million of AR. That's literally impossible for you to build that like that, that can't be. You have no idea what it's going to look like. You know, and I know, but this, I need this because for the investors to see and then the first meeting they realize it was all to throw out and they're like, well how do I tell the investors that wasn't thing? I'm like, the investors know they did all they've been doing but it's interesting because I do think that, I think that seems to be one of those things that separates A lot of times the best founders is they see the board as their partners and they're part of the journey. And it is hard because the dynamic is a little bit weird. It's hard to see that. But I felt that way first company. I definitely felt like the board was my boss.

Yeah, you know, no, it's, it's a really hard thing because there's this strange dynamic in it. I know, I know. We may talk about it later too, but it's been, it's been interesting. Like you know, like I've, I've always, you know, people are generally very nice to venture capitalists and so I've always Wondered like, are they nice to me because I'm a nice person and they like me or is it because the checkbook? And, and so I've always liked, kind of wondered like there's this weird power dynamic and from my side, I don't think a lot about it because honestly like I see my job is like chasing the entrepreneurs. Like I'm trying to find these great entrepreneurs out there and how do I find the best ones and convince the best ones to take our money versus other firms. So it's, it's funny. But then some entrepreneurs, you know, they're like, wow, that you know, I gotta, I gotta impress IVP or have the numbers, you know, do you know. And so it's this weird, the power dynamic. And I think the more we can just like be ourselves and be authentic and you know, either a match is going to happen or it's not. But, but let's like, you know, it's a little bit like dating I guess. Like you just, you gotta put yourself out there and then be yourself and find the right person who likes you for you. So. And if you're raising venture capital, you gotta have a huge idea. I think that's the one thing like again in some of my teaching that I noticed is like venture is built around the power law on trying to find outcomes that are, you know, 100 X's, 50 Xs, you know, multi, multi billion dollar companies that the, the, the math of venture capital only works if, if a fund or a large fund can get a number of those. So the, so we're, we're looking for entrepreneurs that are, are thinking really big and thinking, you know, thinking about kind of Act 2 and Act 3 and how their company gets bigger and bigger. And so I think that's important and that's why we like seeing the projections that say it's going to be billions of dollars. But I don't know if we actually believe those projections. We just want to believe this could be really, really big. That's the most important thing.

That, that is another lesson again that I learned pitching. I think that even the first time I pitched you and I pitched most of it when I came out to Sand Hill Road and I can, and I was pitching and I remember I was pitching everything about Google Apps and I was pitching this one thing we're doing and we're, and, and actually I think if I had come out and pitched and by the way there's all these new SaaS applications that are coming out and they're going to have the Same problems. And by the way, that's, you know, that's such a different way of telling the same story. And even if it was in the back of my mind, I was scared. And I do find this with especially the real operator type founders, they're kind of scared to say I'm going to take over the world because then I don't really know how I'm going to do it. They're scared to say it. But actually that's what D.C. is because that is the business you're in. I mean, if not, then go bootstrap it or raise friends and family or something like that. But that, that's a really good, that's a, that's a really good lesson. How do you, how do you determine. And maybe this goes back to the data that you have on the businesses when you invest, but how do you determine if someone is just. I want to be careful with the terms. But I, I, you know, the crazy founder who's kind of like, I'm going to change the world and change, you know, blood testing, you know, with a single drop of blood, like that type of thing, like, how do you determine that versus someone who has that huge idea but you know, is, has a logical way of get. Or, or some way of getting there.

It's interesting. Yeah. No, and then the, I don't want to get like in the Theranos and we didn't. I. One, one of our partners actually I think a long time ago got introduced to her and then like, I think we had either asked for some data or something and then it wasn't sent and then a meeting never got scheduled. So like we never really had. So it's an interesting thing. Like it never, it never, it never got scheduled. But, but we had an introduction. Apparently there was an email with her and someone from our firm on it a long time ago. But I, you know, we listen a lot to customers. I mean, on, I am not. I do a little bit of consumer investing, but most of the investing we're doing is, you know, B2B or prosumer. There's a customer and we're looking for again, these fanatical customers that have used the product. Try the product. It's working. We've invested in very few things that are pretty pre customer, pre pre product. We've done pre revenue. But you know, I consider Twitter and Snapchat and you know, a number of those others, like, they really had kind of fanatical users at the time. And so we're, we're often just making sure. That like, there, there's a there there. The customers are getting that really strong roi. We love hearing, you know, I mean, sometimes we'll do diligence calls and the customers, customers will just say, hey, actually I pay 5x more for this product. It's really good. Oh, okay, well, we can raise pricing. That's good. But it sort of speaks to like, the value that they're getting. And so that's important. The harder thing is figuring out like, how sustainable. I know we were talking about it earlier, like, how sustainable are some of these products? Because you can have situations where customers love it now, but then either the world changes or competitive environment changes or something changes and the company doesn't adapt. So we're not always right about like, I think we're right about, like something's working now in the business and we want to invest. We're not always right. About a year from now, two years from now, will it still work? And that, you know, that's the risk we're taking.

Honestly, once you do make the investment into a company, and I have talked to a number of your founders and your reputation truly is like, as a board member, but really, really good. How do you like to communicate with these founders? How do you like them to communicate with you? What is your view on board meetings? Like, how do you think about all of that post investment?

Yeah, I'm pretty adaptable. It's funny, my parents are, were, they're retired now. They're, they were social workers, therapists, so they did individual and marriage counseling. And I don't know if I, like, I wanted to run so far, David, from anything related to psychology or therapy. It took me years before, like, as an adult, before I would even consider going to therapy myself because I, I thought, you know, those are sick people that my parents see. And now I love therapy. I recommend it for everyone listening. Like, if they're not doing it, it's like, it's a great way to help, help yourself and help your mind. And it's, it's super important. But, but just like my parents, like when they have clients, they're, they don't say, okay, these are the six things you're going to want to do. And here's, you know, we're going to tell you exactly what we want. They're often listening about what the person needs. And so the same way when I'm working with the CEO and asking how they want to communicate or how they want to interact, I want to hear what they, how they want to do that. I have some CEOs who are like, I want to have a weekly call with you and you know, like, just for 15 minutes because we're doing a lot of hiring and I want to update you on my hiring plan every week, you know, for the next few months. Or some people want to do a monthly call. Some people I really think honestly just want to talk when there's an emergency or a board meeting. And that's fine too. I really want to be available for the CEOs whenever they want to communicate with me, however they want to. And so, and everybody's got different styles with that. I really feel like the first few months after the investment are the most important part because we've, we are, you know, we had a relationship pre investment, but it's kind of like we're, we're selling each other, you know, like the company's selling the how great it's going to be and the investors selling how great they're going to be. And then we move in together, we live together. And then it's like, okay, now we really have to earn, earn it. And so we need to earn. I need to earn the trust of the CEO in the first three, six months after we invest. That means like if they need help with something, I got to do it. If they ask for something, I got to do it. Because if I can build that, that trust, then if I have to give hard feedback a year from now, two or three years from now, they know I'm someone who delivers. I really care about them. I care about them personally, I care about the business. And I'm giving them negative feedback or difficult feedback out of love, out of caring. If I start out in the first board meeting just saying, everything's wrong, here's.

All the things you gotta change.

I've destroyed all the trust I've built. They're not gonna listen to me then or ever in the future.

You know, I, I was at an event, CEO event with a bunch of VCs recently and, and I was talking to a new partner at a well known VC firm and he said, I was telling him that in my experience advising companies recently, I see things when I dig in with the companies that are scary in some cases. And the board member never told me that thing when I was talking to them and maybe didn't know it or they did and they didn't say anything. And I always ask the CEO like no one ever said this to you? And they said no. And I asked this investor, we were just talking and having lunch and I Said, do you give that kind of feedback? He said, honestly, I'm scared to give that feedback because I feel like I'm not going to be seen as founder friendly. And if it's a company, that's crushing it and they're going to go, and, and I've never run a company. He said, and if there's a company, they're going to, when it comes to the next round, are they going to come to me or they're going to feel like I'm a pain in their ass or whatever. And what you just said, though, I didn't actually know how to, because I told them, I think it's your job to, to tell them if you're seeing these things. But actually what you just said is a good twist to that, which is to build the trust first to say, hey, I'm, I'm going to hustle for you. I'm going to help you with whatever I can do. I care about this company. And then when you do give that feedback, the qu. It's not a question of are they just, they're just trying to make my life difficult. They're, they're actually doing it because they see the value that you're, you brought and they, they, they, like you said, they trust you.

Yeah. I'm also like, I, I've, I, I actually like it too. If you frame it as, look, you know, David, it's your, as a CEO, it's your decision. So I, I, you know, I can give you my perspective, but I'm going to support you whatever decision you make. And, and I, I had another board member that I really liked that did this. He'd often say, like, hey, I'm, I'm kind of like 70, 30 on this. Like 70% actually think we shouldn't do it. But I see, I see the 30% that you're saying we should do this. You know, I, here's where I'm coming out, you know, so that we're not really arguing, like, I'm on this end and you're on this end. It's more like, I see, I see parts of you, but I'm kind of coming to a different conclusion because of this other data. You know, we're a little bit closer together, but ultimately we have to trust our CEOs. I know you brought up Buddy Media at the beginning and my first board meeting with Mike Lazaro. You know, I, I fell in love with Mike and Cass, like, the minute I met them. They're, like, so incredible, and I love their new Book and. But they, in a first board meeting we had, they raised like $25 million from GGV and IVP. And in the first board meeting, Mike comes with this idea to blanket all the airports in the country with Buddy Media ads. And you might remember this like time period. And you know, I never, it was like one of my first boards. I had never had a company do airport advertising and it cost, it was going to cost like 3 or 4 million dollars and we had just raised like 25 million. So there's like 20% of the cash was just poof, you know, like this. And I was asking like, well, do you have metrics on is it going to work? And you know, it's like, no, but I think it's going to work. It's really going to work. And he was just so passionate about it and it was sort of something that, yeah, I could have just said this is a terrible idea, but I kind of knew I wasn't going to talk him out of it. It wasn't something I probably would have done, but that's what makes him special and why he founded it and not me. And I back him and believe in him and who knows if the ROI was actually good on that campaign or not. But they did it and the company had a great outcome and it did elevate their brand in a great way. And it was just something that was where you just kind of had to say, look, I'm going to trust you on this one. And he knew I had reservations, but he also knew that I'd support him and I did.

I love that story. I know that story well. I love that story. I, I remember those ads and I remember seeing him and Cass speak on a panel and they said that those ads stayed up because it was like 2010.

2010 or 11. Yeah, yeah.

And they said like no one was buying the ad space after them, so they just left their ads up for like, for, for extra months. And they, I, I remember seeing them in the airport and I was like, wow, these guys have a lot of money. You know, like they're buying their buy every airport ad. Know. So that was so, so one of the things, you know, I know when we, we spend time together, you, you've seen a lot of companies that have gone through crazy hyper growth and sustain that and become public companies and continue to grow like crazy right now. And you've done deals where they've had hypergrowth and they've collapsed under their own growth. Actually, you know, in some cases, what is the difference between those two because I think if you looked at the beginning of their curves, they're, they're both very similar and you know, then, then they kind of change. What, what is, what, what's the difference between those two?

Yeah, I, I wish I knew, honestly, like, I wish I could, I wish I could because I, and I think I'm getting better at figuring out which ones are sustainable or not. Or maybe I'm just tricking myself into thinking I'm getting better at that because, because I think that's the big question with a lot of these AI companies now is like, how sustainable will it be? And, and things can change. You know, OpenAI, we invested in a company, Jasper, like before ChatGPT launched that was doing essentially like changing marketing materials and press releases and, and any, any type of blog posts. You know, they could, they could do it with AI and it was revolutionary because ChatGPT wasn't out there and they were built on top of OpenAI's technology and adding another LLMs. This is, you know, this is, you know, five years ago and the company was growing incredibly fast. And then CHAT GPT launches and all of a sudden their biggest partner is kind of a competitor and it's a little bit cheaper and so they've had to move their business in different ways and I'm really proud of how fast they've moved to evolve the business. But, but the hyper growth that was propelling it, you know, can go away. And I invested in hopping during the pandemic and I, you know, I still, to this day, I will still do that same investment. And I don't know if it was because I was like stuck in my house growing a beard for a long time and, but I just, the, the metrics at the time were better than any company we'd ever seen. You know, Hoppin was, customers were literally just trying to, to buy as much as they can. Their sales efficiency was like 50 to 1.

You know, it was just, I mean.

They were just order taking at this point. And we all knew that the pandemic was gonna not last forever. But I think we thought, okay, maybe there's a world and we're doing it right now where more things happen virtually, more events are virtual, more conversations are virtual, and Hoppin can be the leader in doing that. And very quickly when we kind of got out of the pandemic, all of a sudden nobody wanted to do a virtual event for a long time because people missed people in person. And so there are things that change in the market can change very Very quickly. And I think it's hard to know the thing that I would say. And Hoppin actually did a good job of this. But not every company does. I would say when the sun is shining, make hay. When the sun is shining. When the sun is shining on your business, that's a great time to recruit super strong executives and think about act two, act three in your business. So what some companies get wrong is they're growing so fast, they're just holding on. Hey, this is the team that brought us here. Let's just, you know, stick with that and try to figure things out. And then things go badly and they haven't hired a better executive team and other people in functional areas and thought about their next act and new product and all those things, and then they're just stuck. And now they can't hire anyone. Good. Because the business isn't very good. But when the business is good, it's a great time to like hire great executives, maybe make acquisitions to get you into adjacent spaces, think about future product lines and, and the best companies do that and, and you know, I think it's your best prevention against like if the market changes, your competitor changes, at least you're, you're doing everything you can to set yourself up for a positive situation in the end.

I think, I think I have met some of these founders that are, you know, these AI companies grow literally. I've never, you know, no one's ever seen this growth before. And I would put them like half and half some in the camp of they think they're invincible and they talk about their revenue growth as if it's, there will never be anything that will disrupt ye. And then the other ones who are, you know, paranoid already and to your point, thinking about they're raising the money but in quickly investing in hack too. And actually now that you say you can kind of see that difference in the mindset, literally some people do a million new revenue a day, you know, whatever the number is, and they think that that's just going to continue forever and then until it doesn't. And when it doesn't, you know, they, they're caught off guard and they've spent all their money on something else. It's really, I can see, especially in today's world, I feel like stuff is changing. I talked to someone who went to one of these coding company, coding assistant companies and they said literally, like one day they released something and the next day OpenAI released something and then the next day cursor and then the next day they shut down the thing that they released two days earlier and then built on a new thing. Two days, like every day is this kind of like you don't even know what's going to happen tomorrow. You know, I'm curious, you know, what do you think about this? Like, what in this world that we're in today, is it the most exciting time ever to be in tech company and venture? Like, is this, or is this another one, like 2021 and you know, whatever the year was before, like, what do you think?

Yeah, I, I don't know. I mean, I think like if I knew I'd, I'd, I bet all the money on it or whatever. Right? Or, you know, one way or the other. But I, it's, I think it's really exciting time. It's also a really difficult time, you know, Like I, I'm close with a lot of the other investors here at IVP and like we've made some, I think, amazing AI investments and passed on some ones too. There are some incredible companies with amazing growth and it's difficult, it's stressful to try to figure out like which are the ones that are, are durable and which ones are not going to be durable and who are the founders we want to back and what's going to happen in the market landscape and competitive landscape. It's stressful and the valuations are high. So you're not, you're not, you don't have a lot of downside protection where you say, hey, at least we're in this at a low valuation and we'll probably have a good outcome. No, you're, you're, you're needing these things to be behemoth type companies and fortunately like looks like on paper and also with some of the revenues of some of the big players, like there, there are, there is this kind of shift going on, but it's incredibly exciting. I wish I was younger. I say that a lot. But like it would, this would be a fun time to be like if I, most of my, my best memories and venture were when I was in my late 20s and early 30s and just like chasing companies and so excited about what's next. Like if I could be at that phase of life with this AI boom, I think it'd be really stressful. I think it is for those people who are chasing those things really hard. But I think it'd be so fun and you can be like the expert. That's what's so amazing is like, you know, I could be the social media expert at, you know, 26 or 28, because like, it was such a new space. Like, you know, I, I, I sort of, I graduated college in 2001, like before Facebook, you know, like, you know, and it was like I kind of was working as all these things were coming out. That was so fun to be like the expert and be in my 20s. I think you can, you can, you can do that now. Like I'm reading articles about, you know, you know, 19 year olds start, you know, doing these huge companies and even like funds that are trying to back people out of high school, like to do AI stuff. So there, I mean, there's like, I think it's such a fun time and you can be an expert in. So I, I, I would love that. But do I know what's going to happen? I don't know.

Well, you, you, you've done, you've also started to do, you've done some angel investing as well. What is the difference between angel investing and being, you know, investing out of a venture fund?

Yeah, so I, last year I became a venture partner at ivp. I've been, the funny thing about me is I've been every role on the investment team that there is. Like I started off as an associate in the early 2000s, and then I was a vice president right around, you know, when I joined ivp. And then I, you know, principal and partner and general partner and, and now venture partner. So I'm still involved in a lot of boards. I'm still helping on some different investments that IVP is doing, but it also gives me time and flexibility to do some stuff on my own. And, and through my teaching, I've actually met a few companies and also kept in touch with some entrepreneurs that I'd backed before. And I've done a few different angel investments and it's not a ton of money. I'm not, you know, this isn't going to be my main thing, but not a ton of investments. But I really liked it. I really liked, number one, I don't have to be a board member, which I love being a board member. But like, there's a lot of pressure and responsibility that comes with that. I actually like having a different relationship with the CEO, which is a little bit more like his or her kind of friend or advisor. You know, I feel like sometimes the companies I invest in through ivp, they're, they're cautious to tell me like their biggest worries or what really is keeping them up at night or what they're really afraid of or, or their insecurities. If I'M an angel investor. You know, they share it. I mean, they know that I'm in for so little. It doesn't matter if I don't come into the next round. They're just trying to, like, ask for honest advice. And so I really liked this role where like, you know, and, and, and I told them, like, hey, call me as much as you want or not. Like, I'm just, I'm, I'm like the angel, you know, like, you call, you know, when you want it, you know, snap your finger, but don't Donna, I don't expect anything of you. It also feels good that, like, I'm investing off my own, you know, for myself. And so I don't feel the same pressure of, like, I need this thing to generate, you know, 10x returns for my LPs so that we can raise the next fund. And like, I, I mean, I, that pressure was good. That was very motivating for me. But it's, it's more relaxing to be like, I just love, you know, I, I invested in this company called Tax GPT and I just love cash at Tax GPT. I think he's a good person and, and is, it's a husband, wife team is. They're like a great, a great team together. I just like them as a couple and their idea and they're kind of using, they're kind of trying to revolutionize tax advice and, and help the companies that file taxes on behalf of businesses and individuals to be more efficient with, with AI. And they're growing amazingly well. And I just, I hope they do really well, but if they don't and it doesn't work out, that's okay too. So I just like them and I want them to do well. I think they will, but it's a different type of feeling and a relationship than, than as a institutional investor.

Yes. I found. I've never been institutional investor, so I don't know, but it must feel very different because it, there's no show because, like, they don't have to put on a show for you and you don't need. I'm not sure, like, we talk. I'm not sure that every interaction with a board member, an institutional investor, is a show, but there is an element of that. And, and in this case, you, like you said, you know, that they're, you're in the same boat as them. You're kind of, you know, I, I like that. So you, you have now started teaching and if one place wasn't enough at two different schools, so what what are you teaching? Why did you start doing this?

So I, I grew up. I grew up in a college town in Eugene, Oregon, where the University of Oregon is. And I was surrounded a lot. My parents weren't teachers, as I mentioned, but a lot of my friends, parents were professors at the university. And, and I just thought it was a great job. Like, you get to think a lot, you get to interact with young students, you get to kind of push the world's knowledge in a positive way. You're creative and you get your summers off. I thought that was the coolest part. So my friends with like parents who were teachers, they would go really fun places in the summer because they weren't working. And so I was like, wow, that I always wanted that job. And I thought about before I went to business school, I thought about actually like an economics PhD and so I was pretty serious about it and ultimately didn't love like how much research and statistics and all the stuff that, you know, the kind of econ professors have to do. And so I went into venture capital and. But I never thought I would be in venture capital my whole career. I always imagined I would do something different, maybe on the entrepreneur side, maybe, you know, something related to venture. And teaching was always in the back of my mind. And so as I sort of became, I don't know, in my mid-40s, I'm 46 right now, I was thinking about, this is a good time to think about something new in my life. And so I started volunteering in classrooms. And I went into some high school classrooms, into some college ones, some business school ones, and I tried to figure out what I liked the most. And I met a great teacher at Berkeley, Sean Foote, who teaches their venture capital class. And we really hit it off and he asked me to keep coming to classes. And I came to like six or seven. And then this is three years ago. And the next year he's like, hey, do you want to co teach this class with me? Oh, sure, I'll teach. Co teach venture capital. And so we've done that together the last few years and we have a great partnership together. I'm going to start at Stanford doing their venture capital class with Peter Wendell and Eric Schmidt and Scott Cooper from Andreessen Horowitz. And then I'm teaching an ethics class at Stanford that starts next week, next Monday. And I've always loved ethics and philosophy and very different than venture capital, but, you know, business ethics. So kind of I'm trying to share some of those stories and then I just Found out I'm going to teach an undergrad class at Berkeley in the spring called Startup Relationships. So I've got, I'm going to have four classes over this school year and, and I've got a little capacity for maybe like potentially Stanford in the spring, so we'll see if there's a fifth. And then I also teach pickleball at a high school once a week because, so, so I'm doing a lot of teaching, but I'm really loving it and I meet a lot of students. I get to be very creative and it's something I hope I can do for a long, long time.

And when you're teaching these students how much venture, I feel like even in my career, especially the same length as yours, like, has changed so much. I mean, on so many levels, it's changed so much. When you're teaching these students, how do you kind of, do you tell them that whole evolution of kind of your career and venture and where, where it's going and, and where, where do you think it's going? You know, like, because you've, I've seen it from the, you know, from the other side of the table, but I can definitely see that it's changed dramatically. You know, what, what do you think of that? And is that part of the class? For sure.

I mean, we bring in, I mean, my favorite part of teaching is I get to have guest speakers. And so I hope, I hope one day you come in too.

I'd love to do that. I would love to do that.

And the guest speakers are super current. And so we're not, you know, like I'm, I'm, I hope I'm not becoming a venture capital dinosaur, but like we're bringing in venture capitalists that are like, you know, doing seed investments over the last six months and what are they seeing in the market or later stage investments or health care investments. And we're, we're, we're getting that real time data and connecting that with the students. And then also in both Stanford and Berkeley, the students are, are paired up in groups with venture capital mentors and they're able to get kind of the interview the mentor and get advice about, you know, and feedback about their different ideas or about thoughts on the venture market. And we're hoping that also allows for a future relationship and current data about what's happening. But ventures changed a lot. The money has gotten bigger, the speed of investing has changed, the data in venture has changed. But ultimately I also think a lot of things have stayed the same. It's still very much a relationship business. And so being able to connect with the CEO is incredibly important. Being able to work effectively with him or her is important. And so we're trying to also, like, figure out what are the lessons. Just like I learned from people who did venture, you know, 30 years before me, I want to try to make sure, like, what are the things that can be passed on generation to generation? And hopefully we're doing that in our classes.

I think the thing you said earlier that is sticking with me and as it relates to this is I do think that the trust is such a big. The Trust with your LPs, the trust with your founders, the trust with your partners, like that, that no matter what technology, no matter how much money, no matter how much that really is. Actually, if I think about the best venture capitalists that I've spent time with, they're the people that everyone trusts. All those different constituents. Trust for whatever the different reasons are. But I think to get to a place where you get to where you get the deal flow that you get from all the best companies and all the best founders, and the founders you turn down, we still come back to you. It all comes. I, I think it really does. Like, at the core, there's a lot of other things, but at the core, that's probably really what it all comes down to.

Yeah, I love that I'm going to steal that and talk about that in our class. No, because I. And trust is a hard thing because when, you know, like, you, you.

It'S.

Become a word that's like, almost become like a marketing word, and then it loses its value, you know, like, you know, like. And even if you tell someone, you know, trust me, you actually don't trust them when they say that, you know, like, so, you know, if I say, trust me, I'm gonna hit my numbers, you know, or trust me off, you know, you're like, maybe I won't. So the word itself, but I think the concept, I mean, the, the, the idea of it is so important. And how do you actually build true trust? You, you do what you say, right? If you say something and then you do it, that builds trust. You do things even when they're potentially against your economic interests, right? Like, that builds trust. You do something truly kind and caring for another person. So I, There are these things that I think build trust without even having to use the word. But I think that. I think you're right. That concept is so, so important. And it's something that, like, I think if there isn't Trust. I don't think a relationship can happen.

Yeah, yeah, anywhere. But I think adventure, you know, with all the AI and it still comes down to the human beings and the trust. And I really, I, I think about all of those examples you just said. You know, the one stuff is tough and maybe against the investors kind of financial interest, but to support the company, they do something, you know, and, and I had one investor who, when I had my first child, I didn't even know how they knew that I had my first child. They sent the child a gift, like a rocking chair kind of thing, and like with their name on it. And it just showed up at our apartment. It was like, and I remember that forever because they didn't have, they definitely didn't have to do that, you know, and just the thoughtfulness of that and, you know, anyway, so, yeah, I think I would love, I would love to come to one of those class. I could tell the story from the other side, you know, of working with the investors. So, one couple of last questions. What is the deal that you regret passing on the most?

Why do people always ask this question? It just is like stabbing needles in my eye every, every podcast. So I, I'll, I'll do the ones I always do. The two that I regret the most are Uber, because we had a chance to invest in the $300 million valuation round. And I, I, I'm really frustrated on myself because the heart in me and my gut in me said to do it. And my kind of IVP financial brain told me that I didn't like that they were subsidizing it. They were only in three cities and it was only uber black then, and they were subsidizing the drivers. And so like, the unit economics were all messed up. They, they paid a $30 for every $1 in revenue they got, you know, and, you know, I knew from accounting class that doesn't work, you know, at scale. So, so, you know, I, I kind of talked myself out of it, but in the, it was almost like I didn't learn the lesson from Twitter, which was like the slide with the question mark. You know, it's like, we'll, we'll figure it out. Like, you know, we'll, if we're really successful doing all these rides and even if we have to subsidize a market initially, we'll figure it out at scale. We'll have tons of market power and, you know, that's the most important thing. And I, I just didn't, I think I was a little scared Twitter was zero revenue, but Uber was negative revenue, essentially because it was subsidizing. And so that scared me and I passed. And economically it was a huge thing. And then the one that I just like, the person I really got along with that I. I should have invested in. And I. I've told him, him this a thousand times is Zoom. I really hit it off with Eric from Zoom, the CEO. And I just. I just have always liked. I mean, talk about someone who's so passionate about this problem. I just really liked him. And I had so many. He'd always drink green tea in his office and serve me green tea. And I had so many green teas with Eric. And we just really. I felt I really connected with him, and he's like, he wanted a valuation number, and I was like, 10% off. And my heart again said, like, I really want to work with this person. And my head said somehow that 10% was important, blah, blah, blah, and, you know, another 50 or 100x. But more than the financial outcome, like Uber, I regret the financial outcome. Zoom. I really regret not getting to work with Eric personally. And that's really sad thing. Like, I. I really feel like this business is about getting to work with special entrepreneurs, and I was really sad I didn't get to do that with him.

Jules, thank you so much for doing this with me. This is literally one of my favorite episodes. Like, I never say that this really was. I feel like full circle, you know, from. From all the conversations we had years ago. So thank you very much for doing this.

Oh, this has been great. And I'm super excited to do this and connect with you. And I'm JulesVP. I've got. Actually, I've got four email addresses, but I won't give all four. But JulesVP is the best one to reach me at, and if I can be helpful to people out there, I want to do that.

Thank you. Thank you. For those of you listening, I'm sure you enjoyed this. If you did, please share this out with your networks and we'll see you for the next episode of Not Another CEO Podcast. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week.