Great. Well, I am excited to learn more about Dreamers and maybe I could start by just asking you how did Will Smith and Keisuke Honda come together? How did this all get started?

Yeah, so the genesis of the fund, it's pretty, it's pretty interesting. Each of the folks that ran there, uh, both sides, family office. So, a gentleman named Ko who ran Will's family office as a whole Smith family office, I should say, and a fellow named Tashi who ran the Keisuke family office.They had been friends for a while. 

Will's family office has been doing venture investing for over a decade now, um, there are no strangers to, you know, anywhere from seed to series B investments, and we'll, you know, clearly serve as the honeypot for deal flow.

And Keisuke he was basically the David Beckham of Japan. He was this heartthrob for years, and I'm one of the highest world cup scores, et cetera.

and he's friends with a lot of these, CEOs of big corporations over there. And they, you know, would always tell him, we know that you have a pretty active angel fund. You're always looking, you're fairly well connected in the Valley. You know, is there any way that we can get access to the best and brightest that's coming out?

And so they said, this could actually be a pretty beautiful marriage, in terms of top tier deal flow with the Japanese corporate capital. And so, you know, maybe Dreamers can serve as this bridge for bringing corporate innovation or innovation to corporations domiciled in Japan.

And so we finally got it up and running and launched the fund in November of 2018.

And how does a startup best take advantage of this? you know, I imagine Will Smith, doesn't just spontaneously endorsed every product that comes his way. Um, so yeah. Tell me a little bit about the startup, uh, arrangement.

Yeah. So, you know, I guess I would say like our two and, and one thing that, that you would kind of lightly touched upon is that, um, We're actually not structured like will Smith and Casey Honda are both general partners, not limited partners in our fund. Our LPs are all these Japanese corporates were structured like a two and 20 venture fund to try and, uh, you know, emulate how a lot of the great funds operate.

Um, but as for how we, you know, like our two biggest value props I would say is, you know, one, the Smith family has North of 150 million unique followers. Um, there, you know, if you're direct consumer trying to build a brand, they're great folks to have, you know, quote unquote around the cap table. Uh, and they can also help reach, um, a lot of underrepresented, demographics that don't necessarily respond as well to traditional channels that sorta for using to advertise.

 do the startups often think that, do they hope that the, you know, will Smith will be in posting about their product or is that likely not a reasonable thing to expect?

Yeah, it really depends. So number one is we don't promise anything. Um, I mean, we have to be very cognizant of the fact that look like we can't promise someone else's time or energy or force him to, to like a product, um, when he hasn't even seen it. Um, so one is we don't promise anything. And what we really try and do is we say, look like.

W, uh, the Smith family has a whole media empire, called Westbrook where they're building a TV studio movies, and they're doing separate products outside of the outside of the family. and they're incredibly talented. Um, they've hired, you know, some of the best folks from all over Hollywood and even the Valley who have tech experience.

Like sometimes when people come to us and they're like, okay, well we really want, you know, we'll to do this like fresh Prince thing. And it's like, look like.

Let's just see what the creatives around him, you know, like have an idea because for the folks around him, their number one concern is brand dilution. 

And what we try and do as dreamers is just put the founders in the same room as the creatives and let them sort of come to, you know, align on a messaging and strategy and what makes sense. And so. The other thing that I'll also say that I didn't even mention that is, you know, when it comes to sort of having an influencer or a celebrity endorse a product, there's sort of two major components that go into that, there's the talent fee, which can be absolutely immense and likely if you were sitting on the board of a startup and they're like, okay, we're going to pay this.

And it's like, you probably shouldn't use, you know, a 10th of what you raised on, you know, one Instagram spot. So that's the talent fee which we will comp, in, in most cases, as dreamers, the other part is the production fee. And that is generally something that, you know, we're not trying to, um, do a disservice to it, to our own business.

and that production fee can sometimes be in the hundreds of thousands of dollars, even for a 32nd spot. And so, or 32nd or minute, or, you know, whatever it may be. Um, and that's simply just a market rate for, you know, how, how expensive things are in Hollywood and if you want to get it professionally done.

So, you know, I would just say that is usually the productivity has to sort of stay, but the talent fee we can, we can work around. since you know, we're going to be on your cap table.

And so the first I would say, and this sounds so obvious is try to get an idea of what this fund or talent can provide. because sometimes it's very different.  And they're not trying to get involved with, you know, any risque sort of spaces and companies, et cetera. And so fundamentally dreamers, like we're trying to just connect the founders with the creatives and to come to some sort of align on messaging.

But yeah. But it sort of finished. My, my earlier thought is, you know, understand what this, you know, influencer can provide, whether that's intros to other celebs for fundraising help, whether that's posting about your product to bring that, you know, to get a customer to convert and then bring that marginal cost of acquiring a customer to zero.

Um, and fundamentally, when you do have an idea of what they're going to like, really think about how that matches up to what you need as a founder, um, at whatever stage you're at. So if you're pre-product are not yet in market, It probably doesn't make that much sense to do a strategic or influence around until, um, you know, until they can actually bring all of their influence, um, to bear, um, when, you know, and actually post about something once you're in market.

Um, so just to be a little sort of, you know, more choosy about, um, Uh, about when it makes sense. Um, I will say is that it's, it's going to be very hard to get a lot of these things in writing or, you know, sort of agreed upon at the, like the contract level before your round closes. So you'll likely as the founder have to agree in principle.

you know, like outlined some, some high level goals and then work towards achieving them over the coming months and year or so. Um, the other thing that I would kind of say is that in the, in the back of your mind, or in back of the founder's mind is they should always have this sort of ratio of what is this investor's likely value add to check size, because at the end of the day, most influencer funds, they're not leading deals.

 they're openly saying, look like we probably shouldn't be your first call at 2:00 AM when your VP of engineering quits. So, you know, just keep that in mind. Like that's why you have a series, a board director that's taking 20% of your company. We're taking, you know, 0.2% of your company.

So, you know, sort of just keep that in mind. Um, the other thing I'll say before I wrap is, um, Understand, when you are talking to an influencers fund, you know, who is going to be your point of contact there and what their incentives are. So if it's someone from the family office, then likely, you know, like, let's just say the chief investment officer of, you know, a big, um, you know, whomever, they're likely going to be compensated based off of the financial performance.

So they're going to be very heavily invested in making sure that that price per share or whatever they get in, or whether it's a warrant or whatever. That your company continues to appreciate, but if it's the business manager or an agent that introduced the opportunity, they may not see anything, even if your company does really well.

So that can sometimes, um, you know, may inhibit how much they push the talent to get involved with your company when they don't really see a dime. no matter what happens. and then finally, and you know, th this, obviously this is very obvious, I should say. Um, you know, you need to remember that the talent and celebrities, and they're not professional VCs, they're artists or they're athletes, and this is something that they principally do on the side.

So no matter what happens, we have to what you've agreed upon. Now we're down to the line. If they don't have a natural affection to your product or vision, they may opt out of promoting it down the line. So.  word to the wise, I guess when you're thinking about taking a check from an influencer

Uh, and is there an expectation with, I mean, I think you said don't expect it in writing, but. Do you do, 

oh, interesting. and also is some of this like hard to get in writing because are your deals going extremely quickly because you're not leading around. So the person already has a term sheet. Are you in like, tell me about those rounds. Like, are you usually like quick, there's only X, much left and you got to make a decision in the next few days, or how does that come together?

Yeah, absolutely. yeah, you, you, you hit the nail on the head, so prior to, dreamers launching Will's family office, uh, is an LP in entry since cultural leadership fund. And so they tend to send us, several co-investment opportunities and nearly all of which we hit because Andreessen has obviously, you know, they, uh, their name precedes themselves.

Um, but overall these are, you know, really promising companies that otherwise we wouldn't have seen. So, um, when it comes to, uh, you know, we'll, we'll get it. So there's a, there's a gentleman named Chris Lyons who runs the fund. Who's, you know, an absolute star, certainly gonna be in the minus list when, you know, down the line.

Um, and so generally, yes. So he'll make an intro and we'll get this and they'll say, Hey, like, you know, we're investing in this company.  it's usually one of the con the lead consumer GPS over there, Andrew Chan or Connie Chan. and they're like, okay, like they're closing, two weeks from last Friday.

And so it's like, look like, yeah, the first closing is done. Like, you know, the company is like, look, we already have 85% of the round in our bank. Like, you know, we don't. Like we, we, you, you're a nice to have, you're not a need to have obviously. So we'll run a super condensed diligence process.

Um, which really the biggest part of that is trying to leverage as much work that the PR that Andreessen or some of the other funds have already done, um, to get us up to speed and then. We'll run our own sort of, um, you know, condensed process after that. But, um, but yeah, basically it's like, look, first closing is done.

You guys, you know, you all are in the second closing with strategics influencers, et cetera. Um, you know, like let it, this is how much we have for you. Um, you know, one is like, justified, let us, you know, we want to make sure we're giving you the application for the right reasons. Um, and then two, as, you know, while you're by next Friday or else, you know, you don't have to save it for the next round.

And how about, um, how about advice for VCs? Like, should you just have certain VCs you work with or should, should VCs who have a product that sort of fits in your purview? Should we be sending more deals your way?

Well, I think generally we're always going to say, I mean, yeah, I mean, without a doubt, we can always look at, look at more deals. Um, and we're basically just constrained by capital, not by, um, anything else. Um, and especially in this day and age, which, I mean,  in the venture and startup world. Um, but, but generally, I mean, we look as pure-play co-investors we have to play nicely with everyone. I mean, we have no sharp elbows. and th that's actually our whole strategy is that like, think of us. Um, you know, when you're thinking about putting a round together for all of these reasons, whether you want, and it's not just will, I mean, he's obviously a force in his own, right.

But his wife, Jada, I mean his kids, Jayden Willow, I mean, they're each. You know, becoming icons in their own right. And appealing to very unique demographics too. Um, Jayden is obviously a climate change stalwart, um, you know, Willow appeals to sort of more independent, uh, you know, people that are creating their own way, their own path.

. so yeah, so it's, it's basically, it's trying to stay top of mind. there are so many great funds out there I'm sure we can both agree. We're living in bizarro world right now and we just try and play nicely with all of them and yeah. Keep trying to get, uh, allocations wherever we can.

Well, that's, that's useful to know. Um, when you said in this bizarro world, like my mind went to like five different bizarro things. There's so much bizarre stuff. Cause one of the things that's fun about this life, um, what did you mean by bizarro? Um, times where it.

Yeah, it's true that there are a number of ways I could take this, I guess, you know, we've never before I've never before seen valuation. I mean, look, I think I'm pretty sure every year, since, you know, like Don Valentine, uh, was, was, was actually investing. Everyone's been complaining about how high valuations have become and you know, all the rest, but here we're at like unbelievable amounts where the.

The scuttlebutt I hear of, you know, tiger global dropping a blank check into a founder's hand and saying, if you, you know, write whatever you think, valuation term sheet, rather, you know, whatever you think is fair. And if we agree, we'll sign it. I mean, I've never heard of anything like that. So that to me seems unprecedented.

Um, obviously I have a, you know, much longer I have a lot to learn and, and, and hopefully I'm just in the early beginnings of my venture career, but. It really does feel like something's off. And obviously there are all these macroeconomic, you know, we've plowed in trillions upon trillions of dollars in the last 12, 15 months or so, but something feels off, I would say.

Um, yeah.

Well, here's one for me. So I grew up, on the Caltech campus and then I studied computer science and it's weird for me to overlap some with Hollywood now. And so that feels bizarro. and so can you give me the perspective of Hollywood looking at tech and do you think it's the, the Hollywood folks see that tiger global is dropping hundreds of millions of dollars or what's the, where do you think the overlap is coming from?

Yeah. So we, that I noticed when I first moved to LA in 2018, um, and just as I started, you know, networking and making my way and I, and I found myself kind of getting pulled and certainly there's like, you know, great tech and venture funds and all sorts of fantastic companies out here. But then all of a sudden I'd see all of these.

You know, um, people at influencers or something they're like, Oh, you know, will Smith's venture fund. Okay. Yeah. Like, you know, I want to do this. I want to do that. And as I've come to realize is. And, and this, this certainly happened, you know, with the rise of Netflix and over the past, maybe five, 10 years is there were a lot of, um, uh, I'm trying not to make these broad sweeping generalizations, but there are a lot of, uh, several founders that had sold their companies that made off, you know, really, really well yet.

You know, for whatever reason still couldn't find a date on Bumble or hinge or something. And, you know, their IQ was very much overpowered their IQ. Let's just say they were now worth $250 million. Um, so all of a sudden they're like, okay, well, I can just, you know, come 250 miles, you know, South come to Southern California, come to LA and it's like, wow.

Um, I can, you know, go to West Hollywood and I can basically live my dream life that certainly was not capable, you know, up in PAC Heights. Um, so, you know, and then, and then, and it certainly speaks to the grass being always green on the other side. The other thing is that I found some of these, you know, influencers and celebs that who, you know, they'd get a ton of exposure there in some of the most popular series.

They're on the covers of magazines yet. They'll look at, you know, they'll like take a smidgen of wall street journal or something, and they're like, wow. Like this person is worth, 50 to a 100 times more than I am yet. Like, you know, I'm gracing the cover of these amazing magazines with crazy distribution reach.

I'm like a global, you know, global visibility yet. I'm making 50 times less, like maybe I should be doing more on the tech side and investing or something. And so, um, I think that's, you know, maybe spawned some of the, um, the overlap between Silicon Valley and Hollywood.

I agree with that. So there's just money flowing in the tech startup world. I also think both sides sort of fancy themselves as creators. And do you think that, um, you know, there's all sorts of influencers getting into tech. do you think that there's good ways for startups to sort of leverage that? Like, I don't really have a good sense of how much, how much it moves the needle when influencers start posting or not posting, or what are your thoughts?

Yeah, no, no. I mean, it's, it's certainly something that I think we'll, we'll be reading about. maybe in a year or two as to startups that gave a lot of, um, you know, maybe they invested too much in influencers and I'm not even saying this is necessary celebrities. Even there are plenty of influencers that, you know, The average, you know, someone in Kansas doesn't know, but it has plenty of millions of followers.

Let's just say, um, you know, it's a really good question. I think time will, we'll have to see. And, you know, generally they use a lot of the same advertising Mar uh, metrics as to like, you know, how many more eyeballs and impressions, what does the conversion come to? how do we sort of attribute that maybe we should just be giving a discount code as opposed to letting it says it's supposed to measuring on like a CPM or eyeballs.

 The other thing that I'll say that's really happening now is like the innovation financing. So, you know, Mr. Beast, and night media, and I think even slow ventures, Sam lesson, you know, they're actually like, look like we actually want to take like equity, stakes, uh, I mean a synthetic approach, into some of these like, You know, emerging influence emerging creators.

I should say I emerging influencers or whatever you wanna call them. Um, content creators really, because there is, I think, a difference between a content creator versus an influencer. Um, and I think that is actually going to be is a really important innovation. And that's something that will actually maybe change the game.

of course this is also investing in them versus you versus, you know, using them for your own startup. But, I think that's where a lot of the innovation is going in this, you know, newfound on sort of creator, passion economy.

I'm not totally sure. I know what you mean, which is you said it's a synthetic approach. 

Yeah. So I, I, I believe, and I think they're still figuring this out is to basically kind of like an, it's almost like a, some kind of hybrid, and this is also my own understanding. So I could be hilariously wrong about this, but is to basically take like a, um, some kind of stake into their future earnings.

Um, or some kind of like, It's one thing to like future earnings or it's like, okay, I'd rather, um, and th th there is a Silicon Valley company called Pando pool, um, or panto pools, which were just basically doing this. It's kind of like, it was meant for entrepreneurs or even like young athletes, like in the minor leagues, they would basically all commit.

We're going to commit 10% of our salaries for the next 10 years into this pool. And we'll split it up. After 10 years. and so obviously you're hoping to, it's just one of it. It's like power law and venture, you know, you're just hoping one of them becomes a superstar and all of a sudden, everybody, you know, makes off pretty, pretty decently.

I think it's a very similar approach for these influencers only. You don't have an or creators, I should say, except you don't need to be a creator. You can actually be like, you know what? I know there's someone, I, you know, I'm standing them on Tik TOK. I know they're going to be huge. Like if there was a way that I could invest in them or invest in their future.

You know, growth of, of following. I would, and, and I know they're going to be, you know, like a future brand ambassador for all these brands, you know, all these companies, et cetera. And so they're trying to basically create a vehicle to do that. And so very much in the early innings. And again, this probably creates all sorts of weird, you know, sort of conflicts, um, because actually this same approach was actually banned, I think, in Brazil and some other popular soccer countries, because people then took this approach and they were like, okay, well, I'm just going to start invest, like, you know, funny and then like 12 year olds, you know, these like top young stars and it's like, okay, like, this is, this is actually kind of perverse, um, is not worth trying to do, but I think that's coming, um, maybe in a more mainstream, uh, and an appropriate approved way.

I couldn't decide whether it sounds like an NFT or like an income share agreement.

 I think it's more on the ISA, part, but, um, but who knows? I mean, it's like, yeah. Makes, I don't even know what an NFT mixed with an ISA is, but I'm sure we'll see it in YC. Like, you know, this winter or something.

yeah. Raising at a hundred million. pre-launch but, uh, you keep making this distinction between influencer and content creator. Is there a, a high, like, is it, is it content creator uh, more pure form or something because they're actually creating something or what's the distinction you're making.

Yeah. And, and, um, I think it was the CEO of Patrion that actually, that really espouses this view and, and who I anyway, I took this for him, so I wanted to make sure to cite the source and, and really just the, um, yeah, the creator of this, um, sort of distinction, um, is that, you know, I sort of, and I think the industry kind of looks at creators as more authentic and identifying as artists.

And that's something that we think tends to resonate a little more with gen Z versus. Influencers who kind of identify more with just like marketing and sponsored content and resonates maybe more with millennials if we're splitting it up by, by demographic. Um, now certainly there's plenty of overlap on both sides, but I think you can tell one from the other based off of,  honestly probably based off of the economics of where their money is coming from.

Um, because creators are doing things. Not you solely Mo you know, incentivized by, um, you know, brand or sponsorship dollars, whereas influencers, it's hard to sort of tell that difference, which is why we may see their actual quote unquote influence, you know, Wayne. Um, if people know it's not that authentic, 

isn't actor like willsmith fundamentally started as an actor. An actor is not really, are they a content person?

Yeah, no, no, it, I mean, it's a great question because now we're introducing all these new terms and, 

I think he's a content creator. And if you look at his social media channels, the things that are a lot more, uh, spontaneous, um, that come on Instagram or Snapchat. Tick-tock et cetera, but, um, anything where there's a budget of, you know, a hundred million dollars it's, uh, I wouldn't say he's like necessarily creating, you know, it's hard to find, say anybody as a content creator when, when you know, they're like 10 zeros after, uh, after the budget,

Okay, so I'm going to go back to investing. But one more question. I'm just celebrity. Cause it's, it's interesting to me, as I said, I grew up in the computer science department. Um, so like, do you interact with some of the other influencers? Like the, is it is Jesse's fund, is it mercy ventures?

Marci venture partner. Yeah, we are. Sorry. Yeah.

Yeah. No, no, no. How do you interact with the, how do you see the ecosystem?

Um, yeah, no, it's, it's a good question. We tend to eat. So we see a lot of the same folks, in similar deals because generally when people think of will and his influence, I mean, obviously there are plenty of other Chasey, Serena Williams, Serena ventures, and other great fund we've, we've, co-invested with a number of a number of times.

yeah, it's w we see them all the time and it's funny cause we all know sort of what role we play in the venture ecosystem, which is. most often than not and night, I hope I don't have to like retract this, but I think we all kind of recognize that we're a nice to have, not as much of a need to have on a company's cap table.

and I'm not saying because a company is B2B SAS, so obviously they don't need an influencer, but more of like. Look the top 10 or top 20 venture funds. I mean, they bring a very serious value add. and so like we have the same, um, the reason we don't lead deals is because any deal that would take a term sheet from us, we probably shouldn't be investing in because it means they probably, you know, a hundred other funds may have passed or maybe they're just not realizing what all is out there.

so the Andrew question. Yeah, no, w we know all of the, Oh, we know, we know a lot of the other celebrity influencer funds. We're always happy to talk to more, especially in, we, we certainly counsel a few that are thinking about starting like, you know, a venture fund or venture arm. this is a lot more complicated than just, you know, putting, like getting free warrants or something for doing a brand deal.

but yeah, but I think even just to finish that point is, you know, with this early stage value as perceived to go back to what tiger is sort of doing, uh, and it's like, I don't want to say it's disrupting venture, but it's certainly crowding out. It's putting a lot of our friends on the growth stage and later stage, you know, on, um, you know, they're like kind of like shaking in their shoes because tiger is basically saying, look like, not only will we beat you on valuation, but we also will take an observer seat.

Like we recognize there's not as much value add as maybe as bandied about when, you know, at the stage that you're at. So, you know, really it's sort of, um, yeah, I'm glad I'm not in those shoes. Let's put it like that.

Interesting. Um, another thing I don't see, and again, I'm an earlier stage. Uh, so I see entire global as you know, it's markups for me most.

no about do yeah.

I also don't see warrants all that often. So you've referenced warrants a couple of times. How does that come into play? And do you think it's different that get the seed stage?

We don't see warrants.

Right. I think warrants are a good tool. Um, I mean, you know, traditionally they've been used as the sweeteners and deals, but I think it's a, it's a way to actually hold talent accountable, for the founders. Um, and it's also a way for, for talent to also say, I think it keeps both sides. Um, accountable.

I'll say, if you can sort of tie those warrants too, if you want to traunch it out into like different milestones. So that like, okay. Like I know, you know, we had in principle agreed upon, you know, one Instagram spot or something. So maybe when you are hashing out some of these things you can say, look like we will, you know, try and aim and get warrants to this dollar equivalent, to this dollar amount.

Um, you know, assuming you do it by this date or something, because going back to, you know, something that maybe I had, or both of us had said, is that. At the contract level. Um, like if you have to do anything commercial with these folks, it's going to take forever and it's year round is gonna be closed far before then.

So, um, I think warranties are actually a good tool for startups to use when they are thinking about bringing out an influencer.

That makes sense. Makes sense. say move off influencers. Is there anything else interesting there?  like when you guys share your tips, are there any, you know, you're talking to. Marci venture partners or anyone else. do you have any advice for those funds when they're getting going?

Um, yeah, I think, um, when we are counseling and Marcy has been around, for quite some time and, and, um, you know, one of the guys that runs it, Larry is, you know, he's, he was at Walden for awhile. He's. You know, as a seasoned investor, um, for a lot of folks that are just getting into venture and, you know, are, enamored with, you know, the sexy name.

I mean, obviously this Coinbase IPO or whatever, they're like, great. Like let's invest in crypto, you know, how can, how can this go wrong? Um, you know, one is trying to understand or help them understand that like venture is largely about power law. you know, like you're not going to get rich from this overnight markups are meaningless unless you're like properly secondary now.

I mean, there's sort of just like a general finance education, uh, as part of it. Um, and the second is basically saying like, look, there are ways that we, you know, we think that you can generate alpha. despite the fact that, you know, there's this glut of capital and, you know, you need to be ownership sensitive and all these things and.

And fundamentally that's based off of our own sort of thesis, um, which is that there just, there are alternative models creating a top Cortel fund besides taking your traditional, you know, 15 to 20% ownership and maintaining and defending that through exit. Um, so I can go into that a little bit. I wanted to sort of answer that, is that basically saying like, look like.

You can win in venture, but you just need to dedicate resources. You have to understand that you have to be incredibly long-term oriented 10 years might as well be a millennium when it comes to, you know, someone who's in design guys now, but you know, could be a has-been by then. so all sorts of books, like things intrinsic to venture and startups.

Um, and then just like, Hey, like you're actually in this, like, you know, like really interesting point in time, which may totally vanish. Um, so, you know, kind of like act on it.

And how do you think about your portfolio construction? In terms of ownership and holding

Yeah, man. This is something that we think and talk about all day, every day on our group telegram chats and 

exciting, how

yeah, it's a really, I never thought, you know, once, you know, you're at the point in your career where you, cause I kind of have the rains and you're like looking at all this ownership and you're doing modeling after modeling.

I mean like I've tried doing Monte Carlo simulations it's horrifying and embarrassing, uh, for so many reasons. But, um, yeah, I think it's the hardest thing. Right. And when I talked to, you know, really like much smarter, much more seasoned investors, so does yourself and others who, you know, have been like informally counseling me, you know, they're like, look like this is the hardest part.

This is like where you put your, big person britches on. yeah, no, it's, it's really hard. I mean, we've done 65 deals in the last two and a half years. anything from done a tiny bit of pre-seed to series DS and valuations anywhere from literally like, you know, 7 million all the way up to, you know, dapper labs at 2.6 billion.

And it's like, it's so hard. Um, because we're playing a very different game than this, you know, taking 20% and hoping for a fund returner. It's like, no, no, no, no, no, no. We like, I have this joke of a column on our portfolio model. Which is like exit needed to return the fund. And it's like, okay, well basically they all need to turn into Coinbase, um, to some extent.

Um, but, but really, but what we're trying to do is, is like, we know that our, because we're trying to co-invest with a lot of our, you know, usual top tier funds, we know our hit rate may be slightly better. Um, but we know we're never gonna, you know, have the ownership necessarily for these. These these investments to really hit the moon.

And so fundamentally we think  the ceiling on how much we can return is certainly lower than any concentrated seed fund, um, and probably rivals of fund of funds. Um, but hopefully our. probability of getting into the Kerry potentially meaningfully is, is higher than a, than a concentrated fund where if you don't have fund returner, then you're almost certainly a bottom core tile fund.

Uh, so yeah, so these are the things that we're, and, and really the biggest thing for us is like, how do we manage our follow on reserves? You know, we have, we have 65 companies, let's just say 30, or even, you know, 15 of them make it through, like, how do we do we just do a million per. Do we, you know, and then we gotta figure out what we think is gonna exit ad and, you know, just opportunity costs becomes higher and higher.

Um, the less money there is, and the more opportunities there are. So yeah, it's, um, it's a daily struggle with, you know, how we should be allocating the rest and, and soon we're going to go into market for fun too, but it's a whole different conversation.

Yeah. Um, so, so on investing, you said you know, you don't, you're not a thematic investor, but can you just choose a couple interesting examples, illustrative, examples, I guess, of investments you've made.

yeah, so we're a hundred percent not, we're a hundred percent opportunistic. Let's put it like that. We're not like thesis driven. Um, yeah, we're not the Maddock. We're just trying to co-invest with the best in companies that we think have, you know, groundbreaking potential. Um, and we do have some, you know, we're certainly very proud of like some of our more notable investments, clubhouse, dapper labs.

but then we also have a couple, that people maybe didn't know about it. We were, in a lot earlier. so one is called play co just formerly known as game closure. And this was, you know, it's an interesting story because they raised the first round of financing in 2012 and they did have a who's who it was benchmark Greylock, I think general catalyst, maybe CRV.

Um, but you know, this was like eight or nine years ago. And so, and it took them years to develop their product and they were trying to do in browser gaming, using HTML five as sort of their first, uh, as sort of their first product. And so, you know, there were a lot of hiccups, obviously in the product development, they raised, you know, a number of different convertible notes along the way at various caps.

And, you know, finally I think it was October, it was pre COVID, but you know, maybe like October, November, 2020, when they finally turned on monetization and. It was something, it was like orders of magnitude higher than any other growth. You know, I think any of us had ever seen, in his, and so we were like, Oh my goodness.

And naturally they ended up getting a term sheet from Sequoia, Justin Waldron. One of the co founders of Zynga ended up joining and, you know, just goes to show like they were truly in this like trough of disillusionment. all their earlier investors were like totally tapped out. And it wasn't something that they lost faith in this a year ago.

You know, these are investors from like eight or nine years ago. They were like, look, obviously this is not a venture. You know, this is not following the same trajectory. So they turned it around, became a unicorn. you know, just goes to show all of that hard work, all those employees that had stuck around for so long grinding, you know, it's certainly paid off. 

. and then the last thing I'll say, and this was probably my, this is like the highlight of my life I would say is, is what, what, how we ended up concentrating our investment in the boring company.

Um, so one of your other guests, da Wallach, a good friend of mine. We both grew up in Wisconsin, um, you know, made the intro and. And he was like, yeah, like just go to a space X headquarters, you know, like Wednesday at like 10:00 AM. and like, there's going to be some presentation, just like, you know, get more info.

And I was like, okay, cool. So, you know, we walk in and, you know, there's a few of us and I'd never met a lot of these people. there were very few of us and, you know, in this, in this room and all of a sudden we see, uh, they finish up space X board of directors meeting. So every, so, you know, these folks come down.

Again, like as seasoned as you get, I'm talking to a guy that had taken 25 companies public and I'm like, Oh my goodness. Like, Hey, like I, you know, it's like, I just learned like what full ratchet means. Like, you know, it's like, that was like the level I was at. Um, so, you know, one is, I, you know, I have these like venture superstars around, um, Steve Jurvetson and David, um, David sacks from Kraft, et cetera.

Um, and then finally, and I honestly I'm expecting somebody from the management team, from the board and company to come in. Instead it's Elan and he's at the front. I mean, literally like any other pitch that you would see presenting to a partnership or something at the front, you know, with his little clicker going through these slides.

And it was like, I can't believe this is happening. and he was taking questions, I mean, and it was like incredibly, it was like, look obviously. He runs two immense companies and he's still pitching us and he's still like trying to persuade us as to why this is going to be the future. And he laid out some really interesting points, which I can get into, but, um, don't want to keep this, keep answering, you know, give a more long-winded answer than I already am.

But, um, but yeah, I mean, it was just. Yeah, for me, it was so jarring because it doesn't matter what level you reach. You're always even, you know, you're going around hat in hand, you're still have to do the pitch. And it was like, he, he doesn't think it's above him or sorry, beneath him rather, um, you know, it's part and parcel of, of, you know, co-founding a company and, you know, we ended up doing the test, you know, underground in the Tesla, under the Hawthorne airport and everything.

I mean, it was incredibly cool, but ultimately the tech was really validated and. Just to, in terms of how he was walking us through how we, you know, how we got to coming up with this company and attack and everything. I mean, it was like, wow, this, I mean, this is like the King Midas of, um, you know, of inventors or, you know, startup founders, et cetera.

So, um, yeah, it was, um, highlight of my life, I'd say, or, or venture life. Yeah.

That's so the chance to kind of hear how his brain works, right?

Yeah. and especially because he's, he was as in the weeds with every aspect, uh, any, and he did have somebody from the senior management team there to like, you know, sort of like make sure that, you know, he's not saying anything off, but I mean, he had a command of everything we were asking from. Um, you know, why it's actually safer to build, you know, whether like, whether it's like a hundred feet underground or something like, that's actually safer to be in an earthquake than actually on the surface, because you're worried about all these falling buildings and rebel and all these things.

Um, the fact that like the plates, like the tectonic plates, I'm sure I'm like totally butchering the science behind this. Um, you know, yeah. That was one. The other interesting part was, you know, he knew about all of these laws, how. When you own a property, it used to be that you would actually, the property would extend from the center of the earth all the way until the heavens and the sky.

And it wasn't until the national airspace system, when the FAA was formed, that they were like, okay, actually it can only be like 500 feet above ground. And it turns the national airspace, but technically it's still, um, you know, you still technically have it until for some immense amount. It's not immense, but like some really deep, Amount of ground that you can keep digging into, which is why there's all these eminent domain issues that were coming up.

And he was like citing like court cases and all this stuff. And it was like, you know, he's also the CEO of gigantic public company and this rocket company whose offices we're sitting in and he's just like, Ain't no thing. He's just like, yeah. I, I also, you know, I know everything and it was, um, not, not an overconfident way.

I mean, it was, he still had that, you know, humility of like, you know, this is a huge opportunity. Like you guys gotta, you know, you got to get behind me and was like, we're all behind you. Like you can, you know, do whatever you want, where there's a check waiting for you.

I mean, I guess I kind of had the same thing with will Smith. Like, I guess you've interacted with him. Is he like a normal person? Like he's sort of so larger than life to me. Does he exist for reels?

he really does. The, the weird thing is that. on screen. And so, you know, I grew up watching fresh Prince and so like, you've seen it and like, his smile is so big. I mean, you, you kinda just feel like you're just so safe around. You're like, Oh my goodness. Like nothing can happen because I'm in the company of this, like larger than life human being.

Um,

here's my embarrassing thing might compete. My browser froze for part of your answer. I'm

promoting. It was my God. You only came back for this smile that was larger than life. It was such a great moment to come back to,

I'll just repeat it. Yeah, of course. No, of course, of course. Um, yeah, no. So will, is ease an absolute force? I, yeah, he certainly has had the good fortune of interacting with him. the, the weird thing I'll say is that because he's been in the limelight for 30 years, you know, having grown up, watching him and fresh Prince, I mean, as a rapper and all these things, like you feel like, you know him intimately when you definitely do not, when he does not know you intimately.

And so, and it's not just because of, you know, all this information that you, you can read about online. And you've seen all these movies, but it's like, you, you just feel like it's like an old friend and when it's like, Not the case at all, but yeah, I mean his, I mean his smile, he's incredibly, it's like if you've ever had the chance to like, understand why, you know, former presidents get to why they were like all these politicians, anybody in huge positions of power, how they just, they make you feel like you're the only person there, or they're just like larger than life presence.

Um, he certainly, exudes that, you know, to a T.

That's good. I'm glad it's not all just an act.

Yeah. No, definitely not.

any other advice that you give founders? Um, or maybe you're not in that role that much, but anything else you think founders should know?

Yeah. The, the sniff. Yeah. And it's this stuff that we say that we try and be a little more unique than, you know, your traditional venture is, you know, one is that. Um, and, and we really do. I really do mean, as I say, it's even just to like my mentees, even in venture and it doesn't matter what side of the table you're on, but like, One is just run your own race.

you know, I kind of think, especially in this bizarro world, like you're. The grass is always greener. There's always going to be someone younger and smarter. That's raising a new round or just got money from a top tier investor. And it's there more reasons than not to feel down about your, your company's prospects or your own win if win if you're job hunting or whatever, but, you know, run your own race.

Um, I think is the biggest thing that even I think about when I'm like, man, like maybe I should be, you know, a much larger, all sorts of other things. Um, the other thing is, and this goes very much right. Alongside is like, try is, even though it's probably maybe even a little bit necessary to be, you know, a lurker or even like a participant on Twitter, like try as hard as you can to not fall prey to the echo chamber or like what's going on on VC Twitter, and like don't mimic what everyone else is doing entirely.

Um, it's fine to. Keeping a pulse on the market, but like, certainly don't get into tweet storms or like, you know, these flame Wars with, um, a bunch of trolls, because there, there are more trolls out there that, you know, there's kind of like in sheep's clothing or something, um, that we've probably seen with all of our, you know, venture investors who we didn't realize were armchair epidemiologists and, you know, were, are expounding about our T less than what ours, you know?

And it's like, Last I checked. It's like your PhD was in like electrical engineering and like, you're not an MD. And anyway, so, you know, I'll try not to, um, sort of belabor that point. Um, you know, I think everyone needs to understand luck is an outsize role and most, but not all outcomes. And then I, and I think, you know, even for some of the, the really, you know, I'm sure you have an incredible following, but like, I, you know, I remember, and I've said this a lot to some of the folks that we found is like, you know, take the calls with the associates, but.

You don't pass them to a different teammate. Um, you know, except the conference speaking gigs, you know, to, to build up the brand for your own company. Um, but make sure to line up other meetings at that conference. And if you can't or if it's not worth it, then send a teammate. So like try and. You know, maintain as much of your brand and do all the things that a lot of other CEO's who I would say maybe are wasting time, uh, doing, but like, there are ways to sort of, you know, check both boxes, um, while not alienating a junior investor or like, you know, while not skipping out on too many of these, you know, parts of the speaking circuit where you can just send someone else a team who would love to have the opportunity to do that, who can still tell the same story as what you're spinning, um, and sell that vision.

Um, so yeah, I guess I'll probably stop it there. 

I think the grass is always greener is all of your thoughts ring true. But, um, you kind of from the outside seem like you have the coolest job. So, um, how did you end up in this job?

there's one thing that I love about venture more so than any other parts of finance in that they are incredibly forgiving of backgrounds. So I spent the first half of my career five years abroad. Um, after college I was. I, I mean, just like a total, you know, wayward, um, sort of post-grad I wanted to save the world and do all these things, but like I had barely anything to offer.

Um, but you know, somehow found my way. I spent about a year and a half in Eastern central Africa, um, working in public health, uh, social entrepreneurship, three and a half years in Haiti working for the Clinton foundation, the government down there. you know, working for a failed state, you know, doing work on their HIV program after the earthquake.

I mean, it was like as far from venture as, as possible. and then ended up going to business school, which basically. You know, I didn't know what a balance sheet was when I entered and was just super fortunate to get exposed to a bunch of different opportunities in finance, and somehow found my way into a venture role coming out of school at a FinTech InsureTech focused corporate fund.

And then, the very same, gentlemen that introduced us, da my close friend from high school. he had known that Will's family also was trying to spin out this fund. They needed somebody to really help, um, you know, come run it and. That basically. And I was initially very suspicious cause I was like, you know, I don't want to be at like a family office officer.

And he was like, no, it's two and 20, like their real LP is, this is like a real opportunity. And yeah, and it's been super fun. I mean, I've been extremely privileged to meet folks such as yourself for, you know, for her inviting me onto this podcast. Uh, plenty of others. I mean, I'm joining at a very illustrious group.

Um, but yeah, no, it's been super fun. And, and now, I mean, the other side, as you were saying, it's like the coolest job, but like fundamentally it's like, you know, I want to be a venture investor. How do we. Make the numbers work. Can we prove our, you know, the one thesis that I will say we have is, you know, are we going to be able to prove that there are alternative models of becoming a top Cortel fund without necessarily taking, 15 to 20%, ownership?

And so is there a different playbook? Uh, that's coming out. And so we have a couple, um, you know, we see some things that are happening in the market that we're, that we're happy about and all the rest, but, you know, fundamentally, if you know, we got to prove this out. Um, first and foremost,

Yeah. I mean, uh, raising, raising venture funds is hard and, uh, you know, even if you've got will Smith and KCK Honda on your, as in your partnership, um, uh, I feel like I am. Yeah, I think that was a good amount that we covered. So I might. Is there other things I, I, I, this would just be edited out, but I was served.

Are there other big things we should talk about? Da wallet, just being incredible. Of course. That's how you ended up here, Vik.

of course. Right. Um, yeah, I'm trying to think. I made sure to, you know, take notes on it from our, from our prep call and I tried to cover everything. Sorry. I know it was long-winded in some of these,

no, no, it's great. There's so much here. That's why I actually felt like I could wrap it up. In fact, I didn't even think of how I was going to wrap it up other than, um, Saying, thanks for being on the show, essentially.

Yeah. Yeah, no, no, no. I, I think we covered all the, um, things that we wanted to, um, I'm trying to think of what else and I mean, obviously like, you know, I understand obviously, you know, I th I think we hit the influencer celebrity side, um, pretty well.

It's pretty interesting. It's still interesting to me. Like sometimes he was one of my theories is that being known for your boobs is less like satisfying than being known for being, you know, starting a search engine that provides information to the world or something.

Right,

And so there's some, like, I'm a celebrity.

Sure. But I'm a celebrity in a bathing suit is not as cool, but it's still pretty cool. I don't know.

It is, um, yeah, for us, it's like, we also want to prove, like, I mean, as I was just saying, yeah, we have to prove. And th this is like some things, like, sometimes I was kind of getting tripped up cause I was like, how much of this can I reveal versus like, you know, like, like there were numbers that I was going to throw out for.

Play co and pan Gaia. Um, but then I was like, shit, like I can't, uh, publicize their ARR and stuff. Um, but yeah, no, it's, it's really interesting what's happening in the market. Um, I just hope we can make this, I mean, look, as you were saying, we love markups. Like think like a year ago I was like shaking in my shoes.

I was like, There's a reason. All of my mentors were like, you know, you got to be judicious about ownership and valuation sensitive. And I was like, you know, whatever, like, you know, okay. Boomer. And it was like, and now it's like, you know, the shoes on the other foot, but I love markups. But, um, yeah, we also think the music's going to stop in the next seven and a half years before fund one.

And so it's like, yeah.

Right. And it's a bummer if like you've chosen a ton of, you've made a great like portfolio of investments that do well to get markups. And yet the ownership, the, you know, you know, your Mar Monte Carlos don't play out or something, that

Totally. The other thing. Yeah, no. And the other thing I was going to say that I, I, I th I don't know if I've said this, uh, like on a, on a separate, like publicly, but, um, part of it, you know, is like, look, there's no very unabashedly, like part of it is certainly logo shopping, but, you know, we know a lot of big funds that when they were first starting out logo shop too, or, or really paid up, I should say kind of what Tiger's doing now.

Um, and so part of that is like part of our strategy is to prove we have access with fund one and then made with fund to try and leverage it and get an early you're like write bigger checks. I mean, it's the same formula that every, you know, fund two or three is, you know, doing the same learnings that we knew about.

But I guess we had to experience that for ourselves. So yeah, hopefully we can make this happen and also see, find a point where like our strategy won't scale past a certain fund size. And so that's the other thing that we're like, Figuring out as we pitch is, you know, um, is a hundred, the right number, you know, for fun too.

Or maybe we carve out a bit for emerging manager fund of funds, all sorts of stuff is running through our mind. And so

Uh, yeah, yeah. Fund the funds. No, we're not really. Uh, yeah, that's interesting. Um, okay, cool. Let me just say like ViK, it's great to have you on the podcast today. I'm excited for dreamers  📍 VC. It sounds like founders or VCs, might be interested in approaching you.

Yeah, absolutely. 

If there was one thing that if I had a magic wand that I could make go away is the importance of a warm intro So, we respond to every single email. it's Vik vk@dreamers.vc please do shoot me a note if, if whatever's on your mind. Um, but yeah, we totally respect, you know, what, like a founder works a billion times harder than a VC. So the least we could do is, you know, write one line to, you know, respond to review a deck or, or whatnot. So

Thanks for having me.

Real quick. It would be great. If you could spare a moment to give the podcast five stars or share with a friend Or I love getting emails. Send me a note, minnie@tenoneten.net. Thanks.