How to become a 99th percentile VC | Crossbeam Venture Partners VP, Sakib Jamal

On this week's episode of NY Seed Round, I have Sakib Jamal. He's a vice president at Crossbeam Venture Partners, which is an early-stage VC firm. I want to talk to him about his latest book, The Young VC's Handbook, one of the most comprehensive works out there dedicated entirely to helping young VC associates get more out of their career and be more helpful to startup founders that they're working with. We have an honest conversation about how VC associates can provide value to founders and how sometimes they don't. We also cover early career advice for VC associates, and we finally settle the debate of whether or not startup founders should take meetings with VC Or do we? I don't know. Cannot wait to dive deeper into with you. It's The Young VC's Handbook. So number one, before we dive into this, and really the topic of this episode is just how to help VC associates just drive a lot more value for their portfolio companies and just get ahead in their careers. But you wrote a book and it's quite a sizable book. What did that process teach you about yourself and just the overall process of writing?

Well, I did collaborate with 50 others to write the book. So, you know, I was lucky enough to not have to come up with all the content. So it is a crowdsourced book. But, you know, I would say I heavily edited and even contributed to a lot of the chapters myself. It taught me a lot in the sense that, as you probably know, VC can be an all-encompassing job. There's always something else to study. There's always someone else to talk to. There's always something to do more for your founders that you serve. So it was very much a nights and weekends project. So it taught me a lot about discipline. It taught me a lot about showing up and doing things when you thought you— when you didn't really feel like doing, when you're tired. Right. And, you know, it also taught me a lot about like just getting things done and finishing it. You know, this took a long time. It took like a year and a half and it definitely followed the Pareto principle, right? Like 80% of the work was done in 20% of the time. So it did show me a lot about like, you know, once you decide to do something and have a game plan, you can get it done. So initial feedback has been positive so far.

Yeah, we're going to dive deeper into it. I really enjoyed it. Somebody who's not even a VC, see, it sort of provided a lens and provides more empathy for somebody that's in that position and the challenges that they're facing.

Yeah.

It's pretty funny to me though that you took the break. I know Stephen King's On Writing biographies, he talks about that. You get your first manuscript done and you put it in the desk and disappear for 4 weeks. Like, don't look at it at all because it sort of puts you in a different point of view. For somebody who is interested in writing a book, do you have one piece of advice for them?

It's very important to have your— to be genuine to yourself and to have your own voice because it's very easy to regurgitate what other people say and like put the same thing and give it a different flavor. I think, you know, the book— I started writing the book when I was an associate myself. Mm-hmm. And I had a lot of insight and empathy towards the job and firsthand experience towards, you know, what— you know, I saw some peers that were very highly regarded and were very good at their job and some that were, Not that they weren't bad at it, it was just not a priority. And it was very clear, right? Right. Like the people who did not be the people who lived and breathed it, really immersed themselves in the job and the people for them who, for it was just a job, right? Which is okay. But you could see the difference. And so I guess the one advice/thought I'd share is make sure it's a truly unique insight because it's something you're putting out to the world. Would it, would it not be nice to, to make sure that it's actually new and novel and not just, you know, version 32 of XYZ concept that's been talked about a lot?

That's an interesting insight. I had Phil Rosen on the podcast a few weeks ago, and he's, you know, Business Insider reporter, now runs Opening Bell Daily. And what's special about him is he's dedicated 10,000 hours to the art of writing. And one thing he said is like, if you're a beginner, I guess it applies to reporters, but it could apply here as well. If you're a beginner, don't worry about sucking in the beginning. It's going to get better. Do you agree with that?

100%. And by the way, I would say my business writing and my personal writing is very different. I have a personal blog that I haven't really written much recently, but I used to write a lot, and a lot of the stuff I write never gets published publicly. But, you know, it's definitely a skill set just like anything else. You know, people talk about ChatGPT, et cetera. Yeah, yeah. But I think, you know, you still have your own style and you're still able to, within your own style, you're still able to tweak different things. Like I write, when I'm writing a blog post for, on a Crossbeam blog, that's different versus when I'm writing for my own Medium blog where I share my, you know, lessons learned. Every birthday, for example, I kind of try and sit down and reflect the things I've learned or what I'm grateful for. Right. And I had a mentor who sadly passed away, who's my hero. His name is Fahim Saleh. He was actually a pioneer, one of the pioneers of New York tech. And he— when he passed away, I wrote a memoir, a tribute to him. That was— all of that was just a way to express myself. And, you know, it's just such a great feeling. It's almost therapeutic, right? To be able to just get it off your chest and onto a paper or screen, whatever you're typing. Yeah. Yeah, I totally agree that, you know, it doesn't always have to be— I guess the point I'm trying to get at is it doesn't always have to be like business writing, a blog post, et cetera, but it's like finding your unique voice. how to make something engaging. And obviously reading helps, like studying other people's work.

That makes sense. So let's dive into it. I made quite a few notes because again, it was a great read. So in the day 2 section or sort of chapter 2 section, the theme there is prioritization for VC associates. My first question for you is, what do you feel having been in that position and spoken to people that are As well. What are the biggest time consumers that perhaps don't drive as much value for a VC associate to be doing? Where can you get trapped?

Yeah, I think there's a tremendous amount of ambition for people in the industry, and it self-selects for that, right? Because there's a lot of people who want these roles, but very few seats, especially in this market, as things are contracting a lot. And so what happens is you put a bunch of these ambitious people in these seats, and everyone wants to, quote unquote, build their book. Yeah. Everyone wants to do deals and, like, you know, become the, you know, become the person who's the, you know, who led and brought the deal for the firm. But the problem with that is you can end up doing a lot of— the path to that is almost never linear. And so you can end up doing a lot of— you can end up taking a lot of calls. You can end up showing up to a lot of happy hours. You can end up talking to a lot of people that may not be as useful. I think your first 6 months, I think it's pretty useful to do that because you're still building your pattern matching. What's something that we say at Crossbeam is you have to see a lot of A-minuses and even A's to really see the A-pluses.

Right.

And so that helps. But I think over time, that FOMO, Oh my God, if I like don't take this call or if I don't dive deep here, like maybe, you know, I'll miss out on the next big company is probably not— it's probably not the most useful way to spend your time. I think just getting comfortable with, you know, you may miss a good deal or even a great deal, but there are other great deals. And having that feeling of abundance is very important.

So I'm hearing that one— and part of the Sort of some of the points made in the book is there are opportunities to network and build your network. But I think what I'm hearing here is like one of the biggest time sucks can be doing too much of the go to a happy hour and meet people instead of just sitting and thinking through like, what are my next steps?

Yes, I think it's very easy to be very bogged down on the top of funnel, like finding the deal and taking that first call and almost that SDR mentality. It's like, you know, you're going to email, you're outbound, you do that. But I think people tend to forget that once you get there, you have to pick well, you have to do your DD well, and then you also have to figure out how you're going to win that deal.

Right.

And so those are skill sets that are very important. So you can be very good at your top of funnel, but if you can't convert, then it's hard. It's hard to scale and get promoted and become more senior in the job because As you get older, you're expected to own the entire process end to end.

That makes sense. One piece that's highlighted several times in terms of prioritization, high value add, is data. There's a lot of data gaps in this ecosystem. And one thing that's brought up quite a bit is making market maps. What are your general sentiments around where there are opportunities for VC associates to contribute more data that's helpful and unique?

Yeah, I think there's a lot of data that's quote unquote unstructured, right? Like the examples I can think of is what is the ideal length of a pitch deck? Yeah. Like how many, sometimes I get pitch decks that are 60 pages and you're supposed to flip through them and there's sometimes there's like 10 pages, but there's a lot of text and it's almost like you can tell the founder was an ex-banker or consultant or whatever. And that, That could be a great— I think a lot of people have that in their heads. I kind of have an idea of what I sort of work when I'm working with a founder in the portfolio and they're raising, call it, an A or a seed if you did the pre-seed. It's like I have an idea, but there has to be a better— there has to be a data-driven way to do that. And that's just one small example. Financial models, whether it's On the product side, I think there's a lot of different things that you can study. And the good part is it's not obvious.

Right.

Right? And that can be your edge, right? Once you figure out what that is and you create, call it whether it's a database, you create some sort of knowledge book or whatever that you share with your founders, that can become your edge. I think that's a very, very broad opportunity, and it's up there for the taking.

That makes sense. Okay, and then, okay, we're moving on through the book. Day 4, it talks about personal brand. Make the case for why a VC associate who maybe has maybe 20, 30 followers or a couple hundred on Twitter or LinkedIn should invest the time to build that. Hey, before we get to their answer, I want to take a quick second to just thank everybody that's been a part of the NYC Round journey so far. If you've enjoyed these conversations we've been having with investors and founders, like, subscribe, and comment down below. Now back to the conversation.

I think I'll give the caveat that there's multiple ways to win. Benchmark's one of the best firms in the world. They have just a website with a landing page, nothing else. And then there's like, on the other hand, you have a16z who have done a fantastic job with their PR and marketing and building that brand. So do you have to, you know, do the content way? Like, it's a personal decision. I think, you know, net-net, it does help. And so again, going back to— you asked, you know, any thoughts or suggestions. I would say again, just going back to like what you know really well and staying true to yourself. Like, for example, when I wanted to— when I first joined, I was like, what should I blog about?

Yeah.

Right? And I started blogging about you know, SaaS metrics and blah, blah, blah. And once my partner Ali, the founder of the firm, like kind of pulled me aside and was like, hey, you know, it's great that you're writing about this, all this stuff, but like you're probably not going to be the leading expert or you're probably not going to say anything vastly new about or unique about, you know, SaaS metrics. Yeah. Why don't you blog what it's like to be a VC associate? Why don't you blog about, you know, how you figured, you know, you're decent at your job? You know, how do you, How do you take that first call? Or how do you manage your time? I was like, huh. And so I started blogging about what it was like for me to pass on a company that I really wanted to do, but then there was really good data where I was emotionally attached to the founder, but there was really good data as to why I shouldn't do the deal. Right. So I blogged about that. And over time that became the book, which was, hey, there's so many things, there's so many small things that someone who's entering You know, that's why it's the Young VC's Handbook. Right. It's not just the associate's handbook. It's like anyone who's new to the industry, you know, starts appreciating the small nuances about the job. And so the book was designed in a way where, you know, people who had experience in that particular area of the job could share their knowledge. And, you know, there's a, you know, my friend Jesse Bloom wrote a fantastic section about CRMs. My friend Chelsea Zhang, who used to be a consultant before, wrote a really big, very detailed section about market sizing and how you do that well. And so the idea was to get these people together and really demystify what the job is and how it works day to day.

Yeah, it's like decades of tips, but also mistakes that were made. It's a helpful tool for folks. It's a cheat code. I'm not even a VC, and I could, like, see that. One thing that I heard in there, in terms of finding things to write about, I love the idea of, like, chapter— making chapters out of your day. Like, think back, what were 5 things that I did today? What were 5 decisions that I made today? And how can I write for folks that aren't yet at my stage and write, how did I think through those things? You mentioned, like, why did I pass on a certain founder? That by itself is a post, potentially. So I think that's pretty insightful for others. Yeah.

Yeah, it's a lot of those things that are pretty useful and important, but no one's taken the time to actually put it on paper because it was like, oh, you learn about it over time. But well, maybe you don't, right? And maybe you should know that day one. Yeah. And all this talk about it on Twitter, like whether founders should talk to associates or not, maybe a lot of those mistakes and the bad experiences that founders and VCs actually on the other side have had where Founders could be disrespectful to associates. I've had that happen to me, right? Could be kind of avoided if you, you know, if both sides are better prepared or, you know, I don't know about the founder side. I'm not a founder. So I, you know, I'm on this side of the table. So I'm like, how can we equip people on this side of the table so that they can do their bit in providing a better experience in a meeting?

That makes sense. In that chapter, I want to share a quote that I wrote down from the book. It was on diligence. It's, quote, as a general matter, I try to analyze growth rates, margin, capital Capital efficiency, unit economics. This is when evaluating a startup. TAM, competitive differentiation, strength of the team. Is it worth taking to the next level? My question I had as I was reading that, though, is, like, at some point, isn't everyone looking at those metrics? Like, when does that become less helpful?

Yeah.

You know, what are your thoughts?

Yeah, yeah. Well, 2 things. I think in early-stage investing, not everyone is actually looking at it, which is the crazy part. Yeah. You'd be surprised how— and again, people have different styles. Some people, like, really spend a lot of time on, hey, is this a good idea, good market, and, you know, how's the founder? And that's all they do. And then there's a lot of, like, you know, the ex-banker, ex-credit types, i.e., myself. Like, you know, we spend a lot of time, like, thinking through, okay, can we actually make this work on a spreadsheet, or does it— do the numbers sort of add up generally? And I think internally at Crossbeam, we say there's an East Coast style of investing and a West Coast style of investing. And I think you have to kind of— at least I try to merge the best of both worlds. And I very clearly know which way I am self-aware enough to know which way I lean. I think to answer your question, look, yes, let's say everyone is doing it. Even then, I think there are certain things where those things can have context. So let me give you an example. Let's say you do the work and you realize that sales cycles are really long. Well, then you kind of have to start thinking about, as VCs, our job is to figure out what can work, not what can't work. Yeah. And so we were like, okay, does the founder, do we believe that this founder has the charisma or the know-how Was she a sales leader in the past, for example? Maybe this is very early and maybe she has the playbook and maybe she can bring that sales cycle down from 6 months to 2 months. Right. And all of a sudden, what does the revenue build on your spreadsheet start looking like then if you can bring that lead time down? So I think doing those work in context of the more West Coast, more like background or contextual stuff is helpful.

So if I were to sort of add on a question there, what tips or hacks have you seen work in your own sort of career so far to drive outsized sort of performance, given everybody seems to be looking at the same dataset?

Yeah, this might be a bit of a boring answer, but I think a lot of it is just The beauty of private markets investing is it's not— it's the opposite of public markets investing, whereas information is not everywhere.

Yeah.

And so it's like, can you find the right information? And can you call that industry expert in your network and get that differentiation insight that maybe even the founder didn't have? Right. That's happened to us in the past, where we've spoken to someone, and the founder was like, oh my God, that's such a great idea. And we were like, yes. We ended up speaking to someone, and then they came in with us in the round as an angel and an advisor. So a lot of it is that, is like finding, you know, the answer is there somewhere. Right. And you kind of like have to get creative about, you know, whether it's asking the right person, going on the Reddit forum, or wherever it is, the answer is there. So you figure that out. And the other part of it is like references, like, you know, calling people who have worked with the founder in the past, et cetera. That gives you like, you know, other, It gives you a lot of confidence. There's— it's table stakes to do references. But for example, if you can do references on the other executive members of the team, everyone focuses on the founder, but like, you know, sometimes the bench strength matters because in 3, 4 years that bench strength becomes the executive team and they run 20, 30, 50%, 100% teams. Right. So what, you know, how do you evaluate that? So I, you know, obviously you have to be respectful of a founder's time. You have to be respectful of the, cognizant of the process, because hot deals get very, very hot and you don't have as much time. But I think doing the work and gaining conviction is not only— not only is it a hack to win deals and do deals, et cetera, it also pays dividends after investing. Let me give you an example. When we invested in this company and it was us and 2 other firms, And we were like the smallest investors out of the 3. But when it came to like doing reference calls or doing— when they were raising a Series A, the founder asked us to do almost all the references. And it turned out that we knew the company so well that he had gained confidence that we would be able to give them the best reference, because we are— we had done so much work. Yeah. And we had so much conviction in the business, and we could present it the best way. So yeah, I think just the reality is you just got to pay your dues. You got to do the work. And I think that's a great way to not only earn your conviction, but earn the respect of the founder. And that all compounds over time, hopefully.

Right. So for folks that may not know, can you tell us a little bit more about Crossbeam Ventures and your journey to Becoming a member of that VC firm?

Yeah. So Crossbeam, we're a pre-seed seed fund. We write $500K to $3 million checks. I'll spare you the VC marketing spiel, but we like to think we have a different point of view of the world. There are certain spaces that we spend time on and get to know, and that those spaces change over time.

What are some of the recent areas?

Yeah, we've been spending a lot of time in the housing market, for example. Like, the housing shortage in the US is one of the big crises of our time. And we haven't done a lot in the space yet because proptech is hard, and it's hard to scale venture-like growth, et cetera. But it's one area that we think venture capital or risk capital should look at and spend time on because it's so important. It's so non-discretionary. Right. So that could be one example. And then there's other areas that we spend a lot of time on. It's like, hey, the US population is aging. There's supposed to be a massive intergenerational wealth transfer. What does it look like when these people— first of all, is it easy to make that transfer? Probably not. So we have made a couple of investments along that theme of like, hey, how does this generation pass it on? Do they end up spending a lot of it? Like, we've, you know, there's a couple of themes that way. Passing on businesses, for example, we have a company that does that. And then on the flip side, it's like, what happens when younger people have more money, right? Like, what does that sort of on that macro level look like?

Very like 10, 15 years in the future.

Yes, exactly. And so what are the things that are enabling some of that to either be pulled forward or, you know, what are the trends that, you know, you can sort of ride? So we think a lot about a lot of that. And there's a couple of things that sort of make us unique. We have an affiliate called CoVenture. They do all sorts of asset-backed lending and all sorts of credit products. So it gives us an edge. So even at a vertical SaaS, for example, if they want to do an embedded lending product, we can help them think through that, right? Got it. And that's pretty unique, I would say, among others. Then we have a team of really impressive folks. Like we have Michael Ovitz, who's the founder of CAA. And that's been awesome just to be able to learn from him. And he works incredibly hard and he has a pretty awesome network. And all these people that we used to look up to, I'm sitting on a Zoom call with them. That's been awesome. Yeah. And yeah, it's also been eye-opening in many ways, right? It's crazy how hard some of the You look at some of these people and you think, oh, they're geniuses or they're smart and it all just came to them. No, they work hard. I receive emails at 2, 3 AM from these type of people.

If a founder is evaluating, they have their list and they're evaluating Crossbeam, what's the short answer on, is Crossbeam the right firm for us to pitch our startup to?

Yeah, thanks for asking. That's a tee-up. I think 2 things. One thing I would say is we never overpromise, but I would still say, like, if you ask our founders, I would say we are often the most responsive. Yeah. We are all like, we all love this game. Like, we are all in it for the love of the game. And I think that goes a long way. Like, I think if I were to give you my personal examples, I've helped a founder find a divorce attorney when he was going through that. Or I helped one founder who was stressing about apartments. So I literally set aside half a day just to look for apartments so that he could—

Those are the unscalable things.

Yeah, he doesn't— Hopefully. Those are the unscalable things, right? But it just goes to show that we truly care. And I would say the other part of it is we're always there for the big things. I think that's, if I were to sum it up, I think for a founder to work with us, whatever it is, if they think it's big or if they're clear to us that this is something that's important to them, whether it's personal, whether it's professional, et cetera, we're always there for them. And I think you talked about scalability and that's super important, right? Because we are very cognizant that me doing finding apartments for founders is probably— Yeah. not the most scalable thing. But at the same time, we are cognizant that we are in this because of our founders. Right. And so we take that service mentality. We will stay up that— if spending an hour on apartment searching means I have to stay back an hour at the office to get other stuff done, we will do that. That's a trade that we'll hit the bed on every day. So So I would say, I would say that's really the answer, that we are there for the big things. And, you know, we don't overpromise like, you know, that we're going to solve every single problem. But whenever it's a big issue, we're there for them.

I gotcha. So if you're a founder raising money and you need a wedding planner, call this guy.

It's funny. It's funny because my— I have a really close friend. My sister-in-law is actually a wedding planner. So if they do, they can actually reach out to me.

That's awesome. Okay, all right. I also wrote down this quote, and I'll talk about why this was so meaningful to me, but the quote is something pretty straightforward, but it's, quote, I talk to my Uber drivers to learn more about the inefficiencies in their jobs and other industries. Yeah. I keep a small notebook writing down ideas and frustrations I overhear from people on trains, planes, and cafes. This is one of my favorite quotes from the book, one of the essays there. I reject the idea that you have to write a Paul Graham essay every piece of content that you publish. And I think this is a good example of a practice that may seem obvious to many but actually isn't.

No.

And it's something that could be such a useful practice for so many. Do you have any similar tips or hacks that you found successful that you may think are obvious but aren't really, or maybe somebody listening to this as a VC associate could start to implement today?

You know, it's interesting. I mean, you can't give away too many secrets, but there are certain things that are table stakes. Yeah. Well, one thing, you know, a lot of people are doing a lot of stuff with LinkedIn. There's a lot of scraping you can do. You can check if someone's connecting to someone that's technically public data.

Right.

And you can scrape that and find that a lot of firms do. We don't. Yeah. You know, First of all, it takes effort and takes a product to build. And 2, we don't know if that would be the best way to go forward. But I do know of firms that do that. I guess without giving away too much, I would say the principle to use is you just have to look where others aren't looking. And you have to look where— and you have to evaluate whether You can find that outlier founder or that outlier idea by looking at where others aren't looking, whether it's—

Where's an example? Where are a couple examples where people commonly look?

So common would be just referrals or showing up to a happy hour, et cetera. But what I mean by that is, have you ever gone to YouTube and searched about a certain trend? Have you ever, you know, have you ever, like, you know, if there's certain blogs or forums or like Hacker News, etc., like, have you ever, like, tried to scrape that and see if certain people are talking about certain keywords, right? It all takes time, effort, and investment. Like, most people who have the idea actually don't do it. Yeah. And so, you know, I think a lot of people, I think similar to you, When in the previous question you were like, aren't people all doing this? It's like, it's a good idea, but not a lot of people are doing it. And so I would say those are some examples, like, you know, whether it's online, whether it's offline. You know, I recently learned like there is a town, I think it's Fargo in North Dakota, that's an emerging tech hub. And, you know, I don't know if there's a big company out there. Like we have one of our—

Fargo?

Fargo, I think.

Fargo, yeah.

Yeah. You know, one of our biggest companies that I'm personally very bullish on, you know, I can't name companies, I'm not going to do that because I don't want to be cherry-picking here. But they're based out of a small city in the Midwest. And I truly think that they can be a $10 billion outcome. Right. And so, you know, that's an example.

So that could potentially be markets. It could mean like looking or sourcing deals in a different way. Talking to different people.

are talking about different— thinking about ideas that other people aren't thinking about, identifying trends before others, or even identifying the same trends, but playing it differently or bringing a different perspective to it. That makes

sense.

That could be massive.

And then another chapter in the book talks about sort of faux pas that young VCs can potentially fall into, and one of them is ghosting founders because founders talk to other founders. What are some other big mistakes that folks that are early in their VC career should avoid?

I think it's very awkward at first because it's not natural, but being straightforward with founders, getting to a quick no, or even on the call just being like, hey, here are the problems that I see, by the way, Can we talk about that? I think a lot of times VCs will make a judgment and not even give an opportunity for the founder to counteract that and ask that question.

Just because they may have pressure or they have thousands of pitches that they're seeing?

Exactly. Exactly. It's like, oh, it's not even worth— I made that call, I made that judgment, and that's it. It's not even worth digging in. But I think just taking that extra couple of minutes to just dig in or even on the call be like, hey, by the way, Here, here, you know, this was a great call. Here are my 2 concerns, this and that. You know, what are your thoughts? Like, am I missing something? And coming in with the humility that, hey, I may not be— by the way, a founder is spending their life, life's work on that, having that respect for them. And like, you know, making sure that, you know, just having that humility and just understanding that you may not have captured all the nuances within a 15, 20, 30-minute meeting and making sure to ask them like, hey, you know, I am— my hunch is this is the issue. Am I wrong? And, you know, 9 out of 10 times what they say will not be— will probably not convince you because, you know—

I like that question. I think it's a useful question because sort of founders are pitching thousands of times. They probably rehearse the common questions. But what am I missing could depend on your audience.

Yes. And it's not just whatever. It's like you made a judgment and you're not direct with the founder. Yeah. Tell them, by the way, here's what I think. And do you agree with me or not? And obviously they will not agree because they're here to pitch. But you want to hear the way they think. And I think sometimes the way they think can make all the difference in the world.

So that's hard, but it's hard to like— there's a human psychology point to it too. It's hard to like reject others. Like, what's a— what advice do you have for others to get to that quick? Now, let's say like, I really want to interrupt this founder. It's not going anywhere. I could see that I'm not going to make the investment, but I, you know, out of kindness, I want to wait until the end of the call.

Well, I'm not— I'm not saying like, you know, you're rude or anything, but you have an honest, direct conversation. I, you know, I can show you emails and actual notes, et cetera, from founders that we have passed on. They've either sent us deals later or they sent me a note like, hey, I had a good experience. Thanks so much. That was very helpful. Or they've come back 6 months later de-risking that part that we had pointed out and we end up doing the deal or not, or someone else did the deal, but then they mentioned it to us. So you can have a— all I'm trying to say is you should have the conversation. Yeah. You have to be direct. And I think people will respect you more for that. But it's awkward. It's very, very weird because, you know, a lot of founders are— they're very high conviction, and it's awkward to say, I don't really think you're—

I mean, they feel it's their life's work.

Yeah, exactly, exactly. And but you've got to have that respect. I'm not saying be disrespectful, but just be direct. That's one. You asked about common mistakes

that could hurt your reputation, and you may not even know it.

Yeah, yeah. Gossiping a lot. Like, this industry is very, very full of gossip, and it's part of the job. Like, the references is part of the job. But like, being seen as someone who is not trustworthy can be really hurtful. And, you know, that's one. And then admitting your mistakes. I think a lot of time there's avoidance. Like, hey, you make a mistake. Like, for example, I missed an email from a founder, NYC-based founder, fantastic guy, really enjoyed him. I missed an email and he was pretty upset and he sent me a follow-up going like, hey dude, what's going on? Yeah. And I felt terrible that I gave him a— this was before I had the book, but I bought him my favorite book and I made a note on it and I mailed it to him. And I'm like, hey, please accept my apology. That was very— I I spent— you sent me 2 emails and I missed both. I don't know how that happened, but I'm sincerely sorry about it. I think a lot of people, you know, me included in the past, would have probably just been like, ah, you know, water under the bridge, call it a day.

But that adds— that can compound. Yeah.

And by the way, that founder reached out to me 2 weeks ago, you know, asking for coffee. And we just had like, you know, we talked about his business. We, you know, we jammed on other ideas and I consider him a friend now, right? Makes sense. Did I manage to piss him off? Yeah, but I tried to do right. And what else? Co-investor etiquette is another one.

Oh, interesting.

Tell me more. If you're dealing with another VC and either you promise them something and you're not able to keep that promise, or you're being cagey, which is fine because People have different strategies. It's a competitive scenario, but just being upfront, being like, hey, I'm sorry, I can't do this. But that awkward back and forth is often pretty annoying, I would say, is the right word.

I've also found listening to founder panels, they talk about the fundraising process. It strikes me that there are a few questions that are commonly brought up that sort of frustrate founders a little bit.

Oh, by the way, that's the other one. Like, for example, let me tell you, like, I have this, it just comes up to mind. So I look at a lot of marketplace businesses, and a common question that comes up is disintermediation. Like, why would they go through your platform after the first time? Why would they not just bypass you? And so every time I ask that question, I'm like, you know, I'm like, hey, I'm sorry, I know you probably get this a lot, But I personally am not very sure why they won't bypass you. And sometimes they have a great reason. They're like, oh, we have the certification, or we have a security clearance, or we have whatever it is, right? Or like, it's so high volume that it's not worth, they're not just using one person, they're using 30 other people. So it's not worth for them to deplatform.

Right.

Whatever it is. I think those are probably the ones that come to mind. There's a lot more, but I won't bore you with them. There's stuff like a lot of people spending too much time on models. On that

note, actually, so pre-seed, seed stage investing, there are some founders that sort of bristle at, do you have forecasts for 12, 18 months from now?

I am a— You

probably heard, you've heard this.

Yeah, yeah, 100%. I am a big believer in showing at least a normal revenue build.

Okay.

Because I want to see how a business, what the drivers of a business are. And the way I learn personally is I like to see on Excel, like, okay, this many people, this is how, this is the pricing, this is what you can flex, this is how you get to a certain amount. And often I want to see also on the cost side, like for example, sometimes a founder would assume 3 salespeople can get you $20 million of revenue. And by the way, maybe it works. Maybe the ACVs are so high and the upsell makes so much sense that maybe it's possible. But most of the time, that's probably not reasonable. Yeah. But that's how they're forecasting, and that's how they're forecasting their cash needs. So I personally am a believer I think that you should have a realistic picture of how you're going to scale the business, what the main drivers are. And by the way, those— the amounts might be wrong, but the drivers themselves don't change. Yeah. So I personally am a fan. And by the way, I tell founders, like, why— whenever we ask for anything that I'm cognizant has a heavy lift on behalf of the founder, complex questions and they have to type it out or hop on a call. I always try to give them the logic as to why we're asking for that. And again, just going back to the directness part, and founders really appreciate that. Like, yes, it's annoying. Would they rather not do it and build their business 100%? But, you know, if they're fundraising and, you know, they're asking us to be partners, you know, buy into their business, be equity holders, then yes, like, you know, those are things that I personally Makes

out a

bit.

One perhaps underrated sort of topic when it comes to being a VC associate is how you pick which firm you want to go work for. And there was one essay that talked about just the diversity of the different VC firms, from thesis to how long their deal cycles are, how many deals they pick. What are some basic tenets on how VC associates— what can guide them to pick the right firm for them? Yeah. Because I wrote down here, like, There's a quote here. Some generalist firms like volume-based sourcing, they want to see every deal out there. Other firms are very thesis-specific, 3 to 6 months research into a particular thesis, culminating in identifying 3 to 5 potential investments. So how can aspiring VCs evaluate which is best for them?

I think we have to acknowledge that most people don't have that opportunity to pick between multiple Oh, interesting.

Okay. Just because it's so hard to get a job there?

Not just it's hard, not because they're not good enough, it's just it's not like private equity or banking where you have every year a certain amount of people churn and a certain amount of seats open up and there's 100 seats and there's a playbook and you go recruit. VC is a lot more like depending on the funding cycles, depending on which areas are hot and where the hiring needs are, right? It's not as— and, you know, people don't just— you know, junior people churn, but at the senior level, they don't churn as much, right? Like, the GPs often remain GPs of a firm until they retire. Yeah. So that doesn't open up as much. So just structurally, it's harder. But let's say you are looking to recruit and you're deciding where to spend your effort. I think that's part of the question too. Yeah. I would say a lot of it depends on, you know, quote unquote, who you want to be and where your values align. Like, for example, I have a friend who's very, very passionate about mental health. And there's a firm called Grey Matter. Dhanesh is a great friend of mine who's the GP there. And they exclusively focus on mental health. Mm-hmm. And they'll make investments that are in and around adjacent to mental health as a category. So I have a friend who really wants to work for that firm and thinks that's the greatest thesis ever. That's super cool. And then I have a friend who doesn't want any constraints. They want to be— they want to go to a shop where they have full freedom to find the coolest ideas, to find the best founders, and then work with them and, you know, be very successful at that. And then we have friends who, you know, care a lot about comp and cash comp and, like, you know, want to work for the big brand, etc. Like, it depends, but by and large, Justin, the reality is You probably don't have, you know, 7 different options.

Just get in where you can.

Get in where you can, slowly, be patient, work through when that spot opens up.

Okay. Well, there's one thing in your response I wanted to double-click on. You mentioned that there's a lot of churn when it comes to the VC associates. I have a basic question. How is performance evaluated for VC associates? Because typical exit's going to be 7, 10 years, but they probably Yeah. Probably not with the firm anymore.

Yeah. You're touching on a big, big issue with firms right now, and I notice it as I'm getting older in this industry. There's a big bit of a principal-agent problem where the juniors, they want to do a lot of deals, and that's how they value themselves, and they want to source more deals. And then, so they're pushing for deals that perhaps aren't that great, right? But they're trying to build their book. And then GPs have to like, you know, there's this whole tension. How junior VCs or associates are evaluated really differs from firm to firm. I can share how we do it at Crossbeam. I think there's certain— we look for certain things that are important. I think obviously the fluffy stuff like the attitude, et cetera, but there's also stuff like, you know, are you reliable? Like if we are sprinting at a deal and we're looking to do DD, are you Are you able to jump in quick, learn very quickly, and have an informed view? Are you willing to take risk? Are you doing what you— it doesn't have to be, again, it doesn't have to be content or happy hours or whatever, but are you doing your— are you building your own network? Are you building your own way to scope out founders? Or like, are you able to build trust with founders? Right. So there's a whole list of things that we look for. And it's a rubric that at the end of the year, at our 6-month or 12-month reviews, we sit down with our junior professionals and we'll go through them.

Yeah, it's like the first-year assessment. What do you even talk about? Even if you've made 2 investments, it's still too early for any returns.

Yeah. And again, like I said, some firms, they're massive, they have a lot of AUM, and they care a lot about deployment. And for them, it's like, have you done 20 calls a week with founders, right?

Oh, okay. All right.

Like, have you hit your quotas? And by the way, how many of those quotas are high quality, right? And then for us, you know, for like these smaller sort of artisanal firms, it's like, hey, like, how many founders would give you a good reference? Or like, what do you think your strengths are? Like, what have— do you know a lot about a particular sector? When, you know, if you say you know a lot about a sector and, you know, you want to like do a deal, like when we go reference check it, et cetera, are you missing something very obvious on your due diligence? Yeah. So you're right, it can be vague. Yeah. And it often is. But I think the firms that care a lot about their junior people growing into senior roles in the future, they do care about making sure that the juniors know what they have to do, what they look for.

Got it.

And sometimes, Justin, I'll be honest.

Yeah.

You just have it. You know it when someone has it.

Yeah.

Like, I will meet a young person at Insight, and I just know, like, she's going to— she's amazing. Like, she's very smart, very personable. I trust her. I would work with her if I could, right? Like, you just know it. That makes sense. You see the way they carry themselves. You see the blog posts they're putting out, you see them in action, maybe in a happy hour in a circle, and you see the questions they're asking these new founders who come into the circle, you kind of get it. That X factor is really what matters.

That makes sense. Okay. And this is very highly tied into several chapters in this book. Let's pretend I'm a startup founder, and my opinion is I think meeting with VC associates is a waste of time. What's your reaction?

I think in reality, it is hard for a new person, a new associate, to come in and provide a really good experience for a founder. I will admit that. And that's one of the reasons I worked on this book, is I was like, hey, we're running in the dark here, because it's an apprenticeship model. It's not like banking consulting. You join the job, you take 2 months to just train people, and you bring in the best— you know, Wall Street prep or whatever, these, like, experts to come teach your young bankers, et cetera. That doesn't happen in VC. In VC, it's apprenticeship model. You watch your partners, you go, you know, you go out in the wild, you go figure it out.

It's a lot of self-discovery.

You go figure it out, right? And that's, you know, one of the reasons the book, you know, I worked on the book is because I wanted, you know, my friends to— my friends and I to, like, be able to share the best practices that we learned the hard way. from working this job. So the TLDR is, yes, I do think founders should take the call because that's how firms scale. Yes, would it be ideal that you have a partner who's very excited about you, et cetera? But at the end of the day, a lot of the times they will outsource diligence to the associate, or they won't have as much time, and it turns out that the associate knows your company way better. Yeah. Or it turns out, like, you know, if the associate is respected internally, they can still be the deal champion that, you know, the partner, you know, does it carry as much weight as a partner? No, but they can still be the deal champion who, like, gets the deal through.

It just strikes me as a topic that, like, nobody's going to be persuaded either way. Like, some are like, you know, you want to increase your surface area of success and you do that by taking the meetings. The others are like, no, literally that minute you spent meeting is a minute you weren't doing something else higher impact.

Yeah, a bit of a crapshoot, right? You can get a really shitty associate who's— like I said, I remember at the beginning of the conversation, I was kind of telling you, there's the ones that you know for them it's just a job. It's like a stepping stone. They want to go to business school, whatever. I don't know. And then there are for some— I really cared. I can only speak for myself, and I can speak for a lot of the— I think almost every single co-author that I had in this book. Yeah. They all care. They're like students of the art. They care about the founders they talk to. I

mean, they're putting their words out there. They're putting their opinions out there.

They're putting— yeah, and they put the work in. And as a founder, I think you can't really ask for more. You ask for someone who cares about the business, gives you your due respect, and if it's not a fit, they let you know early. And they either tell you in detail or give you a BS answer as to why they're passing. And that's all you can ask for.

That makes sense.

You know, if also like, let's be also real, like I think a lot of those founders who are saying that, they're coming from an area of privilege because not a lot of founders have that network that they know partners everywhere. Like if you do, good for you, but you have to go through the gatekeepers and, you know, their associates. And

that's a big problem here in And the NYC tech ecosystem. There are a lot of really great founders that are building great companies. They're doing the hard stuff, but they maybe don't have the relationship.

If you're raising external money and not funding it yourself, that's the crapshoot you have to unfortunately go through. Like, if I were to start a company, I would have to raise money from this, right? I'm an immigrant, right? So like, I would have to— like, if I said no, I would only talk to partners, like, I was like, ah, you know, then I have 5 people I can talk to, you know what I mean? Yeah.

We, uh, and we had talked about this We've talked about this previously in our previous discussions, but the concept of content marketing, and you hinted at this earlier, like writing blog posts, like you got advice from one of your partners about how to sort of shift a little bit. Any advice on content marketing, like getting better at it? I mean, you did write a book, you have a really successful podcast.

Yeah.

So you're no newbie when it comes to content marketing. I

was trying to create the Morning Brew of South Asia.

Yeah, yeah.

During the pandemic, my idea was like, hey, like, you know, I'm from Bangladesh. Like, wouldn't it be so cool to like interview other people who are like me, came with a visa and like have done well? And so I've interviewed the youngest billionaire of India. I've interviewed like, you know, a partner at Bain, et cetera. So it's really cool. I guess I'll just go back to the original thing, which is like, you know, make sure it's unique and make sure Make sure you care about it, make sure you invest the time, effort, and ideally some money as well. Like the production, like this podcast itself. Like we were just talking about, you know, how you guys have made the really smart decision to invest in production. There's so many podcasts out there, there's so many. How do you differentiate? You know, the fact that this is video and not just audio, right? Right. Like there's so many small things that could, you know, make that difference. I would say the core end of it is like you just have to care deeply. And once you do, you constantly keep evaluating it— sorry, constantly keep evaluating and improving and iterating. And that compounds. Got it. That, you know, on a weekly— if I look at the podcast when I did it, I did it for like, you know, a year-ish, year and a half-ish. Like every week, I would say almost every couple of weeks, I had something new to the to the podcast that I added. Yeah. Like, that made it better. Like, I would take the best comment and I would pin it, like very small tweaks, right? Or, you know, I would ask an intro question and outro question, right? I would, you know, introduce music and I'd, you know, I would send it to my friends and be like, hey, which beat do you like best? Right? Like, because I cared, you know, it's not like I had 50,000 people listening to it. I had like, you know, 5,500 people initially listening to it. And it was like, Okay, how can I make this the best?

You improve one thing at a time. Yeah.

How can I make this the best piece of content they consumed this past week?

I know you have to run, so I have just a few more for you. So number one, you started as a VC associate at Crossbeam.

Yeah, I was their first employee. Yeah.

Got it. So like, what do you feel looking back now were some of the most impactful steps you took to get to where you are now?

I met my partner because I was an immigrant and I didn't know anyone in the city and I was doing banking recruiting. Yeah. And I had an interview on Wednesday and another interview on Friday. So I went to one of the business clubs I was part of. I went, you know, I asked them to match me with an alum, and it turned out to be Ali. And like, I basically crashed on his couch Wednesday, Thursday. And I, you know, before leaving, I was like, I, I feel so bad. You know, he opened up his home for me. Let me get him a book. So I got him The Black Swan by Nassim Taleb. And I wrote a small note on it. I was like, hey, thank you so much for hosting me. This is so kind of you. I left it on his desk, and apparently his girlfriend at the time, who's now his wife, found it and was like, oh, he's a really sweet kid. You have to stay in touch with him. And fast forward a year and a half, 2 years later, when he was starting Crossbeam, I was in banking. I was like, do you want to come work for me? He was like, yeah, as long as you sponsor my visa, let's go. Right. And it worked out. The other thing that's probably more actionable and useful for the audience that I did that turned out to be something that still to this day pays dividends is I used to TA the entrepreneurship class at Cornell. I used to be very, very interested in startups and entrepreneurship. And that class had guest speakers come to the class to speak about various different topics. And it turns out sometimes one of the guest speakers would not know one of the other ones. Let's say there are 2 VCs, or one of them is a founder, one is a VC. And it's like, oh, you guys should know each other. You're both Cornell alums. You're, you know, whether it's the founder of a large company and you're a VC, like, hey, maybe he should invest in them or partner in some way. So often I'd go after the class, I'd be like, hey, did you meet this person? Like, he came 2 weeks ago. He was awesome. And, you know, she'd be like, no, I haven't. Like, you know, I'd love to. And so I'd email them like, do you want to meet them? And all of a sudden I'd be like this 19-year-old sophomore, junior in college, And like, I'd be like in between like some really big names and I'd put them together and I'd be like, oh, like, hey, you know, introducing— because, you know, often students ask or even younger people ask like, oh, what can I get? Like, what type of mentorship can I get? Like, I kind of flipped the switch and I was like, all right, what can I do for them? And, you know, they— I made an impression on a lot of people doing that. Right. And they were very grateful for that. And so when it came time for me to ask for something, They saw me as a peer or someone who can actually add real value versus someone who's just taking from them.

Right. That makes sense. And so in the book, I wrote down here, there's one essay that talks about the 5 due diligence pitfalls.

Yeah.

I'm going to list each one, rapid-fire thoughts. Where should VC associates be careful?

Yeah.

First one is early conversion.

Yes, yes. The logic there was like you could have a big waitlist or you could have a big pipeline, et cetera. But how many, let's say a lot of them converted and you're like, okay, did you cherry-pick? Or is this representative of the—

Or are they friends and family potentially?

Yeah, exactly. Is this, how'd you find those customers? You have 5 customers, great, but how'd you find them?

Is it scalable? Yeah. The second one is slightly related. Sign-up/letters of intent.

Yeah. So again, all it's getting at is it's easy to gain traction or KPIs, but it's like you have to get to the essence of what is real scalable actual product market fit.

That makes sense. Founder-led sales scaling.

Yeah. So you have a very charismatic founder who's fantastic, And they close deals like it's nobody's business. And now you hire 2 salespeople and the conversion rates all of a sudden fall very quickly and they're not good teachers. Yeah. They're not good delegators. And so I don't know how you're gonna sort of DD or do that, but that's a pitfall to sort of just keep in mind, just evaluating, okay, let's say they have 1 salesperson, kind of when you're again going back to doing work, doing data, it's like, How much of the deals came from the founder? How much came from the salesperson? Right. So it's like, oh, the salesperson's been around for 8 months and they brought 1 deal and the founder closed 12.

It makes you ask, like, why can't they recreate that?

Exactly. Exactly.

That makes sense. Gross margin.

Classic old business Warren Buffett stuff. Pricing power, whether it's pricing power, whether it's cost advantages, whether it's Your ability to control levers, stuff like that.

And then finally, growth rates. Why should you be mindful about growth rates?

Yeah, because again, I think, again, going back to it's easy to game sometimes. Sometimes you can do a lot— before fundraising, a lot of people jack up marketing, for example, and all of a sudden the growth— things are growing very quickly.

Customer acquisition costs go through the roof.

Yeah, exactly. So how much of it is quote unquote organic? how much of it is artificial, or even if it's artificial, like, you know, like for example, when we look for CAC, we look for blended versus paid. Yeah. And it's like, okay, if your paid CAC is really high, but you know, your organic, you know, you kind of want to figure out what are the levers you can pull. There's no good or bad or wrong. Just understanding those nuances are very helpful. And like, they can all point to Again, no startup is perfect, but at least as an investor, as a partner, as an equity holder in the business, you kind of know where this business needs help, and you can sort of direct resources, get the right advisors. Let me give you an example for the sales one. So let's say the salesperson's not doing well, and it's all founder-led sales. We would probably try and loop in another fund or another advisor who's like a go-to-market expert. For example, and their whole thing, their whole right to be on the cap table would be because they are helping the founders scale their go-to-market function. Yeah,

that makes sense.

Small things like that.

2 more questions. What is one mistake that you've made in your career as a VC that you've either learned from or still learning from?

If I'm being very, very honest with myself, I think I was a victim of FOMO and I kind of did the whole like, you know, take too many calls and not spend enough time thinking about, thinking critically about spaces or thinking critically about, you know, each company I was talking to because they were just churning through. Okay, this is good. This is, you know. Just sitting and thinking through it. And now I'm very intentional about every meeting I take and I'm very intentional about making sure the founder I'm talking to has a really good experience. Because that reference or that experience is going to be, as you mentioned, eventually is going to become my reputation.

Makes sense. Well, I really appreciate you spending time with us intentionally. Is there one thing, like, just for those folks that are interested in the book, what's one thing that you took away from it that you sort of changed about how you operate in VC?

Weirdly enough, it made me so much more of an independent thinker. It made me so much more of a you know, there's no right answer. And as long as it makes first principles sense, like I should just go do it. Because that book will show you like there's such a diversity of think thought. There's so many different playbooks.

Not everyone agrees in it.

Yeah. Yeah. People say different things within it.

That's what I found interesting.

And I didn't want to like edit it out or anything like that. I actually kept that. In fact, I even like technically would— sometimes you'll notice some of those paragraphs are broken out. Some of the paragraphs are short because I wanted to make sure like whoever's reading it, They see the contrasting views because there's just different ways to play the game and there's different ways to win. And so my big takeaway from it is now, like, I kind of like, when I think of whether it's a good idea, like, I talk to a couple of friends and I like get their opinions. And, you know, what we say about contrarian is like, if all— if 5— if you talk to 5 people and 5 of them think it's bad, then it's probably a bad idea. But if like one agree with you for, you know, for the reasons that you—

With a strong conviction.

Yeah. And, you know, stuff like that. So I think I'm a lot more independent about just the way I think about, you know, just my day-to-day, like, you know, small operational decisions about like hiring within our firm, our firm's brand, what we stand for, et cetera. Does this make sense to me personally?

That makes sense. Thank you so much for joining us.

Of course, I appreciate it.