Mike Smith and Nikhil Basu Trivedi – Footwork Ventures (Manager Meetings, EP.12)

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On today's Manager meetings, Beezer Clarkson speaks with Mike Smith and Nikhil Basu Trivedi Beezer is a past guest on Capital Allocators and is a partner at Sapphire Ventures, where she's responsible for the management of Safire's fund investments in Early Stage venture funds globally. Mike and Nikhil are co founders of Footwork Ventures, an early Stage venture firm that closed on its first fund earlier this year, which was significantly oversubscribed. Footwork plans to invest in seed, Stage and Series A companies with early signs of product market fit and the potential for decades of customer love. The partners discussed their blend of investing and operating skills and their fundraising process. Before they kick it off. Beezer and I discuss how she discovered Footwork, her due diligence process, decision to invest, and gaining capacity. Beezer, great to see you.

Great to see you too, Ted.

So thanks for bringing the Footwork guys to us. I'd love to just ask you a couple quick questions and I guess first, how did you meet them?

Excellent question. So we've known Nikhil now, I say almost going on four years late, 2016, 2017. I think when he was investing with Shasta, it was one of our jobs as an LP is to keep our eye out for getting to know great people and keeping an eye on them. So when we met him we were instantly impressed. I'll be honest, the second you talk to him, it's crystal clear his investment acumen around the consumer space and the consumerization of enterprise got to know him during his time at Shasta. When he left Shasta, we heard about it and reached out to him again. Our job is to keep tracking potential folks out there and we were really excited to hear about him joining up with Mike Smith and launching Footwork. So there you have it.

So what was that due diligence process like once they got together?

Well, we knew Nikhil, so that's the base of the knowledge and we had experienced him and how he thinks about deals. So a lot of it was trying to get to know what that meant for Footwork and for bringing in Mike and who Mike was as a person. He's Probably I think one of the first investments we made in someone we'd never met in person, which is a thing during COVID not a thing beforehand. We have since met him in person and more than lives up to any of the glory of. In fact, the resonance is even stronger in person. So a lot of it was getting to know the deals. They had done some deals together. It's always a question, not just what you've done as far as dollars invested, but why someone likes a deal. It really speaks to us about what makes this manager different, how they think of a deal, how they think of the space it's in. Those kinds of questions we understand who they are as an investor because that's the blind pool bet. I mean Mike and Nikhil can tell you what they think of the world, but until you see what they do and how they get their spot on the cap table, you don't know what's happening.

And how about relative to other first time funds, you have this combination of an investor and call it an operator. How did that compare to other things that you might look at?

It's our job to go out there and try to find the funds that we think are going to overperform, be it within our existing portfolio or ones that are not there yet. And we do look at a number of first time funds, they just have some special advantages. I don't know if that's a polite thing to say to the rest of the world, but you have this marriage of Nikhil's investing acumen and Mike is a phenomenal operator. I mean you can read his resume and just see what it says on the words when you speak and do the references. Everybody wants to work for him. I mean at the end of speaking to him, I wanted to work for him. So he's very powerful in that way. And there's something about bringing that operating experience and integrating it into the fund they're doing in a slightly different way than other funds. Leading with who they are first versus tacking on an operator on the side and saying, oh, you'll get a little extra opinions on this two or three hours a week. But this is really much more of how they go to market and who they are. We think that has the potential to be very compelling.

Great. So one last question. It sounds like despite this being a first time fund, it was oversubscribed. And so I'm curious, how did you think about and go through the process of gaining access to what became a very popular first time fund?

I don't want to front run what's in the podcast about how and why they pick their LPs. So how about we let them answer it because this was a question I had to them. We just feel very privileged to be part of that mix. It's not something we ever take for granted that we will have an allocation. Even if we've known someone for a while, even if we're an existing lp, we always feel we have to show up every day and put our best foot forward. It's a pretty competitive market out there.

Beezer, it's great to see you as always. Thanks again for bringing this in.

Thank you. Take care. So thank you again for joining me and making the time for this. I thought as a beginning we could start with your origin stories and we could have each of you speak to how you found your way into venture and maybe share a few bits about your first investment, what you remember about it, what was the experience of doing that for the first time, and then we can talk about the origins of footwork.

That sounds great Visa, and thanks so much to you and to 10 capital allocators for having us on.

So Nikhil, why don't we start with you and you can talk about your journey into venture.

Sounds wonderful. I got to move to the San Francisco Bay area when I was 13 years old and I never heard of entrepreneurship or venture capital until I moved here from the UK and suddenly I was exposed to it at a young age and so fast forward a couple years I started a company during college, I got exposed to venture capital from that side of the world and I was just fascinated by it and the light bulb went off for me that at some point in my life and in my career I'd love to go to the other side of the table and to get to try and I had that opportunity to do so at Insight partners starting in 2010. I spent a couple of years there and then moved to Shasta Ventures and to Early Stage investing back out here in the bay area in 2012 and spent the past eight years at Shasta before starting footwork with Mike. And so just feel fortunate to have gotten exposed to venture capital at a young age, to have started a company and been on the entrepreneurial side and then to have moved into venture capital.

Do you remember your first investment?

So at Shasta, the first couple companies that I got to be a part of in the 2012, 2013, 2014 era were ClassDojo, which is an education technology company, and Canva, which is a design software company. In ClassDojo's case we led the Series A at Shasta and in Canva's case, we were part of the seed round. And so those were the first couple investments, both of which have fortunately gone well since.

Pretty amazing first couple of investments. Way to start your career on a high point. And Mike, you have a different path into venture investing. You've had an incredibly impressive and successful career as an operator and I'm sure you had opportunities to continue down that path. So how and why you came into venture and what your experience was as your first investment would be super to hear about.

Yeah, I mean, I feel really lucky to have just amazing mentors and great experiences on the operating side, as you mentioned Beezer. And so I grew up in Virginia. I went to University of Virginia for undergrad and then moved out to California after a few years of consulting to go to business school at Berkeley. And similar to Nikhil, a little later in life than 13, got to experience venture capital and understand the ecosystem of founders and the ecosystem of startups and I was just blown away. I kind of found my way six years after business school of not having found exactly my swim lane of what I wanted to do. Had this amazing experience@walmart.com where I joined in the first like 100 people were at the division at the time. 150 million in sales is what we had done and got an amazing nine year run of helping build Walmart.com from 150 million in sales to 5 billion in sales, take the company from 100 people to over 12,000 people. And I was responsible for as chief operating officer for 10,000 of those 12,000 people. And it was just an amazing experience of hyper growth. Now at the time I thought it was a startup and I think when you actually get to work at a real startup like I did in my next journey at Stitch Fix, you recognize startups are very different when you actually have to go raise your own capital. But I had an amazing run there and then joined Stitch Fix when we were just four people. Met Katrina Lake and just was blown away by her and was there for nine years. And I do think that both those experiences, in particular the walmart.com experience and the Stitch Stitch Fix experience, really drew me into venture capital. I again really loved the early stage and hyper growth that comes from the most successful startup companies. I love the learning that comes from those kinds of experiences. And then frankly, we had a really challenging time raising capital for Stitch Fix. I got to see some tougher parts of the asset class where I felt like venture capitalists weren't understanding our story, I thought I had more to give. So that's one of the primary reasons that I got into venture capital was I thought that as an operator, the specific seat I got to sit in at Stitch Fix, taking the company from five people to 10,000 people, from basically zero revenue to 2 billion, and also just the kind of challenges that we had in the ecosystem. I felt like I had a lot to give to founders and hopefully to founding teams as a venture capitalist based on my operating experience. So that's one of the primary reasons I got into it. But then there are all these personal reasons, too. Nikhil is the primary reason. I think he's just a very, very special person and an amazing investor.

I think you're the only person I've heard since I've been doing Venture since 2000, has said they joined venture because they have more to give. So that's awesome. And I'm going to use that as the bridge to Footwork. Can you guys share with us what the idea was, how it came to be, and then how you two came together? And we can parse it out, but give us the overlay of what footwork is doing as well.

The journey for us started just over a year ago when I left Shasta Ventures. And I had been thinking for a while before leaving that I wanted to go build a new venture firm. And the question for me became what type of firm to build and even more importantly, who to build it with. And so I embarked on a process where I did a bunch of writing for myself about the venture ecosystem and where it's headed. I've published some of those pieces of writing into blog posts along the way as well, about things like solo capitalists, about the bifurcation of our industry into agglomerator firms and specialist firms. The second part was coming up with a list of questions to go through with potential partners to figure out what we wanted to build and to figure out where we were aligned on values and principles, but also where we were different as part of that process with the questions. The reason that I got so excited about paying Mike was Mike and I had been on the board of a company called Imperfect Foods Together, which is an online grocery delivery business. Starting in 2017, I'd been part of the seed and Series A investments at Shasta, and Mike had joined the company as an independent board member, and we had shared car rides to and from those board meetings. We discussed working together beginning in 2017 and 2018. But last year I reached out to Mike and said, would you Think about building a venture firm because I knew that we were aligned on a bunch of principles and values going in and that we had a bunch of mutual admiration and respect for one another. And so we went through this questions process. We started making investments together and the two of us got more and more excited about what we could do together. That culminated in our decision last fall to to go build Footwork together, to start to speak to limited partners. And then In January of 2021, Mike left Stitch Fix and in April we closed our first fund with 175 million in commitments and are now off the races. So that's the footwork Genesis story.

Congratulations, Mike. Do you want to tell us a bit about what makes footwork different To Nikhil's point, He's written amazing amounts, insightful commentary on the venture ecosystem. So you two really are uniquely positioned to figure out a different way of playing. So do you want to share with us a bit about what you're doing?

Yeah. As Nikhil said, We raised $175 million. We are focused on the early stage of venture investing. So Series A and some seed investing, we look for early signs of product market fit. We have to see that in order to really understand what's working in a product or service and what frankly is not. Where is there friction? So we can understand, understand how scalable is the idea and so we look for that. We like to lead or co lead investment rounds and so we like to get our ownership stakes up front and we definitely take board seats because we feel like we have a lot to give. We have differentiated styles and differentiated approaches, but we think that those styles and approaches are really accretive to founders and founding teams. And so the way we work organically is one of us will take the board seat and the other one will be a board observer. But what founders and teams get with us is they get us all in and they get both of us and they get both of our experiences. And it'll be interesting to see as we raise capital for fund two and fund three. How do we scale this? I mean, I think that's the most challenging part of a full equal partnership model. And when the GPS are on the field, how do you scale that kind of approach? But early on, we are showing up, I think, extremely well to founders because of our core values and principles, how we show up and where we can add value to teams. But core is early stage, really being hands on and being true thought partners to founders as they scale their ideas.

I want to dive into a number of different things that you mentioned. Let's start with the core values and principles. Are there specific ones that you could share with us?

One of them is this combination that we have in terms of operating and investing experiences and how we think that can add value to companies, but also how we think that differentiates how we source investments, how we make investment decisions. And so that is core to footwork today in Mike and my combination. But as we think about the firm five, 10 years from now, 15 years from now, we want that combination to continue to be reflected in footwork. And so that's principle number one of what we're building together.

I was just going to ask you to dig into that a little bit more because I know when we talked the other week, you use the term differentiated ability, which was such a wonderful way of expressing Nikhil, your amazing track record in venture and Mike, your amazing operating experience and how the combo is so powerful and very current.

Yeah, I can double click on that a little bit. I mean, first of all, it's really interesting now being more in the ecosystem and the investor ecosystem where I see pitches now for new funds that are getting started and they talk about investor operator combo. And I think that what is different about us are the specific experiences we had and the success we've had in each of our individual lanes. That is very differentiated. So I'll brag on Nikhil a little bit. I mean, he's in a very unique cohort of investors that are still early in their investing career that have invested capital at scale. So over $100 million of capital invested at costs that have outstanding return. He can do this for decades more. And that's not a regular investor. I mean, there's a handful of people that have a track record like that. And frankly, he was the only one that wasn't attached to a firm. And I do think that my differentiated experience as an operator, there aren't that many people of any people that have sat in the seat that joined a company as employee number five, as a C level executive, went through the challenges of building a company, as we mentioned, tough fundraising environment, really, really hard to scale from 0 to 2 billion in the speed that we did it, play a number of different roles at the company as COO three different times, CFO three different times, and actually CEO twice when Katrina took full 16 week parental leaves. And that to us is showing up with founders very, very strong because Nikhil has a track record of doing a lot of different deals in SaaS and consumer tech and showing success. There's and My experience as an operator isn't just regular experience as an operator. And I think founders are really resonating with how we both show up. There's also a core value that we have of relationships that are human, not transactional, that is also showing up very strong on the field. I mean we like people, we like to spend time with founders. I think we ask really good questions. I think we're very good thought partners and I do think that just how we're showing up on the field in the early days of Footwork, we're getting terrific feedback from founders that it is kind of a differentiated approach.

Awesome. You had also mentioned in the announcement of Footwork about being thesis driven specialists, so could you share a bit about why you picked that model? Nikhil, you really have done a great job. I love reading your substack and how you parse the ecosystem.

When you are a small firm and footwork is two of us as GPS and $175 million fund, we're not a 30 person team or 100 person team billion dollars of funds. When you're a small firm, you can't do everything in today's ecosystem and so you have to decide where you want to spend time. And so the principle behind being a thesis driven specialist is finding swim lanes where we go deep in certain areas, where we look at all the companies in that area and where we figure out the types of bets we want to make in those areas before making an investment. Examples of this for us and we've announced for example, one of our early investments in Footwork Fund 1 in a company called Vea, which is in the E commerce infrastructure software space. That space is one where Mike and I have now looked at a number of different companies. We've been thinking about that category for several months and we ended up landing on via as investment number one in that thesis area. And we also think that that's a thesis area that makes a lot of sense for us given our backgrounds, given the investments that I've made in E Commerce and in SaaS, and given Mike's really unique operating background at the helm of a couple different commerce businesses that have gone on to be incredibly successful. And so that's an example of our approach and hopefully it makes sense to folks in the ecosystem as well. We also think that that approach can not just enable us to make better decisions and to help companies in those areas, but can enable us to win against other firms in this hyper competitive market when we've gone deep in a.

Certain area hypercompetitive is a great way of talking about the venture market today. Is there anything else about that that you can say about what got you to say yes. So entrepreneurs listening can know if they want up at Footwork's door. What's very compelling for you too.

There were several elements that led to Mike and I deciding to make this investment and maybe we discussed that first and then we can speculate on why those founders at VE picked us. For us, there are four elements that we look for in every investment. The first is that we have to see some early signs of product market fit. And with Via, the product had launched just over a year ago. The business is already at hundreds of customers, millions in annual recurring revenue, it's barely spent any capital and it's in a space of SMS based marketing and customer support into this mobile commerce ecosystem that has a number of other players and yet it has differentiated itself as a product and it has a go to market engine that is really working. And so we saw the early signs of customer love and product market fit in VE and got really excited about the investment. The second piece that we look for is the potential for a product to have decades of customer love. And with ve, what was exciting to see is several of ve's customers are now driving the majority of their revenue and the majority of their sales on the VE platform and through ve's service. And the success they're having with VE is only increasing as they continue to use ve. And so that characteristic felt very special in VE and led us to believe that this company has a chance to have some serious longevity. The third element that we look for in any footwork investment is a market that is hopefully large, but more importantly is expanding. And what we feel about this area of mobile commerce is the world is just going to continue to move to mobile. More and more folks purchases are happening on mobile. There are estimates now that the majority of E commerce is happening on phones versus on computers. And we don't see that trend changing anytime soon. In fact, we think as the checkout experience becomes easier and easier, more and more products are going to be bought on phones. And then the final piece that we look look for, that we saw in VIA as well is about the founders. And perhaps Mike, you can talk about that and what we saw with Tejas and Greg.

Yeah, I mean there's three characteristics that we look for in founders. The first one is a founder that's hungry but also humble. We seek humility because we think that founders that are humble. I mean you have to have confidence to do this. But founders that are humble recognize where they need help in terms of team building and where they have gaps in their own leadership skills. We like that humble founders also are honest with us about what's working and what's not working in the product. And we can be good thought partners to help them think through challenging situations that they're having as they scale the product or service. And so hungry and humble is the first one. The second is someone a founder that knows his or her business inside and out, someone that understands the unit economics of their business, the contribution margins of their business, what capital is required to scale their business. And the best founders, I think, just know like all three financial statements and can talk really intelligently about how their business needs to scale and what capital is required to scale their business. And so knowing your business inside and out is characteristic number two. And the third one is someone who's a talent magnet. It is impossible, in my opinion, to sort of scale these businesses by yourself. You need a great team around you. You need to, like I said earlier, understand your gaps in terms of understanding what you're really good at and where you have your energy and where you have to source talent to help fill the gaps that you have. And so those are the three characteristics. And I'll take a stab at speculating why Tejas and Greg picked us. I mean, I do think it has to do with a lot with the core values and principles and our core pillars of footwork. I do think Tejas in particular liked the combination of an operator and an investor, specifically in the E commerce space. And the experience that Nikhil walked through that we both have. And I also think just like ourselves, showing up hungry and humble. I mean, we're excited to be founders of our firm. You know, we're entrepreneurs ourselves. And I think that resonated really well with Tejas and I think we'll continue to resonate really well with founders as we continue along this journey of building footwork.

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I want to pick up on what you were talking about, hungry and humble and talent and building footwork and link it to a comment you made earlier about using Equal Carry. Because the question of how a GP structures their carry clearly has lots of implications for all areas. Culture Team could you share a bit how and why you decided on Equal Carry? And I appreciate there's two of you now, so it's probably slightly simpler math, but it sounds like there's going to be growth of the team in the future and how you're planning for that.

Yeah, our belief is that an equal partnership reflects the type of work that actually should happen at footwork in the years ahead. Where this isn't about which investments are are my investments and which investments are Mike's investments. What matters is that the firm and each of the investments in our funds are successful and all of us on the team should be equally incented to help make those companies successful. It's the economic incentive that drives the principle behind wanting all of our investments to have shared attribution, to have the attention of all of us in our partnership to help them. And we really don't care who is the one sitting on the board, who is the one that sourced it, who's the one that perhaps was more excited about the company when we made the decision. Once an investment is part of our portfolio and we think equal carry approach is the purest form of making sure that that happens. And so when we will expand our partnership one day, we hope to bring in folks at the same equal level and to give them the platform of our firm as a result.

The only thing I'd add, Beezer, is one of our core values and principles is diversity across every dimension is a competitive advantage and Nikhil and I are different. Nikhil, like I said, has been an investor for 10 years and I've been an operator for a number of years. But we also have different styles and we have different superpowers. We think and we're showing already. Nikhil is tremendous at understanding real product market fit and being able to ask a lot of questions of founders of what's the cohort doing and where are your retention curves and where do we need to improve on the product? And I think I'm really good at org design and leadership and talent management based on my experience at stitch fix and walmart.com and I think when you bring those superpowers together instead of having them be individual things that show up in working with a company, the company gets all of it. They get all the power. And I think we bring on a third GP or a fourth GP and you get even more creative styles and skills. We just think that that's the best way to run a firm. We talk a lot about teamwork as sort of a core pillar of ours. And you know, on a good day, I think venture firms on their best day are golf teams. Like individuals shooting their best score, their lowest score and adding them up at the end. We really think about our team and our approach more like a basketball team or a soccer team where people have differentiated skills on the court or on the pitch. And we want those skills to shine and be specialized. But the power of them all coming together is what we're super excited about in our equal part partnership.

That's awesome. So I always joke around about how being an LP is like being in the bleachers, or sometimes I refer to it as the peanut gallery, but it kind of fits with your team and soccer and basketball analogy. So going to go with it and I'm going to use that also to bridge. I know there's not great metrics out there and how long it takes to fundraise, but it's not uncommon to take a couple years for a first time fund to come together. And this was not your story. I think your story was a bit faster. And if you're willing to share a bit, I think people would be fascinated to hear how the fundraising process us did go. And to the extent you can share the ALP base that you chose, congratulations on having choice. That's also not easy for a first time fund.

First of all, we feel very fortunate that it happened quickly for us and there is a lot of luck involved in many elements of our business. Our timing was good and in some ways we probably benefited from the pandemic because we were able to raise this capital from our home homes on zoom versus having to travel to see every single potential LP in person. But I do think there are things that we did that helped our process. One of them was just being intentional about every single aspect of fundraising. From how we came together as a partnership, the questions that we went through to sort of push one another to decide to do this together. I think that we showed alignment in the conversations that, that we had with LPs in our own partnership. And the most important thing for a first time fund is LPs are betting on the GPS with just an idea. And so the partnership has to show strength and has to show some level of alignment and intentionality and the fact that it won't break. And I think Mike and I did a lot of things to make sure that that was going to be the case for ourselves and that really helped us in funding. I do think that we have special stories as individuals from our backgrounds. Mike is just too humble to discuss all of his achievements as an operator, the boards that he's been on. And I think that success makes him a really unique player in the venture ecosystem. And with my investing background, I do think that that combination helped us show that we were a unique firm from day one to, to a number of limited partners. And then we were just rigorous on making sure that we followed up quickly in every conversation, that we answered every question properly and concisely. And I think all of those steps helped us drive an efficient process. But Mike, maybe you can talk about what we looked for in LPs once we were fortunate to have some choice.

We felt very fortunate to be in a position in early March of being, call it 2x over subscribed our target and we went into the process to Nikhil's point, being very intentional about what we were looking for. We actually wanted diverse pools of capital as an example. So we wanted capital from obviously it'd be great to have capital from university endowments that have been in the asset class for a long time, great fund of funds, great family offices, foundations. And we wanted a good balance between those pools of capital and we were able to do that. But we were also prioritizing people and firms and LPs that have been in the asset class for a long time and have seen world class. We fully expect Footwork to be a top firm over our many years of working together. And I think what helps you hold yourself accountable to that level of performance is having people around the table that will push you to be world class, that have seen world class, that understand what world class firms look like. And that was an important characteristic for us to look for in the LPs that we selected. Another one was that people just that fundamentally believed in our approach and our core pillars and believed in us as people. And we were able to find that with the group of LPs that we selected and are fortunate enough to work with. And then the last one is just causes. I mean, you know, you're in this business, you're trying to make money for LPs, you're trying to support founders and you want to support their journey, but you also want, if you're going to make a lot of money, make it for people that you care about and are going to do great things with the capital that is distributed back to them. And we feel great about the group of LPs that we have in our base. They do support amazing causes and they are amazing people. So there's a lot of luck involved. But there was a lot of intentionality in our approach in trying to structure the LP base with this different, good, diverse pools of capital. And we're really fortunate to be in the position we're in.

Mike, you and I didn't meet in person until after the fund was closed. I think for many LPs that's tricky, as facilitated as it is to do everything on Zoom because it is a multi decade relationship. So out of curiosity, did Most of the LPs that came in, did you only know them on Zoom or was there a mix?

Most of the LPs we did not meet in person during this process. And I think to Nikhil's point about timing being our friend in this, if you look back to call it March or April of 2020, when the pandemic was first rearing its rough head, I think it would have been really hard to raise as much capital as we did in two or three months. By the time we were out raising the end of 2020 and the beginning of 2021, people were more used to meetings over Zoom. They were actually pro starting to commit capital to early stage fund managers that they weren't meeting in person. So there was a rhythm and sort of a muscle building that had already happened at the timing that we went out. But it's uncomfortable for us too. I mean we want to have LPs around the table that will push us and have seen world class but are kind people and that we want to be sort of in decades of relationship. And so we wanted to meet people in person too. And so, so as things start to open up, we're very excited to spend time and we're grateful Beezer, that we were able to spend time with you and Lara. But we want to do that with all of our LPs because it was just obviously a very strange environment to be able to sort of build trust, build relationship over Zoom. There is nothing that can replace a meal with friends in this process and we're excited to do that. But just even four or five months after the pandemic was a different funding and fundraising environment than what we saw, probably for people that were raising earlier in the pandemic.

Totally. So I like to ask this question because it helps educate me. So this is me asking a favor in some ways. What advice did you get about fundraising that turned out to be bad advice?

I'll throw out one. We got a lot of advice to say we're doing a first close and we're doing it on this day, and. And to drive everyone to do as quick of a first close as possible. Our approach ended up being a bit different where we said this is the fund that we want to raise and ideally we'd want to do it and be one and done on a close so that we can figure out what all the different puzzle pieces of LP construction look like and how to fit it all together in one close. And that's what we ended up doing. And I think it was partially because of the unique position that we ended up being in that did happen. And we recognize a lot of firms need to drive towards just a first close to get into business. But I don't think it was the right advice for us. The key thing, anytime anyone gives you advice, is to figure out what advice is right for you and what advice may be right for others. And in this case, the right advice for us was to drive to a one done close and to put the pieces together for that close and then just be done. And in business. Mike, I don't know if you of any that you would throw out. That was perhaps worse advice for us, not worst advice.

I mean, I think people have strong points of view about pools of capital and who you raise capital from. There are certain pools of capital that say, oh, you should only raise from our pool of capital, and others that say you should be differentiated and have a diverse set of capital. We were very steadfast in believing that it needed to be diverse in terms of where the capital was coming from. And it shouldn't just be from one type of capital. We learned that quickly and stuck to our guns in terms of having it come from different pools of capital. And I think that'll be prove ourselves really smart over kind of decades of footwork.

May I ask why you believe in the diversification of capital? We follow suit in that. But I'd be curious to hear what resonated for footwork in that.

What you've seen across decades of the venture industry is that different pools of capital can go in and out of the venture market. There have been times where endowments have pulled out of the asset class because they face liquidity challenges and their own organizations have been heavily impacted by a financial crisis. And then there have been times where fund of funds have been really difficult to raise capital for themselves and their own timelines have affected their their commitment to the venture asset class. And so what we learned from chatting with other managers and capital allocators is that there have been so many changes in different allocators approach to the venture asset class over the past several decades. We cannot predict the future. And the best decision for us is to have capital from all these different pools.

Yes, that's been our experience too. I always like it when I agree with you. It makes me feel better. I wanted to ask you Nikhil, a bit about your decision to be a social media blogger and your substack is phenomenal and I guess why you did it. And do you see that as a differentiated advantage in the market today?

Certainly for me the initial impetus to just start writing was to try to give back in some way. I've benefited from reading the writing of several venture capitalists over the past decade and I honestly think it's a service that folks have done to help educate others and future generations. But then what I learned when I actually started publishing on a more regular basis is just how much learning comes from writing for oneself and how much learning can come from getting feedback from others by putting it out there in the world. And so what I find now when I write a post is I learn so much after the post gets published, from people who respond to the post, from people who comment on the post, from follow up conversations that I end up having. And it refines my thinking on that idea that I published a piece around. I found it's a wonderful flywheel and I hope to keep it going for years to come.

Good. I look forward to reading many more posts. Posts I have to thank you for creating the word agglomerator because I now use it all the time to explain what's going on in the market. So thank you for that. Maybe I have a little copyright we should talk about so I can make sure it goes in the right direction.

I have to thank my friend Kanye Makubela at Kindra Adventures for helping me come up with that word because I've referred to these multi stage and multi sector firms as platform firms firms. But that doesn't feel like a great word to describe them. And in a conversation with him he came up with agglomerator as a better word and so that's what led to that post about the venture industry and naming those multi stage and multi sector firms as agglomerate of firms.

All right, as promised, we're going to do the closing questions and we'll start with what is your most important daily habit?

For me, it's exercise every morning.

Strangely, for me, it's the same, except that specifically I got way into peloton and do that, that pretty much every morning before starting my day.

Great. So outside of your daily exercise, what is your favorite hobby or activity outside of work and family?

I love sports. I think there's a lot to learn from sports. The highs and lows that come with athletics I think is really good life lessons and leadership lessons. And then the second one is I'm really big into wine. For me, it's this idea that there's almost zero chance that you can be an expert in wine. I mean, even master sommes have. There's so many terroirs, there's so many years, there's so many different grapes. There's. It's a lot to learn and I appreciate that high hockey stick of learning that comes from trying to have a skill in understanding wine.

I promise you, Mike and I are different in a lot of different ways. But I've been sports obsessed for my whole life. But especially this summer, I think think with restrictions easing up and spectators being back in these different sporting events and then following the stories of EURO 2020 and Grand Slam tennis being back and the Olympics coming up, it's just a lot of fun this summer to follow a bunch of different sports. And so I am spending a lot of time on that.

Okay, so we'll see if you're different on your biggest personal pet peeve.

For me, this is inauthenticity. I have to have people be real with me, me. And when that isn't the case, I struggle.

And for me, it's ego. I appreciate confidence, but I don't appreciate ego. And I actually don't think it has much of a place. I think ego hides people from being vulnerable. And I think vulnerability builds trust. And I think trust is one of the most important attributes to life.

And what's your biggest investment pet peeve?

For me, it's founders that optimize on price or specifically say I'm raising at X valuation that doesn't match where the business is at that time.

This one for me, in the fundraising process, what I struggle with is when founders don't concisely answer a question and talk around it and try to Give the promotional version of the answer and.

Which two people have had the biggest impact on your professional life? Or you can pick one if you'd prefer.

On this one, I'd have to say my parents, their jobs brought us to the United States, and. And that led to me learning about entrepreneurship and venture capital. And so I don't think I can legitimately say that anyone had as big of an impact on my professional life and my personal life as them.

And for me, it's probably two mentors, one that's two decades old and one that's just in the last decade. Gentleman by the name of Carter Cass. Carter's a professor at Northwestern, at the business school there. And he's just been a tremendous resource for me on leadership on family. He's an author. He's a renaissance man. And I just really like his approach to learning, and he's just always been there for me. And then the second one is an African American, longtime exec and advisor to venture firms and founders by the name of Ken Coleman. And I got to know Ken probably a decade ago. And Ken, you know, at the end of my first meeting with him, I asked him, how can I be helpful to him, probably realizing that some of his ilk, I can't really be that helpful to you. But he said two things. One, be very successful, and two, hire more people from underrepresented groups. And as an African American man, I think about these things all the time. I have to be exceptional. I'm fine with the burden of trying to continue to be exceptional as someone that comes from an underrepresented group. And Ken has had a tremendous influence in answering that question for me.

Wow. So, turning the other side of this a bit, what is the biggest mistake you've made and what did you learn from it?

For me, the biggest mistake was focusing on title and compensation and these more fleeting things in business versus learning and development. And am I just getting better at my job every day? And I think when I switched on to caring about development and by just getting better each day, my career actually went up and to the right at a much faster rate than when I was focused on when am I going to get promoted and how much money I was making.

I've now made a bunch of investment mistakes in companies that I passed on that have turned into tens of billions of dollars in market cap. And those are really painful. The unfortunate reality of venture capital is you're going to continue to make those mistakes, and I'm going to continue to make those mistakes. That means that I'm actually seeing good enough stuff. But what I've reconciled in my head is it's really about the investments that you do make versus about the ones that you don't make. And that's what prevents me from having too much FOMO and too much regret in those mistakes.

Okay, two more. Which teachings from your parents most stayed with you?

I think from my parents, what I've learned is that there's no substitute for hard work. I mean, both of them still work incredibly hard, and they've taught me that through their hands, actions, and not just their words.

And for me, it was how important education and just raw learning is. My dad was the first in his family. He was the eighth kid of eight and the first to go to college. And he just really impressed upon us as kids that going to school and being excellent in school was the thing that would start us on our path of hopefully being successful. And so education was the most important lesson that I got.

So, building on that, what life lesson have you learned that you wish you knew a lot earlier in your life?

I think for me, it's that these things aren't linear. Like, it's really hard to have a career that's up and to the right without some challenge, without some things that don't go right. And, you know, I think it's important that people understand early in their career that it's not linear, that it is a winding road and really lean into the wind of the road and try to understand what you're going to learn from the windiness of it. I know that as long as you stay focused kind of on learning and just getting better every day, that you'll probably end up on the other side and that the trend line will be up and to the right. But the actual data points, it's just not the way it works.

What I wish I'd internalized earlier, but that I now have, is work with people you really like and get energy from and just enjoy working with every day. Life's too short not to have that. And I feel really lucky, as everyone can now see through this conversation, to get to do that with Mike today at Footwork.

Well, I just want to say I feel so lucky and grateful to get to spend time with you two as well and to do this podcast, which I got to learn so much more. I thought I knew a fair bit, but turns out, just scratching the surface. So many interesting perspectives and insights. So thank you for sharing that with us.

Us.

Thank you.

Thank you, Biza.

I hope you enjoyed this conversation. And maybe even piqued your interest to explore further. See you next time.