Foundry Group Investor Jaclyn Hester on Capital Call Best Practices | Seed To Harvest Ep40

Welcome back to Seed to Harvest, a podcast with founders, creators, and investors about their stories, frameworks, and tactics. I'm your host, Paige Finn Doherty. I'm a founding partner behind Genius Ventures, and today I'm honored to be joined by Jacqueline Hester, partner at Foundry Group. At Foundry, Jacqueline leads direct investments in early-stage companies. She operates with a passion for supporting the next generation of entrepreneurs and investors. Since 2016, Jacqueline has focused on making direct investments as well as launching the partner fund strategy, building Foundry's portfolio to over 45 fund managers. Jacqueline first fell in love with entrepreneurship while earning her JD/MBA at CU Boulder. There, she served as executive director of Startup Colorado and was a practicing attorney where she advised M&A transactions and early-stage financing. Having grown up a New England beach kid, she is the proud mother of 3 lovely children and 1 black lab. In her free time, she's a skier, golfer, and enjoys live music, especially at Red Rocks and in Telluride. I was writing this bio and I— Red Rocks is definitely on my bucket list. What is— this is like off script, but what is— what's your favorite concert that you've seen at Red Rocks?

That's a tough one. By the way, I have to correct. I have 2 children. Well, at the time that bio was written, it was— I think I said 3 children, one of whom is a black lab. But I have 2 children and now I have 2 dogs, which is when you have a 3-year-old and an 18-month-old, it's really necessary to get a puppy. So that's what we decided to do. So Red Rocks. Yeah, I'm a big live music fan. We see a lot of it, less so now that we have kids, but we used to go to a lot of festivals, all that good stuff. Red Rocks, I think, I've, at least in the US, I think is number one. I've been to the Gorge, which I think is a close second, but I think Red Rocks is cooler. One of my favorites to see at Red Rocks, which we have the privilege of doing almost annually, is the Tedeschi Trucks Band. It is a very cool combination of Susan Tedeschi and her husband Derek Trucks, who used to have their own band and then came together when they got married. And Derek Trucks, his uncle was in the Allman Brothers, so he was touring. He's like this incredible slide guitar player. He's, he's amazing. And so he started touring when he was a kid, like in high school. And then Susan is the coolest woman in the world. And if I were to, to be like, to trade places with one person in the world, I've always said I would be Susan Tedeschi because she's just so fucking cool. Oh my God, she rips on the guitar. Her voice is amazing. She's just awesome. And they put together this big band. So that's one of our favorites. And then another one of my favorite bands is My Morning Jacket. So we get to see them usually every year. During COVID obviously not. So that was really fun. We went for my 36th birthday this year with a bunch of friends. How did you enjoy it again? And then I would say, thank you. Historically, Paul Simon was really fun to see. Alabama Shakes, I kind of saw back in the day.

So that was pretty awesome. Alabama Shakes are so good.

Yeah, I probably should put my list together, but we, we go a couple times a summer and it is, it is truly a privilege to live so close to that place.

Dang. Yeah, I need to. It's been on my list. My dad listens to this podcast and he's going to laugh that I'm sharing this story, but he and a bunch of friends in college took a school bus from UNH to Red Rocks to watch the Grateful Dead play.

Awesome. UNH, New Hampshire.

Yeah, yeah, yeah. So I was born in New Hampshire. So I would love to hop into it in terms of your experience at Foundry, and I'm curious specifically to hear what that's taught you about scaling a firm both internally and then also supporting emerging managers.

Yeah. So I came into Foundry at an interesting time because Foundry, which was originally founded in 2007 by 4 people, was kind of supposed to be those 4 people forever. And, you know, in 2016 when I joined was this kind of the beginning of a transition phase for the firm where we launched a new strategy. All of a sudden there were new people around the table. My partner now, Lyndall Ekman, who joined as a partner, he had been one of their LPs and he'll hate this, but I call him like the godfather of emerging managers. Like he was really around at the, he backed USV Early and Foundry and Spark, like great funds while he was at the University of Texas Endowment and was just like really awesome at finding great managers before they were established and then helping them along the way. Um, so in any case, I came at an interesting time where a firm that was kind of not meant to continue and have new people started to do that and evolved into our strategy today, which is that we invest partially in, in seed stage fund manager. So about 25% of our capital is invested in seed funds, and then 75% of what we do is direct investing, early stage. So mostly A's, sometimes a B or a C. And today we, um, we source most of those opportunities from that pool of seed funds. So we, we view it as like this network-driven strategy and almost like a distributed firm.

Yeah.

What's interesting, sort of as like, kind of what did you learn about firms? I think there are these like tropes out there that, you know, for, from LP land that are like, you can't invest in a fund past fund 4 or whatever because it's not good anymore at that point. And that That can be true. I think that the, the, the thing that you really need to think about is like, has the firm evolved, right? And so I think Foundry's done a really excellent job of evolving, always a little bit ahead of the market as far as thinking about, okay, where do we need to go? So early on, it was the idea of being outside the Valley was very contrarian, and the concept that great companies could be built anywhere. And also this thematic investing, which was very horizontal compared to what a lot of the sector investing that was going on. And so with our model today, that evolution was really finding the next generation of great managers and like leveraging that as a sourcing and network function versus hiring a ton of associates to go find deals, right? So, and, and where do you have an edge and where do you have a relationship advantage and where does your network bring an advantage? And so, all of those things kind of culminate into where we are today. So, we, it's like we've been laying the foundation for something that we didn't necessarily know was going to happen, but this, it, like, it makes it work.

Yeah.

And it's taken the 6 years that I've been there to really get to where we are today, which is that we have these longstanding relationships with all of these fund managers. We know their portfolios deeply, we know what they're good at, and we can kind of leverage the Foundry history and brand and expertise, you know, to win the deals with the best companies, which is what we're trying to do, and then leverage our network to help them. So, I think that's one learning. I think another learning is just like being consistent around what you do and what you're good at and sort of playing to your own strengths as a manager. I see that both For Foundry. And then as we look at both seed funds that are established and on the emerging manager side, it's the same concept as founder market fit, but it's kind of GP strategy fit. And so, uh, there's lots of different ways to do this, this business. I find that folks are very obsessed with like, what's the best way to do it and who's the best at it and I should emulate them. And I think in actuality, there's many ways to be incredibly successful. I don't know what the best actually means. And that really the important thing is to figure out What are you good at and how do you tailor the firm and the strategy and the fund size and all of those things to what you as individuals and as a firm can be great at?

Yeah, we, I, I recently had on Beazer Clarkson from Sapphire on the podcast and that was like her number one recommendation to managers was don't just look at what's been successful in the past. You have to really go through the self-discovery process of being like, okay, what makes me special as an investor and how do I think about scaling that both from not only like an AUM perspective and like deals that you're doing, but also from a team perspective. Like, how do you create like a multi-generational venture firm, which I think is a really challenging problem and one that Foundry has done spectacularly well at from my perspective. So I would love to hear like on the LP side of things, can you share some best practices from across your portfolio around like possibly like LP communications, capital calls, and LPACs, like kind of like the, the like infrastructure piece of supporting fund managers? What does that look like?

Yeah. So saying from our, like, how we support managers, or thinking about the larger structure?

What would you say are like some best practices around, like, let's start with LP communications and we can move to cap call.

Yeah, so I think that one of my takeaways, I think, in venture in general over the past 6 years is that a lot of what we do as the— in the GPLP world is very similar to the founder GP relationship. And so, Mm-hmm. that, like, it's not always the right context and it's not always the right, the right analogy, but I encourage GPs to think about their experience with a founder and just think about it as one layer up. And so it, it becomes a lot, I think it becomes a lot easier to, to have good instincts and like understand what to do with LPs when you think about it that way. So it's just one level up, right? We're basically, as LPs, our job is find talent, just like a, a GP's job is to find talent, put capital behind it, and then help it scale, right? And so that's, it, it, it's very similar, but I think there are some things that are nuanced. the LPGP relationship that are different to the, to the founder-LP relationship. In particular, on the communications piece that you asked about, I think that, you know, there's, there's 2 types of LPs. There are your LPs and then there are prospective LPs. And then there's probably LPs that are never, not prospective LPs for you. So maybe there's a third category.

Yeah.

And so I think you have to just think about who your audience is in those communications. And sometimes there's overlap and sometimes there's not. I think with communicating with your actual LP base, there's Best practices, like I think a quarterly cadence at least of interaction, if not more, depending on the relationship. Um, I think that what they really wanna hear about is how is the portfolio doing? What are the companies? I mean, the companies are your shiny toys. That's what they're buying. Yeah. They're, you're just the middle person for better or worse. And so keeping them updated on the companies, what's exciting, and then the team stuff. And those are the two things that they really wanna hear about. Yeah. You know, rule of thumb, if there's going to be an article about something, you better tell your LPs first because nobody wants to find out about those things with the rest of the public. And sometimes LPs can actually be helpful in, in thinking about how to manage challenging issues. So the slightly different than the founder-GP relationship, but they're already in, right? They're already committed.

Right.

So they want it to work. And yes, they're it, like, just like as a GP, you're evaluating whether you put more money into a company, an LP is evaluating whether to re-up. However, honest, trusted relationships are really the thing that they're looking to build because for an LP, they're committing to you for a really long time. Like you are partners for 20 years, whether you like it or not. And so they, like, they want to trust you and they wanna view you as a partner. And so I think less thinking of it less as like, oh, I have to report to my LPs. It's like, I want my LPs to know what's going on in my business so that they can be helpful to me and that there's a clear understanding of like what I'm doing, what we're doing well, what's challenging, and how we're working through the challenging things. I think using your LPAC and, and doing it on like a quarterly basis or quarterly check-in with an LPAC can be great.

Mm-hmm.

Depends on who's on your LPAC. Keep 'em small at first, tell them what you need help with and kind of bring them together, I think can be great. On cap calls, I think people just need—

Oh wait, I, yeah, I wanted to like be more specific on the cap call question. So yeah, this is like something I've been thinking about as we've been shifting to like from a strict quarterly cadence to an as-needed basis where we're more heavily leveraging cap calls. So I was curious if, I think some folks that listen to this are founders or work outside of venture, so I think cap calls. Or capital calls are just like a really interesting infrastructure side of venture because I think the common conception is that as a venture capitalist, you have all the money sitting in the bank, which is not true.

Not true.

So I'd love if you could share some best practices around capital calls in general.

Sure.

Pretty cool.

It's a fun, it's a fun topic I never get asked about. So the way a lot of small funds do it is even like, especially with individual LPs, they'll call it all up front. The reason you don't wanna call it all up front is because that's not great From a time value of money perspective.

Mm-hmm.

And so that, that crushes your IRR. And so that's why we do capital calls the way we do, which is as needed. Like as you scale, then some will go to quarterly, which I totally understand because the herding cats aspect of, if you have a lot of individual LPs.

Yeah.

Like it's a pain in the ass and you can't get to them or they're on vacation and you, and you like, you need the capital when you plan to have it. Then you kind of develop further into the as needed, which is what you're talking about. And that's Again, the reason we do that is because you don't want to call the capital until you need to use it because that is, that's capital that's now being kind of measured against timing. And so I'll talk a little bit about why IRR matters, but in any case, there are these things called capital call lines that a lot of newer managers don't necessarily know about. A lot of larger funds definitely use them. And they're basically just a way to, um, it's basically you have access to debt at a bank to use for your capital calls.

Mm-hmm.

And lots of, lots of banks do this. I'm not sure how available it is to brand new managers, um, but maybe it's—

Well, I think there's, there's like some delineations usually around, like for example, at some banks they might have a minimum of a million, but you can't take out, depending on your LPA, you can't take out some, some LPs it's like 5%, some it's 15%. So if you're a fund smaller than, than like $10 million, say, it's, it's usually like challenging.

Yeah. Yeah. And if you're at that size, again, you probably have a bunch of individuals and you're gonna wanna time it out a little bit better and you just kind of eat the IRR challenge. Anyway, so what the cap call, what the capital call line does is it allows you access to capital when you need to fund an investment. Mm-hmm. Versus, hey, we have this investment, it's, it's closing. I need everybody's money now. And like, good luck with that, right? It just doesn't work. Another thing you can, and so it's all about cash planning. We have a CFO, we have an outsourced fund administrator, and so they keep the wheels turning. I'm not thinking about that as a GP, but if I was a smaller fund and newer and had less resources to have all these other folks, then I, I would be thinking a lot more about that. We do talk about like what capital calls are upcoming, and it is good to LP— to, to give LPs a heads up. They will wanna know ahead of time. So the, the most heads up you can get them is, is better. If it's a fund of funds, often they need to call capital. So that's the thing to remember is that if you have fund of funds as LPs, you know, they have their own, um, relationship with their LPs. And so it's another layer of that. And so just, I think being thoughtful to, to those processes, you should absolutely have an outsourced fund in administrator. You know, I think the smaller funds tend to use angel lists, and I've heard that that's great, but having a fund administrator that understands how things work and they can own the capital calls for you is important. And, but you have to manage them. And I think that's the thing that people generally are like, oh great, they're just gonna take care of it for me.

No.

And I've seen lots of mistakes happen. Capital calls are one thing that need to be done perfectly. That's the money. And the money needs to move appropriately in and hopefully back out. And so it's an important thing to be thinking about.

Cool. Well, thank you for sharing your perspective on that. I have one more question on the manager side, and then I'll shift a bit more to your broader perspective as an investor. I'm curious, you attend, I'm assuming, a good amount of annual meetings as Foundry is an LP in 45+ funds. So I'm curious who hosts the, maybe you don't have to say the best, but what is like one of the standout annual meetings that you've been to and why?

That's a tough one. I love all my children equally. Foundries. Foundries is the best.

Do you guys host yours in Colorado?

We do. We haven't done it in a couple years. It's like a hard answer question to answer because they haven't been in person in the longest time. I'm about to go to 3 in 2 weeks in San Francisco. I'm there for the whole week because I had 3 of— this is like a ridiculous thing, but for some reason all the annual meetings are in the same 2 weeks in the spring and the fall. They all cluster together and we have like, we've got everybody running around trying to cover them all. So somebody should create like the calendar so that people are not scheduling them at the same time. So that like, that's open source. But I would— so yeah, we used to do ours in person and then for, you know, for the past 2 years or so we've been doing it on Zoom. We will likely go back to an in-person one next year. But, and that's what I'm starting to see is that they're starting to happen this year and then into next year. They'll— and I think most will probably have to be hybrid, but there is something magical to bringing your LPs together for them to kind of I mean, this used to be like on the LP side, this used to be super fun because you would see all the other LPs and you kind of had a crew that you like that actually does invest in your ventures.

Yeah, it was a time to catch up. Festival circuit is like the annual meeting circuit. Totally, totally.

It was, it was, it was fun. It was great. So I think on annual meetings, I don't know if I can come up with like who's the best, but I think you need to think about it as like it's your opportunity to get your LPs focused on just you for the day. And you really want to show off the portfolio. You want to show that the team dynamic is working. So it's really important that it's not just one person who's like the face of the firm that presents the whole thing. If there's a next generation of your firm, feature them, show how you're getting leverage from the rest of your team and put those people in front of the group. I think it actually is valuable.

That's like kind of not necessarily like intuitive as well.

Yeah, I think for— I, yeah, I think it's like, oh, don't let the junior people talk. And I don't think that that's I, I think if you have a firm where there's going to be over time another generation that you want to get them to know, then like it's good to feature people on your team, right? And acknowledge them.

Nice.

So a lot of it, they just kind of want to see like how you're doing as a group and then which companies are most exciting. So have the founders come in and present. But I think that the— especially now that we're going back to in-person and we were used to these— I think when they started, like the first Zoom annual meetings were like, let's take this, the annual meeting, and put it on Zoom. And so you'd sit there for like 3, 4 hours and you're like, I'm like, I cannot sit in front screen anymore. This is so boring. And then over time, I think people have evolved to like, let's just do an hour because no one wants to sit on Zoom for longer than an hour. And it's like, so that's like too far on the other side. So I think as they come back to in-person, it'll be important to balance the social time and what's going on with the team and thoughts on the market, whatever the kind of more interesting stuff is, or not more interesting stuff, but that stuff. And then, okay, let's talk about the portfolio, how things are doing, and then feature the best founders. 'Cause they wanna get to, they wanna meet your founder, they wanna hang out with them, they wanna learn from them.

Mm-hmm.

They wanna hear what they're doing. And so I think striking a good balance there. you just don't have time, especially as you mature. You don't have time to talk about every single company.

Yeah.

And so you've got to focus on featuring the stuff that's working, but then also being honest about the stuff that's not working. And I think you can have a good mix there. But, um, yeah, one of the most fun ones I did, we went to New York, Resolute Ventures, and they, they happened to have a bunch of New York-based companies, so there was something local to it. And we got on a bus and— or like a whatever, like a short bus kind of thing. And we did the meeting throughout the city at companies that they were invested with. Yeah, so fun. So we had lunch at like at one, at one company, and that's where they did the actual like presentation. And then that founder came in. Then we went to go see BarkBox, which was super fun because there were like dogs everywhere, and we got to tour that. And then we like heard about— so is that— it's like very engaging. You can only do that with a small group of LPs. It's hard to move others around. And then I will say Foundry, we, um, we had our last epic one was we had a big concert, which was super fun. So there was, uh, it was a lot of serious stuff at the beginning of the day and then some fun. And I think it's, it's fun to like have fun and, and kind of build a relationship.

I like it. So have fun and then prioritize what the most important things you wanna talk about are and highlight the next generation.

Yeah. Um, and like practice and be prepared and like have the design should look good and like all of it should be Like this is your highest, like high-quality output for the people that gave you money.

Mm-hmm. I like that. So you mentioned in an article written by the National Venture Capital Association that Brad Feld introduced you to the idea of give first. Could you further explain that philosophy and how it shaped you as an investor?

Yes. And give first, I would say, is a concept that's like a, a really driving value for Foundry and our ethos. And then I would say more broadly, the startup community out here in Boulder, which is kind of where I was introduced to all of this stuff. When I moved out here like 12 years ago. So the concept of give first is akin to karma. You're showing up, you are planting lots of good seeds where you've just helped people expecting nothing back. So it's a, it's a, it's a modality for relationship building that's not transactional. So it's like the opposite of being transactional.

Mm-hmm.

Obviously we all have time constraints, we all have to prioritize things, but especially when you're younger in your career, I think it's even more important to do this. And so what you do is you just like plant a lot of good seeds. You do the right thing, you show up, you say yes to things, um, you help people expecting nothing back, but you know that like you're putting all that stuff out there and so it will come back to you. So what Brad likes to say is it's not entirely altruistic. And so like, because you know, and you can like, and I would say he's done this, like you can build an entire career and organization around that concept and it, it really does pay out in the long run. So that, that's kind of, that's kind of our philosophy. And I think we also are attracted to folks both founders and GPs that kind of live that as well. And so that's when we do reference calls, it's a thing we're looking for is like, how are these people kind of adding to their ecosystems, their communities in a way that it will come back to them? And how do they show up? And then that's really important because obviously we're looking to make the best investments. They're gonna have outsized returns that are fit for us, all of those things. But at the same time, we think about our network as our, our largest asset.

Mm-hmm.

And our network is made up of of the many founders and operators and investors that was, and, and LPs for that matter, that we've worked with over the years. And so, we also think about how folks are gonna be additive to our network. Mm-hmm. And, you know, there's a lot of people both on the direct and fund side of the house that will be very successful that aren't necessarily people that fit from that perspective. And like, aren't necessarily people we wanna bring into our community because it's very important to us. Our CEOs, for example, help each other immensely in ways that we don't even always know about. We find out about stuff after the fact, but like, I've heard people were shadowing each other's board meetings to learn how the other person runs a board meeting, right? That was, that's an organic thing. And that's, yeah, we have this email list, people ask questions and the thoughtfulness of the responses is incredible. And that's because they know that when they have a question, someone will do the same thing. Feeling we try to commit.

Cool. Well, I, I think this is a question that's personal to me since I live in San Diego and we're building out a team here. I think it's been really helpful to have a perspective, although we visit like New York, Silicon Valley, Miami, et cetera. host events in those spaces. Like, at the end of the day, we like are based in San Diego, and I find that that's a differentiator just in terms of helping us shape like organic thoughts. And I'm sure that you share similar feelings about Boulder. So I would love if you could share a bit more about your experience as an investor outside of a typical tech hub, especially since you all have been doing it for a while.

Yeah, so I think that there's, there's a couple pieces to it. I think in order to do this job outside of a— and I would say at this point Denver and Boulder is a, is a tech hub— but outside of one of the major tech hubs is you've gotta contribute to your own community so that the place that you sit on a daily basis actually is like, is part of what you do. And so I think it would be hard to do this job in a place where there's just absolutely no tech community, no startup community going on, because you kind of lose the value of the local— like, there is locality to this job in some ways, especially at the early stages. So, you know, for us, I think we— and I'll credit my partners with this, I was not around at the time— but really catalyzed the Boulder startup community, and I think Denver as an offshoot of that. And that's just, you know, talking about what you do, putting things together, showing up at things, encouraging people to be entrepreneurial, educating the community. And I think if you can do that, then it Then it kind of makes more sense to be outside of one of the bigger hubs. And then you are a big fish in a small pond. And as that pond grows, there's a lot of brand value to be kind of known as the folks that— yeah, the OG and the folks that really fed it for a long time. Right. And, and, and helped to catalyze it. So, I think there's something to that. And then I think the other piece is, especially at seed, I, and this is all changing because of hybrid and remote and distributed and all these really cool things that, that were kind of the upside things coming out of COVID I do think that there's something, as we go back to some in-person, there is something about in-person relationships and boots on the ground in certain markets. But you can't do it in a vacuum. And so I think one challenge with some of the regional funds is they're like, my region's awesome, everyone's underestimating this, I'm gonna invest just here. But they don't, and maybe you can do that. One question is like, are, is there enough density to have enough shots on goal that you get lucky with one? Because most of this is luck. And, but doing it in a vacuum where you're like, F the Bay Area, like, not— we don't need to be there. Yeah, you can't really do that because most of the follow-on capital for these companies is gonna come from places that are more mature.

Yeah.

And so, I think the best sort of regional folks that are outside of places, they are, they are a, a core node in their network. So, I'll, I'll named Natty at Matchstick, which is one of our partner funds. Natty was the managing director of the Techstars Boulder program and then spun out to start this fund with his partner Ryan, and they cover kind of 2 regions. So thing one, like covering 2 regions plus their Techstars network, it's big enough that they can focus on that.

Yeah.

And then I think thing 2 is like anybody, you know, anybody that asks me like, hey, what's going on in the Boulder startup ecosystem? I just connect them with Natty because he knows everybody and he's very much at the center of that. And so I think you can do that, but then it's also important That you have relationships with sort of the coastal investors or some of the larger firms that are in other places, because otherwise there's just not enough capital typically. So I think they've done a good job of making sure that there is enough follow-on capital and that they have the relationships with not only investors on the coast. Like, it's not just about capital, but it's also about the context. Like, are you— if you're just looking at this tiny little bubble of companies, do you have any idea what the competitive landscape looks like, what the customer landscape looks like? You have to kind of know what's going on.

Yeah.

More broadly, and then also be like, have that connectivity. So I think that you can— I think there's something magical about being outside of the noise. And so I think when I first started this job, I was like, oh, I have to be in the Bay Area, I'm gonna have to move there at some point. And then I would go a lot and come home and be like, I love it there and I have great friends there and great relationships there, but it's actually really nice to leave and to come home to my sort of quieter place where it's less noisy and where everybody I know isn't also in my industry. So you can friends that are sort of separate. And then I think there's also just like a— there's just a lack of the like hamster wheel of like, I have to be at this event, I have to be at this event, and I have to do what everybody else is doing. Yeah.

Yeah, I, I feel I resonate strongly with like that experience in the San Diego ecosystem. It's, it's been awesome to like be super involved here and then get to go to different places and like share more about what we're working on. And then also Once I'm back, I'm like, all right, I'm going to take my calls on Zoom and spend time with my family and friends. And I find that a lot of our role as investors is making decisions. And I think sometimes it can be challenging if you're like always out and about to have the, or at least I find it sometimes challenging to have the mental clarity to be like, okay, this is like setting aside this like 45 minutes to an hour to just think about this investment decision. Or like strategic decision. So you took part in the, the Kauffman Program and your superpower according to your classmates in the Kauffman Program is building— why are you laughing?

Did you like talk to people?

Maybe.

That's awesome. That's funny.

This is a question I was really curious about. So your, your husband, for context for our listeners, your husband founded and bootstrapped his own software startup, Fair Harbor, which was later acquired in 2018 by Booking.com. So I'm really curious, what was it like living like the— I feel like this is like a situation I'm familiar with and then also like some of my friends are in, in like a founder-investor household. So I'm curious, like, how did that perspective either like shift your perspective as an investor? I know that there's like some good old-fashioned like ribbings about like, oh, investors do this or whatever. So I would love to hear more about that.

Our experience is pretty unique. So actually, so the— my husband wasn't the original founder. His brothers were the 2 co-founders and he joined very early. So it's kind of on the founding team. The, like, you could do a whole nother podcast or even a book about this, but like they built the company with the family as the core team. So Anders has 3 siblings, all, all 4 of them were part of the company and their parents.

Whoa.

So it was intense, but it turned out well. So, um, so that is good. It was very stressful at times and it really consumed, you know, all of us. Even like, I wasn't technically ever working there, but it was consuming for me too. And I was Yeah, kind of in on it, and like it was in my living room for a minute, and then it was in other spaces that I found for them, even though I don't do real estate things. That sure, I wasn't. What's interesting is, so I wasn't an investor at the time that they started the company, or really kind of the first half of the company. But it's it's kind of what drove me to leave the practice of law and get wanted to be closer to building because it was it was like, and I was an M&A lawyer at the time. So I'm like, well, we're both working like a stupid amount of hours, and but but you guys are having fun, and you're building something, and you're working with fun. fun people and like, it's hard, but you, you're like, you're, you know, and I'm, yeah, doing miserable work with miserable people that I don't really like. And, and so it's not that I'm not willing to work this hard, it's just that I wanna be building something and I wanna be closer to startups and I wanna be excited about kind of what I'm part of versus kind of this like ancillary thing. And so I, um, that was one of the things that really drove me to quit. And I think it was also a time where my husband had taken a bunch of risk, but we were young enough and we didn't have kids and all that stuff.

Mm-hmm.

That he encouraged me to take risks too because I was clearly so unhappy. And so we were, I mean, he was making barely any money. I had a bunch of law school debt and he was like, just quit your job if you hate it so much. And so I think that—

You got it. That support must have been really nice though, even because I'm sure that in that position it would have, it like, I'm sure it felt like a big risk for you. So him being supportive.

Yeah, I was the one person in the extended family that had a job outside this company, right? So there was like a little, a little bit of risk management there. But I mean, that was the best decision of my life, and, and I ended up at Foundry, and sort of the rest is history. But I think that was really interesting. And then I think the other thing is that, like, having lived it, especially at the early stages, I just have a different level of founder empathy than most investors who have not themselves been founders.

Yeah.

And so, and, and I just learned a lot watching how they did it. And I, what's interesting is they didn't have VCs. So, I watched a company be built in a very different way. And I think that's, you know, always helpful to have the other perspective. Mm-hmm. But, you know, now that, now that I am a VC, it is, it is funny to think about a company that wouldn't, you know, didn't wanna take VC money in my hand. Yeah.

Yeah. So, all right, I have one last question for you. What is your advice for the next generation of venture investors?

So, you know, I, I think that there is a bit of an overglorification of venture because everyone looks at kind of like the headlines and the, the, you know, the top quartile performance and like all the stuff that is good and fun and, and Quote unquote easy about it, but it's hard. And you are not just writing checks; you are starting your own company, and you yourself are a founder and an entrepreneur. And so I think just I think that like knowing what you're getting into—that's not just the glamorous stuff—is important. I think that there is a ton of value and perspective that the next-gen folks bring to the table, but there's also there's also benefit to the apprenticeship aspect of this and the mentorship and learning from really experienced people who. you know, as you get more and more experience and further away, like, you, like, you may lose perspective that allows you to see opportunities that otherwise wouldn't be seen. But what you do have is like, I know how companies work, and I like— and so here, like, I've seen this before, and I know what to do when this hard thing happens.

Yeah.

And you can't recreate that without a bunch of experience. And I think that sometimes folks are like, I wanna start my own venture fund. And you have to think about like, Do you really want to do that before you go out and get more life experience and have just seen more? Um, so I think there's that. I think there's also just like, like there needs to be a good reason why your fund should exist and why founders, like why you will find and win deals with the best founders. So I think thinking about differentiation and how you tell your story is really important. And, you know, for the even kind of next generation, I think the absolute best way into venture, and I know it's a little, um, contradictory of my own path, but like, is go get, go get experience in startups because that is the biggest value add that you can bring to the table for firms. Yes, there are the, like, the larger and the growth firms, and you've gotta have the modeling experience and all of that stuff. But if I think about seed and early stage and what, you know, folks like us are looking for when we bring in new people is empathy for founders is huge.

Mm-hmm.

And you can really only have that if you've worked with them or been one. And the networks that you bring to the table. And so if you've been at a startup, you often meet— you have people you worked with that go out and do other things. You meet people at other startups, and then you just kind of like understand like kind of how companies work at, at different stages. And so I think that there's no better education, including like better than an MBA, is go get startup experience and bring that to the table.

Awesome. Well, Jacqueline, thank you so much for taking the time and joining me today. If you would like to connect with Jacqueline, I'll drop her link in our show notes today. But again, so appreciate your time.

Great to be here. Thank you for having me, and it's, it's great to finally meet you.

Thanks so much for tuning in today to Seed to Harvest. If you enjoyed this episode, be sure to subscribe wherever your favorite podcast listening platform is. I'll be releasing new episodes weekly, and if you have any questions or comments, feel free to let me know on Twitter. That's Paige Finn, Paige and then Finn with 3 N's. Thanks and see you again next week.