Scaling a Successful SaaS Sales Team w/ 20VC Founder Harry Stebbings and SaaStr Founder Jason Lemkin

Jason, this is such a joy to do, my friend. It's been such a long time. I'm so excited to have you here, but thank you so much for joining me.

Harry, thanks for getting us back together. I'm very excited.

Listen, it'll be a great one, but I do want to start with a little bit on you. I love to set some context. A lot of people know the SaaS brand, but how did you make your entry into the world of venture and come to found Saastr? Let's start there.

Yeah, I mean, it's a long time ago now, but literally 10 years ago of my cohort of SaaS founders, the Aaron Levys, the David Sacks, the others, I was the first one to have a half-decent exit. And so when SaaS was harder, when cloud was much harder today, when there were one unicorn called Salesforce, I was the first one that didn't have to pretend, that had— that didn't have to always claim every day was great. And I just started blogging my mistakes. And that blog took off. And then one of the VCs that had invested in me, Storm Ventures, brought me in as a partner. I'd never done any investments before, but I just invested in some of the founders that were fans of the SaaS blog, and it worked out okay. Like, you know, the first 4 investments eventually became unicorns, 5 out of the first 6. And so it kind of took off organically, but I certainly didn't intend to invest out of that or build a huge community. It was just to share my, my learnings and mistakes when I had nothing to hide.

Can I ask, when you look at those 5 out of the first 6, I mean, I know the companies that— it is an incredible cohort of companies. When you look back at that, are there some lessons that you have from those early investments that you take with you today and impact how you think about investing today?

I would say 2 things. One, certainly, especially in the last 20 months, the world has changed, right? There are just so— but the funny thing was, back even 5 or 6 years ago in SaaS and cloud, Like you could meet with every good SaaS founder. I remember, I remember waking up when I read that Moon had invested in Slack back in the day. I'm like, I didn't see that deal. Now, like all the 90% of the unicorns, I never heard of them, right? The universe is so big. So that's changed. The sheer scale of the cloud obviously is 100x what it was 5 years ago, 1000x what it was 10 years ago, which is difficult to wrap your brain around. So that's changed, right? You, you, you were saying, you were saying before we went on some great deals you missed. You should miss tons of deals today because there's too many good Right? I'll tell you what hasn't changed when I look back over the years is you've got to be crazy to be a founder and build a decacorn. You have to be crazy. It's so hard, right? It is easier today. Let's be clear, it is easier to build a SaaS company today. The tools are there, the systems are there, the markets are larger, right? They're more understood. But the best ones, the decacorns and the unicorns, these founders were insanely committed to building something huge in a way that almost doesn't make rational sense, right? And Harry, you have a little bit of that with the Twenty empire. I see it. That's why I've always known it would be wildly successful. But when you don't see that, my rule is— and I've made this mistake since— don't invest. No matter how much you love the founder. You can love them as humans. They can be doing very well. But if you don't have this crazy 20-year commitment to building something huge, it's hard to make money in venture.

You know, the one thing that I continuously hear from VCs is the markets are 1,000x as big or 100x as big as you mentioned. And so ownership doesn't matter as much anymore.

Yes.

You think about that.

I think it's a great argument on a spreadsheet, right? Certainly owning 2% of a Datadog, 1%. And we look back, we look at all the individual investors in Uber that became deca-millionaires out of, you know, like, wow, I could have done that. I don't know. I'm not smart enough. But when I look over my, you know, 8-year history of investing, it's the ones with the double-digit ownership that move the needle. And for better or worse, when I've had my own fund, when I look at what the port— the companies I'm sitting on today, obviously you regret ones you missed or you didn't. But all of my core positions are double-digit ownership, largest investor in most of them. And that one puts you in a good position if you get a unicorn. Right. Owning 20% of a unicorn still works today. If you give up a decacorn, it was a miss. So I guess it all boils down to— I think there was one rule when I started investing that the folks I worked with thought was— disagreed with vehemently, but it certainly turned out to be true. When you meet a winner, when you meet a winner, you buy all the shares. Now, if you can buy a quarter of the company, you buy a quarter of the company. If you can buy 2% of the company, you buy 2% of the company. But you either buy all of them or none. And I think that's the way you solve through this, right? And if all you could buy was 2% of a decacorn and you get $200 million, that's, that's, that's pretty good. But buying less doesn't help, right?

Would you agree that venture is less collaborative now than ever before? Someone said that to me on the show the other day.

Without question. And without question, it's better for founders. Without question. Every element of venture that is— and I'm being binary when it's of course more subtle than this. But every much of the collaboration in venture did not benefit founders, right? The fact today that the craziest thing to me in venture isn't anything you're saying. The craziest thing to me in venture is there are over 100 founder and operator-led funds of over $50 million. That means if you are connected, if you are connected, okay, and this is, this is for the privileged, okay, which we could talk about. But if you're connected, you might not ever need a VC until Series B. If you can raise $10 million from founder-led fund, operator funds, rolling funds, and that works for you, like you can get it done in a week or two, like why would you deal with a bunch of collaborative VCs that all want to own 15 or 20% of your company when value is not consistent with ownership, right? That's the underlying tension that we've been talking about for years, but we're realizing is we get value out of our cap table, we don't get value consistent with ownership.

Listen, I totally agree.

Yeah. And for me, it's hard. I'm sure it's hard for you, Harry. I get so many inbounds, and they're like, Jason, would you join our round? We have $100K or $200K left. And I can't do it, right? Because they're asking me to recruit their VP of sales, build their team for less than 1% of the company. And if I was angel investing, I might do it, and if I had time on my hands, right? But I can't do it. I don't know. You get so overloaded. But that's a smart thing for a founder to do. That's a smart— and if the founders can get a great operator, great CMO, CRO, ex-founders with time on their hands to all do this, I mean, it's amazing. And I invested in a lot of French startups, Algolia and Franz and Gorgeous and Playdoh. And it's interesting, Olivier from Datadog would invest in all of them back in the day. They all knew him. He was a hub, right? And Datadog went public. He got a little busy. But back in the day, he was so helpful on every cap table. Why wouldn't you want him for 1% versus some fund that complains that the board meetings are inconvenient for his schedule? Why wouldn't you want Olivia on your cap table? Of course you would, right?

I'm totally with you. One final question before we dive into the meat, and it's like bluntly, when we look at funding environment today, I call it the foie grasing of startups, which is like, especially in SaaS, this worries me. Because you give a founder $60 million when they're at $25K MRR or $50K MRR, and suddenly they hire 20 sales reps, 10 in marketing, and they don't have a playbook and they don't have repeatability. Do you see this too? And are you as concerned by it as I am?

I don't. I'm not concerned by it.

Huh.

I believe that with help— and this is why you need good advisors, you need good capital— you know, the best founders eventually hire great VPs. OK, sometimes they screw up a few VP hires. Sometimes, oftentimes they'll fall in love with the logo. They'll want someone from Datadog or Dropbox, whoever. Everyone makes that mistake. Maybe your advisors. Help you avoid it, but the great VPs, the truly great ones, not the good ones, the great VPs know how to spend the money, okay? The mediocre ones fall into a hole. What happens is you hire a mediocre VP of sales, and let's say, oh my God, the CEO promised we're gonna go from $1 million to $10 million this year. That's what I promised when I raised the money. I didn't promise 1 to 2 or 1 to 3. Even 1 to 3 was the old days, was a lot. I'm promising 1 to 10, right? and we're seeing at least 1 to 5, 1 to 6 all the time these days, right? So I do the promise. What does a mediocre VP of sales do if there's $60 million in the bank? They spend it all. They spend it, the mediocre ones, 100% of them spend it all. The marketers spend everything, okay? We see it, Harry, you and I have seen it multiple times, a mediocre CMO will come in, or just a misfit, a mismatch, more often it's a mismatch CMO, and they'll spend everything on advertising and media. But the great ones, you know what, they spend maybe 50% more. The great ones don't hire crummy reps. The great sales leaders, right, they build amazing teams, right? They just might hire a bigger sales enablement team, a bigger rev ops team to support them, right, than you otherwise would. The great marketers don't spend money on programs that don't perform, right? So I think this is true, but I blame the CEOs for, lowering the bar on hiring for VPs. I don't see them blowing through all the money. I never see it. I haven't seen it.

I think you're right, definitely, in terms of the best always hire, you know, the best VPs. I get you. I do want to dive into the meat of the show, though, because, you know, I think, you know, obviously one area where we're both very passionate is sales. And it's where I get the most questions, I think, from founders in particular. Start on the meta, which is like, fundamentally, does the founder need to be the person who creates the first sales playbook, or can that be distributed to a sales rep or a head of sales?

Well, look, I think I would say the majority of B2B companies that are successful that you and I have worked with, Harry, the majority, but not all, the founder has been the first head of sales, right? You know, my first Decacorn, Saastr podcast 001, you did with Tiago from Talkdesk, right? He was the only salesperson through the first $2 million of revenue. That's where I learned, right? On the other hand, sometimes it's just not you, right? Sometimes you cannot be a great sales rep. And when I look at my second investment back in the day, another unicorn, Algolia, Nicholas, who you've interviewed, was okay at this, but he brought in Gaten, like his chief business officer, really as almost a late co-founder. He was probably employee number 1 or 2 because these engineers just weren't great at sales and it became clearly that the search API had a sales element, right? That was the, if you don't have that DNA, find that great almost co-founder-like salesperson early and it can work, right? But hiring that person over Craigslist, right, or over LinkedIn or whatever, that's the one that fails, right? So we all believe in this early founder-led sales and it's true most of the time, but it's not true all the time, but you sure better found a co-founder-like person to pick up the slack.

Okay, if you think about kind of the first sales hires, often founders who say they've built the playbook and they're at a million in ARR, say whatever, some number, they go, should I hire a head of sales who brings in the team around them and crafts that team? Or should I bring in 2 sales reps and build it from the ground up? How do you advise founders in that situation?

Well, again, we have, we've learned over time there's the scenario that works 80% of the time, but you don't have to run that playbook, right? What works 80% of the time is 80% of the great cloud SaaS CEOs we've worked with they hire 2 quirky sales reps and get them doing pretty well, hitting quota or beyond. Often one of them just crazy good, right? And we can talk about what that persona looks like, right? And when you've hired 2, you're generally ready to hire a VP to hire 3 through 300. You have just enough of an engine, just enough of a playbook, just as importantly, a playbook that works that you can start reproducing that playbook from 3 to 300. If you don't have those 2 AEs and you hire a VP of Sales, 80% of the time it doesn't work because there's nothing for them to work with, right? And the good ones, and importantly today, a good VP of Sales usually won't join a startup at that phase. That's one thing that's changed the last 5 years we could chat about, is the great VP of Sales are waiting for $10 million. The ones that used to join at $1 million, they're all waiting for a $10 million ARR startup today, or a unicorn, whichever comes earlier, all of them. Um, so, but, uh, but if you possibly can get 2 performing reps yourself, it's going to make that whole process 10 times easier.

I want to talk about those 2 reps. You mentioned that. What do we want in those 2 reps? What do they look like? What are the character types? What makes you go, this is a 10x rep and we want you in our team?

Well, let's be clear, the 10x reps in the early days are not the 10x reps later. Hopefully they stay forever. The best ones stay. If you're lucky, keep them, right? But they're different. But I will tell you how to hire them and what they look like, 'cause they're two different things, okay? The 10x sales rep in the early days has 1.5 criteria. It's really this simple, okay? First, make sure they've sold at your price point, at your ACV. If you're a $5K ACV startup, do not hire someone from a million dollar a year group, no matter how much you love them. It's the wrong toolkit, right? The toolkit is roughly the same for every startup at a given ACV, at a given price point. So make sure they've sold in cloud, in SaaS, at your price point, okay? Otherwise, don't fall in love with them. Two, and most folks screw that up. The second one, all the founders screw this up. Harry, would you buy from her? They listen to the buzzwords, and they listen to the talk, and they do the reference check, but if, Harry, if you've sold the first 100 copies of your product, if you've sold the first 200 sponsorships at $20, you know whether you can trust these precious leads to somebody else. And whenever I talk with a founder and I'm like, how did it go? Well, my first 2 reps didn't work out. I'm like, ah, what happened? And I always ask them one question, what would you have bought from them? Would you buy? The answer is always no. So you can give on a lot. You can give on the fact that they were never great, that they were always mid-pack. You can give on the fact that they sold at a 6-tier competitor. You can give on the fact that they never got to $20 million in their whole lives. You can give on a lot of things. ACV is tough to give on, and the fact that you would buy from never works. Okay, that's— and then so that's the criteria. Okay. And then I'll tell you, and if they just pass those two criteria, they will work. Okay. They will work for you. They— and they can stay for a decade. Now I'll tell you what makes them 10x. What makes them 10x, and it took me a long time to figure this out, is that they can change their playbook. 90% of sales reps— and this works out the bigger you get— they sell exactly the same way. Okay, Harry, hi, this is Jason from Twenty Media. We have a podcast sponsorship. We start at $100,000 a month. Where can I send the PO? Right now, when Twenty gets really big, that actually will work 8 times out of 10. But think about the early days. I mean, it wouldn't work. And this— and 90% of— actually, 90% of sales reps, no matter how— they just run the same playbook again and again and again. And the bigger your brand gets, the more that works. But the great ones, especially in the early days, they change the playbook based on who the prospect is. And that may sound obvious, 'cause as founders we do this intuitively, but it's not how many great reps are trained. They're trained in a process and a system. They get really good at the 10 questions and the script. So those early reps can be great just if they're at your ACV and you would trust your lead. That's enough. Hire her. But if they actually can sell 3 or 4 different use cases, they understand the different buying personas already, That's when the magic, the magic just happens and you get the 10xer. And that's the criteria of every top rep at any SaaS company I've talked to, is they can completely change the sales playbook based on the prospect, based on the buyer.

Can I ask one thing I find very, very challenging? It's like quota creation. It's like, how do you advise on the right quota that is both ambitious and it's hard to get, but also it's not too ambitious where it's just too far out of reach? What's the right balance?

Well, let's— the good news is the middle's hard, but the beginning of this process and the end are easy. Okay, when you're really early stage, your quota should be enough that the sales rep won't quit, that they can eat. So you need to make sure that at least the first 3 to 6 months, if you're sub-$1 million to $2 million in ARR, that they get a boost. Okay. And often, often it's simplest to almost give them— I know it sounds— can sound crazy. Sometimes it's almost easy to give them 100% of what they close. If it's hard, right? You close $10K this month, you take home $10K. Like, it's really simple, right? Obviously, that's not profitable, but it's almost 100%. Like, they take home 100%. That can be okay for the first 3 months. You have to train people, you have to onboard them. It's not the end of the world. It doesn't work at scale, right? But you need to back into it. Okay, here I've hired this new, this new rep, Harry. He's got to make $100K a year. Let me be honest with myself. If he can close $200K, it's so early, that's a gift, right? So I'm going to pay Harry half of what he closes. That turns out to be— if you don't, you have to be analytical. They have to eat. And then at scale, we end up with these 3x, 4x, 5x numbers, right? Which is quotas are an SMB usually 3x your full, your fully burdened comp, your on-target earnings, your OT, up to 5x in the enterprise. So that's the way it works. 3x, 4x, 5x. It's actually worked since in the early, like it's always been 3 to 5x of profits going back to automobile sales, anything you could sell, right? Pool supplies. It's just because software approaches 100% gross margin, sales reps could keep 3 to 5x, this 3 to 5x work for revenue, right? Not the profit, but that's the way it works. So at scale, if you wanna make $200,000 a year as a sales rep, great. In SMB, you gotta bring in $600,000. Mid-market, $800,000. Enterprise, $1 million. And then the question is in the middle, in the middle, as you— especially if you have capital or if you don't, where do you want to bend those rules until you're at scale? Right. But ultimately, at some point as you approach IPO or something, your metrics have to be normal, don't they? Absolutely. They do.

My question is also like when you look at enterprise, given the conversion length in terms of the sales cycles. Yes. It's very difficult to know if your reps are actually good.

How do you think it's very stressful?

How do founders know?

Very stressful.

What are signs that when you have a founder that goes, Jason, they haven't closed anything, but they've only been here 4 months. How do you know if they're good?

Yeah, there's a startup I invested in. It's taken a while. They were founded in 2017 and the beginning of this quarter they were at $2 million. Okay. Since 2017, this quarter they finally closed $1 million. So $2 to $3 million in one quarter. Not a single enterprise rep has ever worked out. You keep waiting and waiting and waiting. When you're at scale, you know, because long sales cycles don't matter at scale. North of $20, $30 million in revenue, you're lining up so many deals at the same time that long sales cycles don't matter. Because if you have 100 deals in flight, it actually starts to happen very predictably, right? But you need like 100 long sales cycle deals, not, not, not, Sony baloney pipeline, but actually in flight that are going to close before this gets distressed. And how many startup founders have 100 enterprise deals in flight? It takes a while, right? So there's really only two answers, and it's stressful. There's no great answer. One is I found that in true enterprise, like real enterprise, the founder is often the VP of sales until $10 million. I've seen this again and again and again. Now I'm not saying they don't have a VP of sales, okay? But I think in SMB you can be hands-off at a million $1 million or $2 million in revenue, even if you did founder-led sales, I find that enterprise, they're so good at speaking to the big customers. They're so trusted, right? Those Harry we know, like we trust him. All the customers trust him. Google trusts him. Whoever trusts him. And so Harry is already in every deal until this brand is so established that Harry just gets pulled into the deal. So I actually think to tell founders that are pulling their hair out in enterprise, keep pulling it out. Because it's not going to get better. It's just going to get more repeatable and you will be the head of sales until $10 million. And so what that means is the big mistake that I see founders that are true enterprise make is they just have too much faith in these AEs. You have to see more progress. You have, you have to judge it. And even if you have a 9-month sales cycle, you have to say 4 months in, are these deals really moving at the pace they did when I run them? Are they really working as well? Because otherwise it's fake, right? It's not— it's not— it's fake energy, isn't it?

It totally is. The thing I worry about is like founder dependency. And I think about this with me now dealing with sponsorship management. It's like, how do I extricate myself from the process? Because you don't want to be in every process where it's founder dependent.

Like, what would happen to SpaceX if Elon Musk was gone? Or Tesla? Founder dependency is part of the game. Yeah, I mean, it's part of— it's part of the game, right? Uh, I think it's a— it's one of these existential risks for investing too, right? What if something happens, right? Uh, I got an email over the weekend from a great— literally one of the best founders I've known my entire life, saying, you know, his co-founder is kind of transitioning to an IC role, right? I'm like, God, that's high risk. That's the high— that's higher risk than losing a customer or some sort of other existential issue, right? Because founder dependency is an existential problem. And you got, you know, making yourself obsolete is the dream of every founder. But maybe you could only come close. And it's true in sales. And when I started doing these SaaStr events, I would interview all the CEOs. In the early days, I would ask the Jeff Lawsons from Twilio and the Peter Gassners from Veevan, I would say, How much time do you spend in sales? Like in the early days, before they all, they were all bigger, and they're like, more than ever. More? I'm like, really, Jeff? You just went public at Twilio in 2017, you're spending, you're a developer-focused company, you're spending more time in sales than ever? Yes. Now sometimes that means more time with customers, it's not always prospects, right? As you get bigger, you talk about 10-year customers, you want to move your time as CEO more to customers than prospects, but It never goes down. And that, that I think that's emblematic of this level of founder dependency, right?

Speaking of the founder dependency, have you ever had it where the founder's just tired? We've seen COVID, we've seen the world change and shift in ways that we never expected. And I think depression, mental health, tiredness, chronic tiredness is more and more a problem. Have you ever had it where the founder's burnt out? And how do you deal with that? Because that worries me.

I would say only 80% of the time. What I mean is one of the very first things I wrote in SaaStr, literally probably in 2012 or 2013, a long time ago, was I've been doing this for 5 years. My startup's doing pretty well. I want to quit. I'm tired. What do I do? And I've updated version of that over the years. Literally last week I had the conversation with a great founder that almost wanted to throw in the towel. And even though they had over $1 million in revenue, it just taken a while, right? And mental health and everything, these are important issues. I wish I had any answers there. I'll tell you what I've learned more tactically about this topic, which is one, every company, every startup, every SaaS company, SaaS is good in that you don't have to change the product like every week, okay? You're not, it's not Clubhouse or TikTok. The competition level is, It's visceral, but it's slower. But you do need to reinvent yourself every 4 to 5 years, right, as a product. And the only way you can do that is if you kind of reinvent the team and your mission every— not your mission, but your strategy every 4 to 5 years. And what bails you out of tiredness again and again, if you get bailed out, if you do, is that magical VP that you find that is more than a VP, that is almost like a founder. Almost like a founder, right? And that is the only thing that has saved me over time. And that is the only thing that has saved me even running Saastr is finding someone that would join and own more of it, take over some of that burden. And if you're a founder and you're burnt out and you're up to here, right? But you find someone to take over a piece of it, all of a sudden everything's down here. It's just your stress level and everything drops 34. It's not to nothing, And then you'll realize I should have almost dropped everything to find her, right? To find this VP that could carry some of the load, right? And again, when that founder sent me the email over the weekend, the first thing I'm going to talk to him about is, okay, who can we find on the team or outside that can carry some of the load, right? Because the startup's doing great, but you need someone that's going to put some of those concrete blocks on their back and own some of this, right? And back in the old days at EchoSign, Adobe Sign, I had 3 of those. And I didn't appreciate how great it was. I didn't appreciate— I thought I needed that out of every VP, right? And I only had it out of 3 of my VPs. And then I realized I was at an event and I was backstage with Wade from Zapier and we were talking about it and he's like, you're lucky if you have half. I said, what do you mean? He's like, you're lucky if half your VPs not only do their job well, right, but do more than their job, like carry some of that load. And if you can even have half of your management team do it, that, that's like magic. And I realize he's right. Right? And so that's what— if you're tired, that's what you're missing. You don't have someone to carry the load for you. And, and people, great people will do that, right? And that's what's crazy about startups, is people get these emotional attachments to them, and they will, they will do things they would never do in a big company.

Does that mean if they don't carry the load for you, they're not maybe great, they could be good? Does that mean you don't have them in your organization? Like, you can only—

no, I think Wade's point was, look, I'm like, we didn't talk about any— so Percy's like, I'm lucky to have a VP of marketing that hits plan. That's enough. Okay. If you get me the— whatever the goal is, like, that's— you're going to have VPs on your team that are going to hit their numbers. And that, that's, that's hard enough as it is, right? A lot of human beings, especially as you get bigger, right? And it becomes more process-oriented. They don't want to worry about the competition and where the company will be in 10 years and the deep future. They don't, they don't, and that's, that's okay, that, that's okay. Um, but, but having even half your management team care 80% as much as you do, that's when you can just blow it out of the water, right? That's when magic happens, right? And so I think it gets harder as you scale, as these, as you hire process-oriented people, but you can find them, but you need them. But if you can find a couple of these before even $20 million in ARR, the romantics exist, they're romantics, They're romantics. They're romantics that want more out of life than a salary or even RSUs or equity in a big company. They want more. They want a sense of belonging, a sense of worth out of their company. And you can mock that, but it's incredibly powerful when they get so much value out of creating themselves, out of being a creator, out of the magic of a startup. And if you can harness that authentically, that's when magic happens. That's the beauty. I mean, I don't know why. I mean, You've had an interesting career, Harry, but I, you know, when I quit my first so-called corporate job to do startups, I actually had no job, no salary, no savings or anything, but it was wanting to be part of something bigger, right, than me that I did it. And I don't think that's changed. That's why people join early stage stuff, right? 'Cause it's not rational, is it?

No, not rational in many cases. I was just unemployable, Jason M. Lemkin.

Well, you're unemployable. But you're a romantic, and that's what I, when I say this to people, they don't understand what I mean, but I mean, These— some of these great early stage, and I mean early stage, almost up to $20 million these days, they're romantics. They want more out of life. They want to be on this special journey, right? And tap the right person that desire— if you're giving them that special journey and they want to be on a special journey and they're great, then they're super great, right? Then they're magicians.

Totally. And if anyone listening is a VP running media companies and wants to help me, then please, please.

You get it. I mean, like, $20 million is so big. You get it that you're overwhelmed now, right? And it may take you 2 years to find that person, which sounds horrible, right? But when you find that person, magic will happen.

Speaking of like not getting out, but finding leverage, but I am speaking about getting out now. I was speaking to a SaaS investor the other day, legendary SaaS investor, pricing is so ridiculous today, Harry, for my early bets, just I'm getting out of as many of them as possible, honestly. Like bluntly, I know they're average companies and they're priced at $600 to $1 billion.

Yes.

Sell secondaries. How do you feel about when the right time is to get out? And is this the time now to be selling?

You know, I, I have been thinking about that a bit lately because you do need to think about that, right? The, the, the quality of unicorns is not consistent right now. That this 100x ARR thing, startup has become a meme. It's justified. Behavior that I think in the aggregate will work out right for large investors, but on specific deals can make no sense because 100x ARR completely makes sense for a Datadog or a Snowflake, right? No argument because— but, but basically 100x ARR startup has to at least quintuple next year with high quality revenue, at least quintuple. Right. And a lot of these folks that get these crazy valuations, the next year is not as good. It's okay. It's not that it's terrible or they would never get the valuation right. But it's not— they're not quintupling or sextupling or septupling the next year. And then a set of issues set in that compound. Right. And, you know, you have to understand what's going on. Is this— is this a generational company? Right. Or is this a moment in time? And I think it's— it might be if you're a great VC, that's easy to— an easy bet to make. It might be if you're great, you can— your job is to know the difference, right? And do I have a HubSpot or not? Like, what do I have on my hands?

And I have one the other day and it was a thousand net revenue. Yeah. I mean, it was like a $50K startup MRR and it was done at $610 pre.

Yeah. And it sounds silly, but I think— but whoever led that round, if they're smart, they're doing 30. 30 of them, okay? So then you start to see this bell-shaped distribution, and if they do okay on the long tail of it, right? They're going to need 4 or 5 unicorns, right, of those 30 to make it work. They're probably going to need more than 10%. They're probably going to need 15% to be decacorns. So if you plug that into a Google Sheet, you're going to see that they can write off 3 or 4 at the bottom. A couple can have mediocre outcomes as long as they get at least 15% to be decacorns, right? It's just— and you can argue, you could argue that given all the unicorns, all seed is still underpriced today. I think seed, seed, as crazy as it sounds, might be the only bargain because— or pre-seed, like we have to— pre-seed might be the only bargain because as expensive as it is, as expensive as it is. And I'll tell you the problem with pre-seed next. As expensive as it is, it may not have seen the same inflation as Series A, right? Even though it's seen inflation. Right. But tripling is not the same thing as 20x.

It's not. My question to you is, I don't think that's— we're going to get on to the problems, but I don't think pre-seed actually exists anymore. Bluntly, for the majority— or not for the majority, but for a lot of founders— whereby if you come out of a top Facebook, Twitter, Datadog, Slack, you name it, you can raise 3 to 5 on 20 like that.

But what about the less privileged, Harry? That's what we're— we don't spend enough time talking about. I'm not even talking about less represented or truly underprivileged. That's an even larger issue. I'm just talking about great folks that didn't come out of Facebook, Twitter, Y Combinator, right? I would say most of my best investments did not. And those have not seen the same level of pre-seed inflation, right? But they have seen enough that can break the seed model.

Okay, talk to me. What do you mean, break the seed model?

There has been a classic seed model in the US where for at least a decade, if not longer, of like $40 to $50, $60 million per partner, right? That's been a seed model for a long time. 3 partners, $180 million to $120. When I could be a solo GP, which was seen as insane at the time, $60 million for one. But it basically rolled up into the same math, $40, $50, $60 per partner. You'd invest very early at valuations between $3 and $10 million pre depending on who they were. And you can get enough ownership for 2% of your fund, right, to have diversity. So 2% of a $50 million fund is $1 million. So how many deals can I get 10, 15, 20% of $1 million, right? That model probably doesn't work anymore, right? To do that type of— you say, why is everyone raising a $300 to $400 million seed fund? Well, it's the 2% model. It's not just a game. It's okay, I want to write 2% checks that are 2% of my fund or less, right? So even as seed has become pre-seed, and that's okay, all the names changed, right? You know, Series A became seed. It's all cool. But does the traditional $50, $60 million seed fund work? I think it doesn't work unless you go with anything that has any proof, any social proof, anything privileged. It doesn't work, right? So you either have to find the less privileged, where I think it works, or you have to settle for a very different model, right? A lot of these founder-led funds are okay with de minimis ownership or very high valuations. They think it'll all work out in the end because they have decacorns, right? And that, and that's disrupting seed too, because if you need to own 10% in your seed fund and a founder-led fund is okay with 3% or 2% because they're doing 30 deals a year and they know they're going to have 4 decacorns per fund, that completely breaks the traditional seed fund model too. Right. So I think it's the only part that hasn't adapted. We see these Greylocks and Andreessen and others and Sequoia sort of adapting. But I don't know. I don't know. I don't know that this model exists, at least in the same way as when I started investing. I don't know that it exists.

You said there were problems with pre-seed or it goes bad. What did you mean by that?

When it goes bad? Is that what I— what did I say?

You said about the problems of pre-seed and we'll get into that.

The problems with pre-seed. Oh no, I think all I meant was that I think the media confuses the privileged pre-seed with the less privileged. I don't think we've seen the same levels of inflation for folks that have no social proof, have no background. I don't know.

How do you advise founders when they have big multi-stage funds putting big term sheets on the table at the seed round?

I think that Here's a point. I'll give you the advice and I'll tell you a point that's changed over the last 2 to 3 years. First of all, you don't have to spend it. Just always remember you don't have to spend it, right? I think, but let me go to the point. It used to be just a few years ago that there were a couple of problems with big huge funds doing seed, right? One was of course signaling, oh my God, Excel, Sequoia, whoever, did the seed, but they didn't do the A. Let's be clear, that was a signaling problem. And the big funds would say it wasn't. It was a huge signaling problem. It was a 7 on a scale of 1 to 10. And the only people that said it wasn't was the people running these programs. It's a huge signaling problem. Of course, if Sequoia or Accel or Andreessen or Lightspeed has 2 years of data and they don't preempt the A, of course it's a problem. Of course it's a bad signal. So, so that was a problem. And that exists today. One weird thing though today is the big fund— if you take money from a big fund as an early-stage founder, there's actually less pressure. There's less pressure. This has so changed. The funds are so big and they're raising funds every 12 months, right? We have different portfolios. In my portfolios, when the multi-billion-dollar funds have come in and led the A or the seed. They're barely invested there. And you know what? They don't even care if you have board meetings. They don't even— and here's the thing, Perry, they don't care if you lose all the money because it's just $20 million. They, they don't have time. They've done 40 investments, they're on 20 boards, and just the $20 million is the entry position. And look, listen, they might be a little upset if you, if you don't get to a billion in 24 months, but they don't care anymore. That used to be a career-limiting move. You used to lose your job if that $20 million check didn't perform. Now nobody cares. They don't care.

If you've got $2 billion and you're doing the $20 million, I mean, it's 1%. It's 1%.

And it's $2 billion in a year, Harry, instead of 4 to 5 years. It's in a year. You don't even have time because deploying a fund in a year requires a level of velocity that we've never seen before.

You can't care.

And the good news is, if you woke up this morning and another one of your portfolio got marked up to a unicorn at 1000x or whatever, that's fine. That's the way the game is. And if they're going to lose money on the other one, or if it's just slow, nobody cares. They don't care. And if you're an empathetic founder like I was, and it may not all be a positive, it takes a lot of pressure off you as a founder if your investors don't care. I worried about it too much, right? They literally, they literally don't care.

No, I'm totally with you. I think it's about finding the right balance. You never want founders to be desperately depressed or mentally unstable, but I'm totally with you.

I just think this is, if you're the right type of founder, The fact that there is less investor pressure for large checks can de-stress your life if you play it the right way. If you play it the right way, right. The pressure even to raise it a couple hundred million valuation years ago was so high. Today they may just leave you alone if you're the right founder. That's a gift.

Listen, I agree. You said— you said about deployment pace that you're very disciplined and actually you haven't really changed your deployment pace. Yeah, like it's not down to 9 months or 12 months. Like, how do you think about deployment pace and discipline on, on, on checkwriting? But I—

so look, everyone's different, right? First of all, I've learned, do you do any— are— what has changed, I think I've learned over time, is the burden of being the lead investor over time has gone up as everyone does less work, right? The number 2, the number 3, the number 4 investor does less work. The amount of work the lead investor has gone up. And I was just looking at my portfolio the other day. I added a column. Where am I? Number one investor, because that's where the time is. People used to do it. How many board seats am I on? Which was the amount of work. You know what, Harry, now that we do it over Zoom, a board meeting is not like the end of the world, is it? It's really not a big deal, right? But being number one. And so I think how many active investments can you be be number one in, and it might be 5. Like the traditional, the old school metric for board seats was it was supposed to be 10. Okay. But when you started to run the place, it would be 20.

Okay.

If you go back and talk, when you do the 20 VC talks, they would be on the Arthur Rocks, whatever. They'd probably be on 20 boards. Okay. I bet Byron Bieder is my favorite. I bet he's on 20 boards. Okay. But that would be this capacity for going to boards, right? But being the only active investor, it might be 5 if you take it seriously. So you have to wait if you want to be a seed investor and have high ownership. That's, that's the compounding effect, right? And I haven't found, at least with my— what, what I'm asked to do by founders, what I'm asked to do, which is help build the teams, I haven't found I could do more than a few of those at the same time.

Yeah, no, I agree.

That's the problem. And I don't think that's a wise way to invest. The better way is to not help at all. The truth is most top VCs will tell you that historically, historically, that they don't— the best startups don't need any help. Right. And they'll say that meme again and again. And if you think through it, that really means you should do the least you can other than win the deal. You should win the deal and exit any time commitment.

This is why I'm funny. I'm so bullish on my model, which is like I am very light touch. You need an intro to the CTO at Zoom. Done. The head of sales at Slack. Done.

You need that. Smart.

But that's super— it's so lightweight. Jason M. Lemkin, meet Tom. Sarah meet Rachel. Yes.

Oh, well, as you have more money, Harry, and as you become in some cases the only investor in a company, right? You've already raised $180 million in your last two funds, right? Let's imagine you raise $360 in the next one. You may end up being the only investor in a number of your investments, right? Or the only significant investment, right? Because as these cap tables are getting sliced finer and finer, you could have one person owning 20, right? Probably my single best investment today, I own a little more than 20, and I don't think— then I have one that owns 8, and then everyone else owns a tiny bit. So I'm— and I love this company, but I'm on the hook forever, aren't I? And so it's great to just make those— and listen, you have such an incredible network. If you can just make connections, that's worth it to have Harry on my cap table. Like, anyone listening to this, put Harry on your cap table. But if we're doing insider baseball, as you will, you'll be able to sustain that as you have more ones and ones and ones as an investor. And those ones get so big that two is— two is just doing emails.

I'm totally with you. I think it's a really—

I don't know.

I think honestly it lends to the type of deal that I do and I rarely do the ones where you're solely the one with the majority. Now, I'm not saying at all that won't happen. Where it does happen, which I have now, Blondie, I am on the hook and I work fucking hard to do.

And then as time goes on and you start to see distributions and other things happen, you start to see the benefits of, of even being the largest investment in one winner, like being the largest investor in one winner can out— unless you're— unless you can just nail that 2% of Datadog strategy. You know, this is Ho Nam's point, right? Which is being the largest investor in a generational company, that's enough in venture, right? And the world is different today. You can run a different, and you're running a different playbook, but that one does, as time goes on and you get busier and busier, the slugging it out and trying to be the largest investor in a decacorn becomes more and more appealing.

Yeah.

Right?

I get you.

It does. I mean, the investment I made in TalkDesk, it's Storm. Storm's, Storm was the largest investor. They're still close. You know, if it's worth $20 or $30 billion, that will be the best investment in 25 years for that fund, right? That more than outweighs all the other stuff. So if you just think about slugging, like, and as time goes on and you get busier and 20 VCs doing $300 million a year and you're managing $4 billion under capital, there is a temptation to slug it out and want to have that number one position on the cap table, isn't there?

Man, I'm sorry. That Storm portfolio you built is just a rock.

Yeah, but I just— but you learn from it, right? And you learn. So yeah, but listen, if you can maintain what you're doing at 20VC, it's epic because it's the next— there's a lot of folks who have kind of done the next generation thing of what Saka did in the early days, right? Saka just had such a large social following, he could move the needle, right? And that alone doesn't work today. That almost seems like most things. It seems, it seems so basic today. But if you can continue to make connections through your network, you're more valuable than 95% of the investors on the cap table for sure.

And off record, I'll tell you why. Why I think we're so much better than that, which is exciting. I do want to ask you, you mentioned board seats and board meetings. I've sat on them, Jason M. Lemkin. I thought they were pretty useless and ineffective, to be quite honest. Do you actually find board meetings help?

I have changed my mind. So when I started investing, I felt there was nothing more torturous than going to a board meeting. Okay. I remember my first investment was PipeDrive. Vista bought them for $1.5 billion, and I had to be tortured to go to those board meetings. I'm like, oh, I'm like, I got you your VP of sales, your CFO, all your other— like, I got to do this again. I thought I sold my company so I didn't have to go to board meetings anymore. I thought I was supposed to get a break from this crap. When you have an exit, And I really thought they were terrible. And none of the first investments that I do, did I appreciate them at all, right? None of them. I viewed them— but time goes on and I've learned a couple of things. First of all, as I transitioned to having more and more number one investor positions on the cap table, I realized that fiduciary There's a fiduciary obligation in the lead investor, and it's very serious in this day and age of Theranos and 1000x deals. Who's responsible for the diligence? Who's responsible? Oh, you raised $20 million in your seed. Great. But who's responsible for that money, that it's used properly? And I don't mean going through the books or anything like that, but who is providing every 6 weeks a check and balance? And that check and balance is that you show up and you report against revenue, you report against cash, and you report against sales and marketing. Right. I actually view this in this age of more and more investors with smaller positions who care less, this fiduciary responsibility when I'm number one is weighty. It's weighty, right? And the ones where I'm number two or number three, I'm like, "Woohoo! I don't have to do this!" So there's fiduciary. Two, and boy for founders this is so important. Until you're big, until you're at $40, $50 million, board meetings really are about money around the table, right? Until that phase, board meetings are at least 50% for your management team to present. There is nothing, few things more valuable to a CEO than having an external forcing function for your VPs to have to hit their numbers. You can only, how often as CEO can you yell at your team? I would argue once a year. Now there are CEOs that yell, there are yellers out there, but I would argue you can really only yell at one of your VPs and I put yell in quotes, whatever this means. I think you can really only be so upset with them once or twice a year, otherwise it's demoralizing and people quit, right? But if every 6 weeks your VP of sales that's a little bit behind has to report, "Harry, my plan for Q1 was $10 million, I'm at $8.4, here's how." That forcing function for you not to have to do it yourself as CEO, and each function layer, sales, marketing, product, engineering, it's like a 9 on the value scale. And that's also, as an aside, that's why I beg founders not to use Notion at board meetings. I beg them to force everyone to make slides, to spend the time, because we all love Notion and Coda. We just put our stuff in our Google Docs and it's so, it's so efficient, isn't it? But, but, and not only did I think board meetings were stupid when I started investing, you know what I thought was even stupider? Founders using slides. I'm like, oh my God, like, why do people are still standing up in rooms? And then clicking through, through, like, I can't believe people are still doing, like, I get what you do. Like, I don't need to see your stupid presentation. But then I, then I realized as time goes on, the work you force your management team to put into those slides for each board meeting forces organization, self-discipline, reporting, goal analytics that otherwise they just don't bother to do in Notion. They don't do it. They just write a stream of consciousness or an update to a table. It's not the same. But if you don't put the work in, you don't get the value out, do you?

No, you don't. You don't. I find the best managers, though, do delegated responsibility where they kind of say, as you said, they bring their functional leads in each area and then they delegate to them. Because one thing that does worry me is when you see the founder and CEO at a scale-up company just spending way too much time doing the decks themselves and you're like, you do need to find some form of delegation that works here. Do you know what I mean?

For sure, for sure. But I think as we've gone into the era where you can use SAFEs up to $200 million and other things, the presentations, the board meetings have atrophied. And I think even if the CEO doesn't get it for their investors, even if they don't really respect any value add from their investors, your VPs take these board meetings very seriously. Here's the other part. You may not as the founder, but your VPs, I gotta present to the board. Oh my God, every VP I've ever worked with gets nervous. That is a gift to you as a founder. Harness that. Harness the fact that they may be comfortable with you as a founder, but they're nervous about presenting to Harry or Jason. It's just Harry or Jason M. Lemkin. Give me a break. Why should you be nervous presenting to us? But the fact that they are is an amazing management tool for a CEO.

Yeah. No, I totally see that.

Right?

I'd be terrified presenting to you, Jason.

Yeah, and that's a gift as a founder because you don't have to yell.

Yeah, no, I agree. I think—

nor does the board member really have to yell. They just have to be like, hmm, that's enough.

We miss Plan A.

Okay, next.

Yeah.

Any questions from the board on this one?

Uh, no. All my personal preference is when you get the, um, and then the next board meeting the associate comes and you're like, oh, that's a different issue.

Yeah.

Oh, that pisses me off. I don't like that. Anyway, that's a different issue. But I do want to move into a quickfire, Jason, because we could chat all day. So I say a short statement, you give me your immediate thoughts. Okay?

Okay.

So what sales tactics have not changed over the last 5 years?

What have not changed? I think that— I think what has changed the most has also not changed, which is outbound. Outbound still works. Even when we've all deployed 150 SaaS apps, evaluated 1,000, even when we're overloaded in the cloud, great outbound works. Great out— we do not all have time to do discovery on our own. So you're running a business, Harry. What's your number one problem that you have today in '20 overall? What's the number one problem you have?

Concentration of responsibility around me. Lack of delegation.

Okay. What if I had a tool that auto-delegated everything at 20VC and you didn't have to put any work into it and it handled it with AI? Would you take a quick call?

Yeah.

Okay. There you go. That's called outbound. Okay.

Sure.

That's— I just did outbound to you right now. I was lucky enough to get you on, on, on, on the Riverside, but so that has worked. Has sending that email to 10,000 people through Salesloft or Outreach or Mixmax, does that still work? Like, and I love all those tools, right? I've invested 2 out of 3 of them. It works, but its efficacy has declined, right? That, that— so my point is that one of the things that's changed most is this outbound playbook we perfected 5 years ago that we're all running has declined in efficacy, but outbound itself works better than ever. And I'm just shocked with all the applications out there and all the competitors that great outbound works better than ever, but mediocre outbound still works but is declining in its efficacy.

What sales tactics have died to death? Which do we just not see anymore?

I think the playbook keeps getting better and better with RevOps becoming a function and all these other things becoming a function. I just think that, you know, the— I'm not sure any of it does. The only thing that is really— that has changed the most is just when in the funnel we're doing face-to-face and when in the funnel we're making those connections. And I think the biggest change in venture and enterprise sales, because they're similar— venture and enterprise sales actually have some similarities to them— is that those first meetings are no longer done in person. And that has changed venture radically, and it has also changed enterprise sales, right? COVID changed it in that we are— like, I don't know what you see in your portfolio, but all of the enterprise SaaS companies I've invested in and worked with, they're all going back to going back to face-to-face meetings. Nick Met on Gainsight's talking about it. They're all going back. But no sales reps are doing it for the first meeting anymore. Right? They're for— we've learned what works from home and what doesn't over the last 20 months. And we've learned we want to get together, but we want to do it at the best possible time. So we want to do it in the middle of the sales funnel, right? And we want to— and where do we want to do it in customer success? I'm actually not sure I know the answer, but it's probably less in the kickoff meeting than the 90-day, the plus 90-day meeting, right? That's when you want to fly out. And we've gotten better at when to use that in-person time. But, but we're still doing it.

Do you enjoy investing by Zoom? I have Brian Seaman on the show from Founders Fund. He said, no, I hate it and I'm not doing it anymore. So I hate it.

I hate it. But I didn't know why until a couple of weeks ago. It's not because of the risk. And there is— it is increased risk. We've increased risk in venture, but the returns have gone up commensurate with the risk. Right? It is for me, and it's not because I'm so amazing at sussing out a founder when I meet them in person, like I have such a human superpower. I mean, we all think we're better at that than we do, right? Including all CEOs think they're amazing at it. It's more because the cadence was perfect for me. I would get an email and it would explain the business, right? We could meet in a week in person, I could ruminate on it, I could see if what I hoped was true was true in person, I could see if I trusted them and loved them and fell in love with them, and then I could decide about 20 minutes into that meeting if I wanted to invest. So I made all my investment decisions pre-COVID seemingly in 20 minutes. Like, you could ask all my initial investments, I would interrupt the first in-person about 20 minutes and I would always say the same thing. If everything you've told me, Harry, is true, I'm in. And I would mean it. Like, I would always say that. But I got a chance to do the work ahead of time. I got a chance to not be under intense pressure to make an instant decision. And I got a chance to spend that week or so ruminating and then using that in-person meeting to solidify that conclusion, right? Now I've gotta make, do that in the first Zoom. And I can get a, you can get a second or third follow-up, right? But it's become so transactional that I feel like I'm not as emotionally engaged and I just fade away a bit on that, on the transactional element of it. But maybe I've just been doing this too long, but I feel like I get, I kind of get a D for investing over Zoom. Even though I seemingly used to invest in 20 minutes, there was this secret process where I had 10 days to ruminate and learn that just changed everything and I don't like it.

And the compression of fundraising timelines has been so immense. You now have to decide within 24 hours sometimes.

You know that I think of all the things is less different than it used to be. I think because even back when I started investing in 2013, 2014, if a startup was hot, at least by the time I met them, because I'm different, they already had a term sheet. So I never had— I always had to make— I felt like I always, even though I did that 20-minute thing, I always felt like I kind of had to anyway. Because they already had, now maybe today it's gonna close this afternoon, like that's different than a couple years back, but they already had an offer, so you always, I think you always, I mean even in my very first startup years ago, I got term sheets the same day. Like that is nothing new. There is nothing new when that startup just stands out and they just grab the partners, they used to grab the partners down the hall right on Sand Hill and they'd throw everyone in the room and they're like, Harry, just actually before you go, I just have you meet this bunch of white men that work at my firm? Rob, Bill, Biff, Bobby, the other Bobby, and James and James and James. While you're here, do you have— can you just run through the deck again? And then you'd be having dinner that night in downtown Palo Alto and get a term sheet, right? So it is compression. I actually think the compression— what I've seen, I think it's harder on the late-stage investors who no longer can do diligence. I had, I had an investment recently that it wasn't $1,000 AXR, but it was a relatively hot round, and one of the best VCs I've ever worked with called me and is like, "We don't have time to do any— can you just do all the diligence for us?" I told them all the VPs, all the issues, and I think it was very helpful. They literally— this is a relatively conservative firm— they just— there's just no time, right? The advantage to seed is the diligence universe is a little bit more confined. So I think it's somewhat easier to do it on that compressed time saying, but I'm totally with you.

I see a lot actually of kind of growth firms kind of doing the thesis deep dives and then making them more personalized for companies and then going active outbound and saying, hey, RevenueCat, we've done all of this work in the space, we've spent hours doing it with the market. And that's how they kind of approach deal winning.

Yeah. So I think those things have just got— people coming in, it's just gotten faster as it should on the internet. Right. But, but the, the fact that the whole process is transactional is new, right? That it's entirely, entirely transactional. And then I see these founder-led funds literally making decisions in 5 minutes with relatively large pools of, of capital for seed funds. That one is like the ultimate disruption. Like, I was just on the phone with some CEO, some unicorn CEO. She's throwing in $250K into the round in 5 minutes, right? That's great for the founder, but as a traditional investor, it's hard to compete with that, isn't it? I see this all the time. And you do 10 calls with founders, all of whom have their own fund, or maybe have a very large scout fund or whatever, and they've put in $3 to $4 million in a day. They make $5— they don't do any— founders don't do any diligence, right? They just— it's like they just decide if they're great, right? And so that's the— that I think is the— is the— that's the ultimate inversion of this, this hyper, hyper version.

We're not going to talk about founders raising external money for funds that just— it does not bode well.

So, you know, I— if you— if you— if you'd even talked to me 8 months ago, I would have agreed. Now, like DocSend and other things, you got to give up. It's the train's left the station. There's too many founders that are going to raise 9-figure funds while they're running their own startups. And it used to be a bad sign for the startup, right? And it used to be like, how could you do anything other than run your own startup? But it doesn't matter what you and I think, because there's going to be 50 of those funds. There's going to be 50 9-figure funds.

I don't get the trade-off in terms of time, though. You know, I see quite a lot of my friends who run amazing companies and they have $5, $10 million funds. And I'm like, if you increase the enterprise value of your company by 1 or 2%, you'll make far more than you will from this $5 million, $10 million fund. Just focus. Angel invest, get— take some secondary angel invest, fine. But if people give you money, you are committing to them and you have an obligation to them. To go and raise money for a separate fund, it's just—

I I think they think they're going to raise— more and more of them will raise $100 million though, Harry, and they think they'll do 4 to 5x funds. And so if they and their partner can split up extra $100 million in carry while they're running their company and say take $20 or $30 million of secondary out of their own Series B round, they feel like that's a world they like to live in. Like, I can get $20 million in cash from my secondary, I can run my company to a decacorn, and I can make another $100 million from my founder fund. I think that's appealing. That's not a tiny little seed fund. That's people are going to give me $100 million. And because I'm at a center of some hub, I can deploy this $100 million effectively, right? Likely with limited pro rata and other issues. So my absolute return, if I do enough of these deals, could be good, right? Most of these funds like this, they have one great decacorn in their portfolio and it just worked. It just worked, right? So, so that like, yeah, you're like, God, I would never invest in a founder that has their own fund. 2022, you may be doing this every week.

That's hilarious. Tell me, my friend, final one. What's the most recent publicly announced investment and why did you say yes and get so excited?

What's the most recently public? The recent one was from a little while ago. Boy, it was. And you have to keep challenging your play. Maybe the most recent public one is a company called Owner.com. Which is to oversimplify, maybe is a next generation Toast. And it's in a space that's very competitive, right? Has margin issues, lots of challenges, hard to understand the competitive landscape quickly. So those things seem to break a lot of the traditional rules, right? But one of the things that I've realized, there's a couple reasons the investment was interesting, but one of the things I've realized is I've just fallen in love with the incredible CEO-CTO pair. I don't mean both good, I mean incredible. And when you have an incredible CEO that can see the future and a CTO that can ship software 5 times faster than a pretty good CTO, their ability to iterate is so jaw-dropping, right? And when I see that CEO-CTO combination I honestly, when they're both A pluses, right? It's hard enough to get one. Everyone thinks everyone's, but when I see both as an A plus and any traction at all, like any traction at all, I feel like I literally cannot lose money on that combination. And as an ex-founder myself, I feel like, and a lot of investors are now, right? It's no longer unique, but I feel like I have the ability to know when both are great that some people can't. And when they are, I'm like, God, even if they screw it all up this quarter, the software they'll have next quarter. I just got an email from Owner and like they added this whole new marketing automation level, right? And its first month it added $200,000 in revenue. Its first month. I'm like, who does that, right? I mean, the level of agility, right? And we see hints of this in Stripe, right? And others at scale. But that's my rambly answer to what I'm obsessed with. And when I look back at startups I've done where, you know, the CEO is pretty good, but the CTO's turned over a couple of times, or there's just not that Batman and Robin pairing, you, you can do it, but I'm done with those ones, I think.

Listen, uh, Jason, this has been so much fun. I love our chats always. I can't believe it's taken us so long to do this again, but, um, honestly, thank you for doing it, and, uh, I really appreciate it, my friend.

Thank you, Harry.