Building a Pre-Seed Fund For Untapped Founders (feat. Yohei Nakajima)

Hello, everybody. Welcome to the Building Public podcast. I'm your host, KP, and I'm super thrilled today to invite Yohei Nakajima. Did I butcher it?

Nakajima. You want to try again?

Nakajima. No. But for folks who are just listening, we practiced this a couple of times before, so I have no excuse. But I was also remarking how that, you know, his last name is Japanese, and then it's seemingly easier than some of the Indian last names that I had to pronounce on the podcast coming from an Indian. So, it's funny. But hey, welcome to Welcome to the show, man. I appreciate you having been here.

Excited to be here.

So, for folks who may not know about you, I'll let you introduce yourself in a second, maybe like in a 30, 40, 50-second intro, but I want to share sort of my framing of you. And I'll see if you correct me if I'm wrong or far off. It's not a hyperbole to say you're probably the most, the most, I would say, as an investor who has such a strong builder side of himself or herself. I love how big you're into building stuff, side projects, tinkering. And that's kind of how I discovered your profile, I think, you know, many months ago. And the other side of you, which is also my favorite, is that you tinker in public, you build in public, you do a lot of these experiments, side projects, explore your curiosity in public, which is amazing. A lot of investors, I think, are too thin-skinned to, you know, like show their learning process, like open the garage door and kind of show like, hey, these things are not perfect yet. And I love that you have the sense of openness to do that. But also, I have to wonder, it will definitely keep you really up to date with the trends and the edge cases and all these new things that are bursting out. But so anyway, that's my framing. Thank you. I loved your energy. I love the build energy that you have on Twitter, and I couldn't wait to chat with you. So

yeah, I'm excited to be here and then tell you more. Yeah, let's do it. You want to start with a quick intro?

Please do. And tell us a little bit about Untapped as well.

Yeah, I mean, I'll start with, you know, kind of go back. I've been working with startups for about 15 years. Wow. Initially on the community side, my first kind of foray into the startup ecosystem system was Startup Weekend. And I do think that like that energy has like stayed with me, like huge fan. I became an organizer. But after—

What was this?

This was in LA. So I was really active in the LA ecosystem starting around 2010. There was one coworking space, one event a week. I had worked on my own startup right before that and made the biggest mistake I made. I made every mistake, but every biggest mistake was not surrounding myself with other people who were also founders.

Right.

And so when I went to my first Startup Weekend, the energy of like, oh, I shouldn't have been doing this alone in my garage. I should have been talking to other people and learning from them. really clicked. So I leaned in heavily on becoming an LA community guy. I was setting up meetups, I was organizing events, and I eventually started working at a couple of coworking spaces running kind of programming for founders. And that's when Techstars came out to LA to spin up the Disney Accelerator. And I got connected to Cody, the managing director. Right. We got along. I was lucky enough to join his team. So I got to start investing into startups. And my first foray was sitting in a room with Disney executives judging media startups. Fascinating experience. Wow. And then after helping spin that program up, I moved to a more central role within Techstars as the first director of So I was running top of funnel sourcing. I leaned in heavily on outbound as my like thing to do. So I was building, you know, I was researching tons of companies and building shortlists of companies that I thought each program should reach out to. So that was an incredible role, really fun. At that point, I knew I wanted to start a venture fund. Like I liked supporting founders in that role.

And how long were you with that previous stint with the Techstars?

So it was about 2 years as a director. So 2 years of just looking for companies, sharing with investors, getting a feedback loop, and just like nothing but sourcing for 2 years.

Yeah.

And yeah, I knew I wanted to start a venture fund. I had connected with Tak, the GP of Scrum Ventures, when he came through the Disney Accelerator. And so I reached out to him. He raises capital, you know, they raise capital from Japan. I speak Japanese. I thought it might be a good place for me to learn about running venture. He was just spinning up an innovation consulting arm with the first client Nintendo. So it was kind of the perfect place for me to step in because of my background at Disney. So I was able to come in, help build up that consulting arm while kind of learning the ropes of venture. And then at some point, you know, as all founders do, I kept thinking about it. When I do start a fund, what would the thesis be? Who would my partner be? And, you know, after many iterations, one of them just stuck and I couldn't stop thinking about it. And this was this idea of a pre-seed venture fund that primarily sources through outbound.

Yeah, I was about to comment earlier that, you know, I was at On Deck, as you know, and I was, you know, I've been behind the scenes with ODX, the accelerator there. And one of the surprising things that I've noticed is that, you know, a lot of VC funds kind of overlook the power of outbound. And because I think there's a sense of like it's dirty work or it's grind. It's like we have such a great brand; they should come to us. But I think it's kind of like the same way a lot of founders think about customers. Like oh yeah, my product is so great. You should come to us and and but you know people know that that's not how it works, right? Like they have the leverage. Like in this case, founders have leverage.

In their defense, it does work. But the only thing is if everybody does it, it becomes it's not an advantage, right?

Unless you're really like literally like Sequoia, probably not a good strategy. You know. But anyway, so finish that thought. So you then started— you wanted to start a pre-seed fund, and that's like a very unique wrinkle. And you thought, I'm going to focus this on outbound as a strategy. It's intentionally— call it out there, right? It's like, I'm sure it was part of the thesis, like part of the structure.

Well, the thesis evolved over time. We naturally, you know, we realized just doing outbound was the how, but we really needed the why, right? Yeah. And talking to mentors and kind of going through what I call my version of mentor madness, where you talk to 100 people about an idea, I settled on this idea of like, we can find founders that other VCs can't because we're doing outbound.

Yeah.

And so the whole thesis is around the fact that too many VCs are looking at the same startups, you know, due to the culture of, you know, referrals and allocation chasing, right? Which leaves a huge gap in great founders who just don't have an existing network, right? So that's our target. And because they're not in our network by definition, we primarily source through outbound, right?

Do you have an investor with you on the fund?

Yeah, I work with Jessica, Jessica Jackley. She's pretty well known for starting Kiva, the microfinance site. No way. But she's, she's worked with Collaborative Fund. She's, she's been a serial founder. Incredible to work with.

Nice. And you're in Seattle, correct? Is she there too?

She's down in LA.

LA. Yeah. Very cool. Shout out to Jessica because I love Kiva. I love it. I'm a user. I love it. I constantly give— it's such a great Great platform, you know, for being able to help somebody who needs your help and through microloans. So I actually, when you mentioned the pipeline thing, Yohei, I had a question that I wonder how much of what you did there in those 2 years, you know, do you think what were some subconscious lessons you picked up there apart from outbound should be a strategy? Like, what are some of the nuanced lessons you picked up there that you currently, you think, are bringing to Untapped right now?

I'll bucket it into 2 categories. There's learnings around how to do outbound, and then there's learning around building, because I think that's, that's going to be a good transition. I'll start with the outbound piece. One, you know, I'm a big proponent of the investment decision maker being part of the outbound process. I've just seen too many times where associates will reach out to, you know, someone junior will reach out to a founder, talk to them for 30 minutes, you know, take notes, show it to a GP who looks at it and 5 seconds go, oh, we wouldn't invest in that. Mm-hmm. And I feel like that, that happens too much, and that's a lot of time wasted. If the GP was willing to even just review the list before they reached out, at least initially, to kind of train them on what to look for, I think a lot less time would be wasted. So that's something philosophically I think What

would make the GP not be interested in like being part of the outbound? Is it just a pure lack of time at that scale? Like at that, you know, if you're doing it.

I mean, it's, it's more convenient to say, hey, you know, you look at a whole bunch of companies, you go talk to a whole bunch and just present your favorite to me. And it makes sense. Like it's, it's much less work for the GP.

Right.

But, you know, in my experience, when I look at a list, I'm reaching out to less than 1 in 100. I just don't see how somebody else that I just recently brought onto my fund would be reaching out to the same 1 in 100 on a consistent basis. I just don't know.

Yeah. Is a combination of taste and intuition, you know, correct? And how would you— well, I know it's hard to describe in words, like paint a picture of if I gave you a list of 100 companies, what— give me like a sense of like how would you gravitate towards the 2 or 3 that you would eventually—

That's a good question. What goes through your mind? Well, one of the aspects of doing outbound, it is a grind. I have to have a big top of funnel because there's a lot more noise. So I'm looking at, you know, I love sitting down and just looking at a list of 200 companies. Like, I enjoy it and that's, I guess, why I decided to do it. Other people don't. I enjoy it. That should be my—

But what are you— give us a workflow. Like, what are you looking at?

My workflow is super process-oriented. And when I actually started the fund, I knew from day one that I was going to build my own CRM. So we run our whole fund on a no-code CRM and I've, you know, posted templates and whatnot. So I bucket my work. So I have a hunting mode, which is when I'm looking at lists of companies, or sometimes I'll find it on Twitter, Product Hunt. Someone will send me a list of recent graduates. It's an event. When I'm in hunt mode, I have a rule that I don't type. It's a weird rule, but I only click through. And the reason I do that is just based on my experience. If I start typing and researching, I go down a rabbit hole. But if I limit myself to clicking before I decide if I want to save it into my CRM, it just allows me to get through the list faster. I use Pocket as my bookmarking tool.

Yeah.

When I save a company on Pocket, either on my phone or computer, it kicks off a Zap that drops it as an organization in our CRM. It adds it to my outbound pipeline as new. Which means like there's a to-do action there, right? And then I have a separate Zap that does, you know, that pings the Crunchbase API, pulls in a whole bunch of data, fills it out for me, and I'm building in much more kind of enrichment APIs on top of that. So that's my hunting bucket. And then my next bucket is review. When I sit down and go through new companies that I've queued up for me to review, at that point, all I'm doing is scoring 1 through 4 and bucketing it into one of 3 buckets, which is—

And this score is a conviction score? Like how—

It's a gut score, 1 through 4. 4 is like, like, this is priority, I want to reach out. 3 is like, I'll probably reach out. 2 is like, probably not. 1 is like, why did I add this. It's pretty straightforward. So most of them are in the 3 or 2 category. And I go through that, I tag all my companies. So then what I have is this queue of interesting companies that I think I might want to reach out to. And then the third bucket is outreach, which is if I have time on my calendar, and I have money and capital in our fund, and then I will just go into my queue, I'll look at some companies and reach out.

Right. So for a company, let's say that's now based out of Cincinnati, Ohio, right, which the founders don't have a network in this scenario, I mean, like, Maybe they were not ex-Stripe or ex, you know, whatever. This would be one of your 100 companies in the list in the hunt mode. What would stick out to you or what are some signals you look for as an investor, you know, to kind of say, okay, this could be an interesting company? Are you already looking at the deck at that point or are you just saying like—

No, I'm just looking at it as well.

I don't have the link.

I mean, I usually just have the link. Yeah. So it's hard to say. It's really a gut instinct. Like at the top of the funnel, it is instinct, right? I'm just flying through. But, you know, one is kind of Have I seen it a lot before? I mean, I'd say like 60% of the, you know, maybe even 70% of the companies I see, I've seen 12 versions of it before. So that's less exciting for me. So I do, because I'm looking at, you know, I think I look at more companies than most GPs.

Yeah.

I have a pattern recognition around like, oh, this has been tackled a lot. And of course there's biases for better or for worse.

Right. So when you mean by this, you're seeing patterns, you see, you're saying like basically like a problem that was attacked before, kind of like, you know, I keep hearing everybody on Twitter wants, wants like requests for startup is like personal CRM, personal CRM, personal CRM. But like there's 18 startups that started that and failed, right? So that would be like for you, oh yeah, I see this.

Yep, definitely that. Yeah. Or it's a space that I'm just, you know, truly passionate about and I look at it and go, this is something I care about. A good example is, um, we just announced a company called Pulsaid. They just got into Techstars New York. They're a healthcare company doing some interesting things, unbundling primary care from insurance. So basically making primary care a subscription unlimited service that employers can offer employees. Wow. Um, that one really clicked for me because, you know, US healthcare cost is something that's This is like something that does matter. Yeah, yeah. Others mean, I think, you know, I've always thought insurance has, you know, is slightly broken. They have a lot of problems.

But I think that scenario, can they pull that off? Like, I feel like—

It's, I mean, yeah, it's, it's, it's going to be challenging, but, you know, but that's—

They're giving it a shot. Yeah.

Yeah, exactly. I mean, I think they've approached it in the right way, and so I'm excited about it. But that's an example of when I saw the company, it immediately reminded me of like a problem in the world that I am truly passionate about. And so I reached out, talked to them, and I really liked the way they kind of had planned out their strategy.

Interesting. I love that. Let's, let's talk about some of the side projects. And I know you— I remember trying to recall the first time I heard about one of your side projects. I think it was something with Softr. Was it the CRM? I can't remember what it was, but you could— it went viral for a while. Like, it was pretty big. And, you know, I invested in Softr. So Mariam, like, I think I remember I follow her on Twitter. So I think she was sharing it or the Softr account was sharing it. And then like, I checked it out. So I want to hear about how that came about. What was your intention there?

So, I mean, I've always been like a hacker, but I've never been a developer.

Yeah, yeah.

So no-code was always kind of, right? Like, you know, when I started my fund, actually initially I tried to code my own CRM, like it was in PHP MySQL, and I quickly realized that was not the right use of my time. So I switched to Airtable. I lost some functionality, but like I could move a lot faster. Yeah. Right?

Don't you wish you would invest in Airtable though? Like, isn't that such a great tool?

I actually emailed, was his name Howie? Like pretty early on when I was still at Techstars, but he was too late for Techstars at that point. But I do remember seeing him a while ago. But yeah, you know, we had already built our fund on Airtable. I knew I wanted a front end, like, you know, LP portal, founder portal to start building. So I kind of looked around at tools. I tried Webflow, Bubble, Stacker, Softr, and Softr just clicked for me. I think it was just a personal preference. I actually really liked Stacker at that time. They weren't as good at building non-CRUD interfaces. Yeah. It was mostly focused on— and but Softr had that you could build your homepage. Right. So the first thing I did was just build our website on top of Softr. Yeah. For fun. And then tied the data back to our Airtable and then built our LP portal, which I live tweeted my build. And I think that was one of the Yeah, I just opened up Twitter and as I like built it, I just tweeted.

I think I remember every 1 hour or every 30 minutes you would like have an update on that thing.

Yeah, no, it's fun to live tweet builds,

right?

Because you get like, people get to see like even the mistakes you made and I think it's just fun learning. So

decision making. Yeah, yeah,

exactly. So yeah, that was the LP portal. And actually what was great was that I had a couple of VCs reach out and say, hey, I built our LP portal using your tutorial.

Nice. Wow.

And that was really motivating. And I think that's, you know, every time someone does that, it incentivizes me to keep doing it, right? Yeah, yeah.

That was so dope. And that was, I think, the beginning of the journey for you as a builder for like the VC use case, right? Like, I mean, there's so many other minor things that can fall in that bucket. What else have you built that you want to share with the—

Well, I'll actually even go back further. Actually, at Techstars, as a director of pipeline, I had actually built a pretty cool Google Sheets. I was managing— well, doing outbound for 30 programs. So I built this Google Sheet full of Google Sheet scripts. I had a master sheet and I could just add companies to it and tag the programs that would be a fit. It would auto-populate their unique sheet with companies that they thought might be a fit, and they could say yes or no. If they said no, that company got removed from the list and went to the next matched program. If they said yes, it asked them which template they wanted to use. And I had asked MDs to give me email, cold email templates, which I added to Reply.io. I connected their email directly to it. So from Google Sheet, they could say, I want to reach out to this company, I want to use template 1. When they did that, it just shot an email from their email to those companies.

That's dope. That was really cool. How much, like, how much was no-code a part

Well, I mean, not really. I mean, I was kind of like a one-person department, so I kind of just got to do my own thing. So I just had my own Google Sheets sheet that I wrote scripts into.

That's interesting. I wonder, because also even maybe that at that point of time, maybe no-code was not even a—

Yeah, it wasn't as big.

Trend. Yeah.

I'd say for Untapped, what's best about Untapped is like for the first time, I'm basically, you know, first time in a long time I'm working for myself, so I don't have to ask permission to share Yeah. Because the second I have to ask permission, I like lose the motivation to share it. And I noticed that before. So with Untappd, I'd say there's 3 big buckets of things we've built. You know, 2020, I built the whole fund on no-code, full no-code backend, and that led to investments into no-code companies like obviously AI, which is, you know, no-code.

Oh yeah, I know some of them.

Yeah. So we got to invest in them. 2021, Web3. I launched my own NFT collection called Pixel Bees, community for VCs and founders. We did the first integration into a handful, probably a handful of startups. So it was a really fun way to like meet and build alongside Web3 founders. Right. We even had founders who joined our community and pivoted into Web3, one of which we invested in, a game called Pixels. So again, like build to learn and meet. And then this year it's been, you know, deep AI, right? So yeah, I'm building kind of tools on top of— I think I've probably built, I'd say like 2 dozen mini projects. But at the core there's 3 types of projects. One is founder support tools. So we have, you know, VC expert, blog post writer, you know, SEO idea generator. I'm working on a job description writer, all these kind of things. Initially we're providing to our portfolio founders. Of course. Just like a free tool with the intention of opening up more. We just need to strategize.

Right.

The second is kind of helping us do diligence in companies. So we built kind of a due diligence tool and it kind of surfaces a lot of information and, you know, now starting to tie it into like the Crunchbase API. So it's not just GPT-3, but fetching information from different sources and kind of auto-generating like a deep report that then we can dive into. So just skipping some of the basic steps of like asking somebody to go pull data from Crunchbase and like look for similar companies.

Right.

I mean, I guess those are the two. And then the third category I got is just like fun stuff that I do. A lot of it tends to be either something I want personally, or it's like a very small version of an idea I'm interested in investing in. And so anytime I post a project that I hacked together in a night, I tend to get 3 to 5 founders DMing me who are building in the same space.

Yeah, they're probably building a bigger— at a bigger scale.

Yeah, exactly. I mean, my, you know, mine caps out at 100,000 rows. Because like mine's not scalable. I know that.

Right, right. I think, you know, it's also as a founder, you know, if I put my founder hat on, I think it's so important to be around other investors who get it about the space, about the use case, about the problem. And I think through your builds publicly, you're signaling to them that, hey, I am not only— I'm saying that I get it, I'm actually doing it. And so of course I get it, along with the limitations of what comes into this, you know, what comes with this field. I have to ask this fun question. Do you think— do you see yourself being an investor for the long time? I feel like you have such founder energy that it is a missed opportunity if we don't find you in the arena boxing it out as a founder.

I appreciate you saying that, but I am a founder, right? I'm founding Untapped Capital, which is a new type of venture fund that builds scalable products. So

it's interesting you're seeing it that way. And I just— that thought alone, I think, seems to me that it's separating you from a lot of other funds, right? Like, it's not just decks and spreadsheets and math and capital allocation. You know, you just have skin in the You know,

it's so much fun. I, you know, the other day I published, you know, a Zapier integration for GPT-3, and it honestly took me 20 minutes to do. Yeah, I realized, like, I usually I spend my time mentoring startups and I love doing that. Yeah, but if I, like, carved out some of the time I'm mentoring startups into building, which I've been doing, but, like, building a Zapier integration for GPT-3 has significantly more impact than me sitting with one founder for 30 minutes. Yeah, yeah, it's pretty fascinating to think about the scale of impact I can have if I focus on building as a VC with a mentality of, like, mentorship or just, like, helping founders, you know, Or get to a certain point.

Right. So if— see, the other question I have is, if— what are some functions that you think you can add specific value for founders? You know, if they come to you for XYZ, what is that XYZ about? Is it growth? Is it tooling? Like, what do you think you shine on?

I mean, I think it depends on the founder. One of the things we do is we offer weekly calls for every founder for the first few months and really just focus on building that relationship. Because again, I do think that's the most important. I just want to make sure that they feel comfortable reaching out to me at any point. But more specific tactically, outbound is something that people ask me for help on. I mean, you know, it's basically creatively building a list of targets and figuring out the best way to reach them. And so I've kind of organized— I have like a little talk workshop on doing, you know, outbound tools.

Have you published this anywhere? I feel like the talk should be valuable beyond your portfolio.

I should, I should do that. I

think it's a great, like, top of funnel lead magnet for the fund.

That's a good point. I should.

You know, even if it's a Medium article or, you know, whatever format of it doesn't matter. But I think I'm myself curious. You know, because I know enough outbound. A lot of my strategy, like I'm shocked at sometimes people come to me for growth and go to market. And when I sit with the founder, a lot of the times all they're thinking is content marketing because that's hot right now, right? TikTok. That's why you have to partner with some influencer on TikTok or YouTube Shorts because they're like, no, I don't want to do content myself. I'm like, okay, have you? And then they're like, oh, the other thing to talk about is like blogs, SEO, which I understand there's a longevity value in SEO, getting it right, but they forget outbound. It's almost never talked about. It's like hush. It's like so sleazy if you even bring it up. Have you thought about cold email outbound strategy? And they're like, no, no, no, we're not SalesLed. We're PLG. I'm like, yeah, I get it. But you're missing out on a ton of low-hanging fruit if you just did targeted outbound. And I would show— I mean, last week I worked with a founder where I typed with him, live screen sharing, 4 lines of outbound email because outbound doesn't have to be an essay. In fact, actually it shouldn't be.

It should be short.

The shorter the better. So literally the 4 lines and with like a social proof and the demo link, that's it. And I said, put this in HubSpot, create a drip campaign and you're done. We're done. You don't have to do anything more than that. And they're like, you know, it's so underrated. Most founders do not appreciate. And I don't know how— that's why I'm saying I'm curious if founders even come to you or even the top of the funnel founders who are like, how do you do outbound again? Like, what's your unique take? Because that's what I'm curious about. What is your unique sort of flavor on this? So

yeah, I tend to do— I use the tools I know. If it's sales, B2B, Crunchbase is a great tool, right?

What is the other tool? Zino?

Zino? I don't think— I don't know Zino.

No, sorry. You said what?

Crunchbase is the one I mentioned. Oh, of course. Yeah. Crunchbase. Well, I say, you know, if you're selling, let's look for a company with money. If they raise a series, you know, depending on what you're selling, is your— are you targeting people who are after Series A? Are you targeting people like much later stage, right? If you're targeting startups. Also for hiring, whenever someone comes to me for hiring, I tend to come up with outbound strategies like, hey, let's look for a company that's, you know, 2 stages ahead of you and look for employees who've been there for those years. Yeah. So they've been there during the company growing from 10 to 100 people. Yeah. And maybe they like 10-person companies. Let's try reaching out to those

Yeah. What do you think is the biggest hesitation founders have about outbound? Give me like a 3-point answer, 3 separate bullet points.

One is like, it does feel icky, right, if you don't do it right. And largely because people are getting a lot of icky, you know, people don't do it right, it just makes it seem worse. And 2, I think, yeah, I guess I don't know if it's like a 3-point answer, but one, the mentality, right? Like, I often hear like, oh, I don't want to bug the wrong people or something along those lines. But really, you know, if you've built a great product, There are people in the world who want it. So if you put the time into finding those people, you're doing them a favor by letting them know about the product you built. And unless you feel that way, you're not going to do outbound.

Yeah, it's a mindset shift. Yeah, I fully agree.

And like, if you feel like you're doing them a disservice by emailing them, then you're probably not targeting the right people.

Right. Yeah.

Yeah.

No, I'm just shaking my head because I'm like, this is like my conversations with a lot of my founders that I talk to. I'm like, guys, you— and you— I feel like there's also a dearth of positive examples and use cases, you know, kind of like how, you know, with no-code, like a lot of people, when I got into the no-code feel like they're doing it as if it's like they're trying to prove to the coders and developers that we can do this too. One of my success stories, or like one of the narratives of my success stories, I didn't give a shit about what developers thought. I just wanted to live up to my potential, wanted to have fun for my journey. It was not about them. It was not about the bad case studies. It's about what I wanted to do and like, you know, scratch my own itch, kind of like all your mini projects. And that helped a lot because a lot of founders after that and a lot of creators are like, oh, there's also positive use cases, positive stories and all that, right? I feel like right now with Outbound, Maybe this is me thinking in my head, but I feel like there's a lot of negative use cases and bad examples and poor shitty results and outcomes. And they're like, oh, outbound sucks, it doesn't work. I'm like, or it's just, you're looking, you're wading through some crap. So you should put more stuff out there. I should put more stuff out there. Yes, we should. Because I mean, I take it for granted, you know, and I'm sure you feel this to an extent. Like I pitched Mark Cuban, I pitched Alex Saghanyan, I pitched Gary Vee. I did a show with Gary Vee last week. You know how we got— I don't know Gary Vee. I just cold pitched him. And the same thing with Mark Cuban. Like, I don't know him. And it's about the 4 or 5 ingredients you need to have in this cold pitch. Make sure that it's relevant to them. All these basic things which I take for granted, which you take for granted. I think we need to publish more because I think a lot of founders are sleeping on it.

Also, depending on the outbound. So I mean, one of the challenges outbound, it is very like nuanced. Like the way you should do it is there's no cut and paste strategy that works for everybody. Right. But overall, I do feel like a lot of people give up too soon.

Yeah.

I emailed 10 people. I didn't get any responses. Like, yeah, you know, Like, I'm expecting a 1 to 2% response rate depending on the outbound I'm doing. Exactly. You're not going to get a response in 10.

I think one of my bigger eye-opening moments about outbound just changed my perspective. I used to be the founder, by the way, that the reason I'm making fun of some of the founders who don't understand outbound is because I used to be one of them. So I have empathy along with the fact that I know that it was all a limiting belief in my head. So I read this article by Paul Graham. I'm sure you've seen some version of this where he talks about how Stripe, which was $95 billion until last year, until this year with their private valuation, the first, I think, 100 to 200 users. Paul Graham talks about how the Collison brothers recruited them. They didn't get users. There's no getting users. You recruit them, which is outbound, right? What do you think about that? So a lot of founders, when I mentioned that thing and when I showed them that article, they were like, I'm sorry, like, you have to be humbler than Stripe, right? Like, you gotta be humbler than— you gotta think about that because they built a $95 billion empire, but the first 100 to 200 customers came from literally, you know, reaching out, outreach. Outreach. reach, you know, and like literally physically, apparently part of the story was physically they would go install Stripe manually into the laptops for some of these developers. And yet some of the founders that I talked to sometimes are like, yeah, we went and spent 6 weeks and 2 product sprints and we completely optimized the latency, landing, you know, loading speed of this particular widget. I'm like, but have you talked to a customer yet? And they're like, yeah, we talked to them, but have you pitched them? Have you like—

There's also a fear, right? Because if you don't think you're going to get If you don't pitch anybody, you can't get— you don't know.

I think the underlying theme that I've seen is it's not so much that they're not technically competent or whatever. I think it's so much about it is the fear of rejection, the fear of like the customer or the recipient in this case could be customer or VC or whatever, saying that you're not good enough for us yet. And, you know, I have no answer for that. Like, you just have to— that's just part of being an entrepreneur, right? Rejection is, you know, and my only other reminder to them is usually that no matter how successful you are, people will always reject you. There's always going to be someone's going to reject you. As long as you're being ambitious.

So, my suggestion for anybody who does feel that hesitation and doesn't really know how to overcome it is to talk to more people, right? Whenever I start a new project, whenever I'm even raising, you know, whenever I'm raising, whenever I'm doing something, I pick a number of people I'm going to talk to. And usually, like, I just, you know, when I started Untapped, I said, I'm going to go talk to 100 mentors first. And I just made a list and I just started reaching out and I talked to 100 people. When you talk to 100 people, again, it's not everyone has those 100 easily, but if you talk to a lot of people, I always find that the way I talk about things starts to like consolidate. Like it starts being kind of all over the place, but like by the 30th, 50th time, it starts to become kind of unified. And then you feel more and more confident in your message because by the 70th, 80th time, it's strong. And then once you get to that point, then it's much easier to reach out to people you don't know.

Right, right. I fully agree. So this seems like a fun period of your journey, and I want to ask a couple questions about the fund, the Create. I mean, The capital raising, fundraising for the fund. Oh, it's so meta. How did that come about? What were your— like, what was your thinking going into it? Because, you know, you had some version of this, like, you kind of should— you must have predicted how much of a grind it is, or, you know, how many connections you have to make, how many meetings you have to take. But what were like— give us a sense of what was your mind at before fundraising for Untapped? And then once you finished the journey, what were some lessons you learned from that?

I put a lot of effort into just reading and learning as much as I could about starting a venture fund. And I was lucky that around the time I was starting to think about it was when a lot of content was starting to come out, right? There was a couple blog posts from like— Elizabeth, Elizabeth had like— I

saw you give a shout out to— yeah, that's right.

Elizabeth was one, and I realized, okay, it's a matter of number of meetings. And yeah, you know, and I basically thought I could build up more of a career Or I just have to pick a time I'm going to raise my fund. And I basically thought, you know what, I think this is the earliest in my career I could actually raise a fund, but I think I can do it.

Yeah.

I gave myself a rule, which was I will talk to 1,000 people in 9 months. Damn. And if I don't get to a first close, I'll give up.

And when— wait, wait, wait.

No, no, I said 1,000 people in 1 year was the rule I gave myself.

1,000 people, 1 year, and was it a $10 million fund? Like, what was your—

$10 million fund, but my goal is to get to a first close. Because if I get to a first close, I can start investing. If I can start investing,

That would be how much? What, 25%?

In my case, I did it at 10%, but some people would say that's a little on the low side.

Yeah. You were kind of like safeguarding it. So if you got to $1 million in close, I think, right? And you give yourself a year and 1,000 meetings. Wow.

And that was not necessarily 1,000 LP meetings, just like 1,000 meetings in general. Yeah. It ended up being about like 600 meetings in 9 months.

Yeah. Yeah. Tell me more.

It was super, super helpful to have that, right? Because of course, when I, when I got to 300 meetings, And I hadn't closed anything, I'm, you know, I've only closed a little bit. I can look at my metrics and say, okay, I'm only 30% of the way through my process. Of course, I still have 70%, right, of my process before I can get to a first close. So, it was mentally very helpful. And I think that's something I've seen other fund managers struggle with is like after 300 meetings, they don't have commitments. They're like, oh, what am I doing wrong? But I'm like, you just need to set your expectations so that 300 is not that many meetings.

Yeah, that might be the smartest thing I've heard about this, you know, on this topic. I know this is like sort of like a distilled philosophy that Elizabeth talks about, but it's just so smart the way you've given yourself some positive constraints around this, you know?

Yeah.

So then you jumped into this and you went on your meetings and you talked about this mentor madness, which is a Techstars term, I know. But what was that like? What was that for you and why was it important for you for the fund?

Well, because I know— I mean, I've seen enough Techstars companies that, you know, if you talk to a whole bunch of people, your story, you know, people, different people ask different questions and you'll start to realize, you know, you'll internalize the holes in your story. And if you talk to 100 people, those holes get filled and your story becomes clear and concise. And along the way, you pick up supporters.

Did you ever feel discouraged by the journey though? Like if somebody were pushing back or somebody were like, man, it's not a great time to raise the fund. Like how did you overcome somebody else's opinions about what you should be doing?

I mean, I know like no matter what you're going to do, some people are going to think it's a good idea, some people are going to think it's a bad idea.

Yeah.

And I, I guess I was just comfortable But, you know, I do think that—

Were you hell-bent though? Were you set before you started this that, okay, I'm gonna do this, I want to be an investor, like, I'm gonna do it anyway?

Yeah, I mean, I knew I wanted to start a venture fund. And when I had this idea during the Mentor Madness, was really trying to figure out if, like, this idea of, like, a pre-seed fund that does outbound, is that really a good idea? And I needed a gut check. And then at the end of the 100 meetings, I was like, yeah, absolutely, it's a great idea. Here's the thesis, here's the story that seems to resonate with people. So I'm gonna go and raise on it.

Nice. Who were one or two mentors who stood out in that 100 Mentor journey? Like, for you? Like, who were influential beyond them knowing that they were that influential to you?

I mean, there's incredible— I mean, there's a big list of people obviously that were really helpful. And I definitely got to give a shout out to Scrum Ventures, the last fund I was at. Um, and Taki was very supportive of me breaking off on my own and was the first to commit, saying, hey, if you're going to do your own thing, we'll come in, which is incredible. Yeah, I had a couple, a couple people from Techstars come in, which was also really helpful. And, you know, all the Techstars folks are, you know, they're, you know, managing directors and mentors. Like, they, they asked a lot of really good questions that made me really think and helped me kind of think through how I to tell my story. And I mean, those 2 are incredible, right? Because there's 2 groups of people that I've worked with before, right? So they know me well and can ask me the right questions, but also has incredible credibility on my fundraising journey as I go out and say the last 2 places I worked, you know,

want to back me,

want to back me.

Yeah. So let's touch on some of the lessons you learned from the fundraising journey when you closed. So you closed the fund. I mean, did you get the full $10 million or is it halfway through?

More or less. No, we closed, we closed on the fund this summer.

Very cool. Congrats.

I don't care. It was exciting.

So yeah, so reflecting back, what would be your 3 or 4 big non-obvious lessons?

You know, honestly, I wasn't that surprised with the process, if I'm being completely honest. Like, I think I'd done enough research that, like, it was challenging, but there was not many challenges that were surprising to me. The biggest— I mean, the only thing that really stands to pop to mind was portfolio construction strategy. I started investing after I did a first close on 10% the fund. So my first 10 checks were smaller than what I had originally planned, which is fine, right? That was probably the biggest surprise, which is just something I hadn't planned on. But it seems very small, but it was, you know, but I think it reflects on how I think I did do a good job of researching and setting expectations for myself.

I love the fact that you were, you know, there's this whole Buddhist thing that I subscribe to, which is your happiness is inversely proportional to your expectations, you know. So the higher the expectations, the less happy and miserable you feel, and the lower the expectations, surprised and joyful and happy you feel because you're like not taking anything for granted. And I tend to live as close as possible to that thing. It's not always easy. You know, it's very hard, as you probably know.

Easier said than done.

Easier said than done. But I feel, you know, as much as you can, if you can focus on being self-aware and like keep your mind on that thing, it's, you know, it's not that hard.

Right. But I tend to think of— I know this is not to get too philosophical. I tend to think of myself in kind of 3 parts. There's like the physical self and then there's the emotional self. There's the emotional self and then there's the actual self. And I like to observe the emotional self as a third party and just understand how can I set that emotional self up so he acts in the way that I want it to. Similar to the way you observe your physical self and say, hey, if I buy a whole bunch of junk food, put it near me, I'm likely to eat it and it's gonna make me unhealthy. But you can do the exact same thing for your emotions. It's just set it up, set up the room, the environment to help the emotional self thrive and understand the patterns that it reacts to.

Right. Wow. Have you explored any— this is a stereotype if I'm asking you this dumb question— like Buddhism or any, like, have you subscribed to any Those things practiced or meditation?

I've gone through my phases. I like studying the brain a lot, and interestingly, there's a pretty strong community of like Buddhists who really care about the brain.

Yeah,

so there's a couple books I read in the space that really got me into it. Do a lot of yoga, generally interested in like spirituality.

And is there a book you recommend?

You know, my favorite I think in this space would be— I think it's called Train Your Mind, Change Your Brain, and it's a book on neuroplasticity.

Wow.

Our ability to change our brain through training. Right. And the foreword is written by the Dalai Lama. Wow. The whole book actually follows the story of the Dalai Lama's involvement in the neuroscience community. And he even did things such as convince, you know, monks to like fly to like get MRIs even though they were hesitant because the Dalai Lama said that, you know, by contributing to the scientific community, they higher their values. So, it's just a fascinating book that was told in this, in a story format around, you know, again, it's a book on neuroplasticity, but like the main character is almost the Dalai Lama, which is fascinating.

Yeah, I see that. By Sharon Begley. Yep. Wow. I went on a, you know, like a whole period, I think 3 or 4 years ago when I just went super deep into Buddhist philosophy and I spent, I think, at least 50 weekends consecutively meditating. Not the whole weekend, but like a part of the weekend going to a temple. And like, that was the most I think I grew as an adult. You know,

I went through a phase where I was obsessed with the idea of Meditation. But I then, you know, I think there was this TED Talk about Blue Zones and how people who are healthy didn't like go to the gym, but they just exercised regularly. Yeah, that inspired me to think of this idea called the micro meditation. So like in your day-to-day, everything can be a meditation almost. It's not the core meditation we get 100%, but like, can you be mindful about your bike ride commute?

Right.

Can I— yeah, like, what would happen if you treated everything you did as meditation? Yeah. And I went through a phase where it was like, that's how I really treated my life. And it was a big— yeah, definitely a lot of personal growth.

Me too. I mean, and I think, you know, if you go to the sort of the deeper parts of Buddhist philosophy, that's really what they're talking about, is that they're saying, can you live your life day to day, ordinary stuff like chop wood, carry water, being mindful? Now that is the greatest embodiment of enlightenment, is that you're living your life doing normal dumb shit, but you're being Mindful. You're not having to sit down in a dark room to close your eyes. It's hard. I think I've actually struggled with the actual meditation if I had to sit down because I'm very ADHD. Like, if I have to sit down and close my eyes and like for 35, 40 minutes have to focus on something, it was like torture. But I did it to kind of check my limits, see what is my limit. And I had a very tough— I had a very sassy and a tough Buddhist teacher and he would roast me and my girlfriend, who's my wife now. That's cool. I was not focusing. And it was very helpful because it taught me patience and all that. But eventually I realized the kind of meditation that works really well for me is where I close my eyes, but I'm not trying to force myself to not think, but I'm trying to externalize the thoughts, like what you said, trying to separate myself. So the visual metaphor I have is that I'm slowly rising up, like kind of going up onto the skyscraper, and my thoughts are like the traffic, they're like the moving cars. Yep. I see them, they're mine, but the honking doesn't bother me that much, you know? So there's a sense of separation.

Yeah. Another fun one that I did a lot, I did this thing that I called the color walk, and I would go on a short walk around my neighborhood and I would repeat a mantra, but just colors. So just walk around and in my mind I'm going red, red, red, red. Right. What's fascinating is you notice everything that's red.

Yeah.

And if you switch to green, you notice all the green things. If you switch to yellow, you notice all the yellow things. And it's fascinating if you just do it and like you can go on the same walk, but like you'll notice different things if you do different Colors at different spots. What I liked about it is that I really internalized that what I repeat in my head is what I notice in the external world. Yeah, yeah. And so, it incentivizes me to try to think positive thoughts so that I notice positive things.

Right.

Right? So, it internalizes again, like trying to just understand the relationship between my mind and like how my body—

Yeah. Dude, you know, if I met you in college, we would be best friends, man. Like you have so much of a— you would have so much of a— like we would be like so hippies and like, yeah. But I appreciate your energy. I, you know, love what you're doing. And I want to say, you know, keep being you, you know, and keep rooting for Untapped. If there's any way I can help Untapped in some way, you know, no strings attached, I would love to help. What's next for you? Like, what are you— where's your head at, you know, in the next 12 months personally and professionally?

I mean, I think continuing to do the work that I'm doing at Untapped, you know, finding and investing in great companies, supporting and working with the founders that we've invested in.

Are you still sticking in the pre-seed stage or are you Expanding. Sorry, one question there. Yeah, still pre-seed.

Yep.

One question there. I know you touched on this, but you didn't, you didn't finish, which is, did you evolve the thesis and what is it now?

No, it's mostly the same. It's, it's the same thesis. We're looking for, you know, unexpected founders that we source primarily through outbound. I'd say the new layer is that we proactively build to learn, and that's something we continuously do. Um, I think proactive sourcing might be a little bit higher level where outbound is like me saying I want to talk to you, but also like me building tools in a space that I'm interested in and pushing that out publicly. I think it is marketing, but I like to think of it as like much more proactive marketing in terms of signaling to the market what I'm looking for through my actions. So I'm

glad we got that on the record because I think that is the unique— that is the value prop that I would assign to you guys compared to like 30 other pre-seed funds, right? Like you are doing that in a separate, in a unique, differentiated way that many Others can't or won't, you know.

Yeah. So, but I mean, they can and they should, which is why I do it.

I know that's, that's sort of your philosophy. You're saying like, yes, you should. But yeah, so continuing helping founders, is there a fund 2 coming?

I'm not— I mean, I'm not going to talk about that. I don't— uh, yeah, SEC rules make it hard to talk about future plans on the fund. But yeah, we'll be doing— we're definitely going to be continuing to grow our top as a firm.

Yeah, that's awesome, man. So great to hear that. And so great to see your progress and be rooting for you from the sidelines. Thank you for being on the show. And, uh, I'll see you soon again.

Yeah, great to chat.

Awesome, thank you. Bye.