Happy to tell it.
I mean, let's stay on that, the more interesting one, which is like asking people, like, do you feel like you've gotten better at asking good questions and really drawing people out and like getting their stories either on the podcast or just in life?
For sure. I, when I think about some of the early interviews we did with the podcast, similarly, I was Nervous about the narrative and kind of framing the story.
And, uh, we've done the Origins podcast actually for I think six or seven years now. Intermittently, we kind of take breaks, we get tired,
Although I have it now officially a co-host in Beezer Clarkson who's one of our LPs. And. That's actually been really fun to have a collaborator in it.
I forget what the
well, it was like good questions.
The questions I asked founders have definitely changed over the years. I care a lot more these days around the. Driving forces behind the why for them of starting the company. And I think back now, many, many years, and probably most VCs feel this at the very beginning I was, I started at Betaworks, I was and was running the seed investing business there relatively shortly afterward.
Partly because left who had been running it. So I was kind of, thrown into it And in the early days, a lot of it was just driven by social proof. So, at the timethe seed investors at the time were firms like SV Angel and.
Lair. We actually shared an office at Betaworks with Lair. Kenny was the chairman of Betaworks. Thrive was just getting started. It was a very small community of seed investors. We would all share opportunities and a lot of my decisions were just driven by who else was doing it, quite, quite frankly, um, which, just meant I had much less conviction then than I do today.
Now. Now, I quite frankly could care less around who else is investing. And so what I think a lot about now is the reason why the person is starting the company, their past experiences, why they're well suited to do it. I really love products and companies that are too early for a market, so I'm looking for things that are fundamentally new. And I have a much clearer sense of, what that looks like. Like if it was up to me, I would build a portfolio of 25 to 30 companies that are way too new in markets that don't exist. And a few of those, the markets hopefully appear in the next 6, 12, 18, 24, 36 months.
Those will be really big companies. So if I could build just a whole portfolio of that,
whole, like what's a good example of that?
A very good recent example.
We co-founded one company since we started notation. It was a company called Bison Trails, which is the first institutional grade staking company in crypto.
And the difference between Bitcoin is a proof of work mining. It. It's basically a consensus mechanism that is proven with machines and infrastructure and hardware.
My partner and I, and actually the co-founders of Bison Trails, before we started that company together, we built a Bitcoin mine in Oregon. , which we still run to this day. And what we learned through that is how damn difficult it is to build out basically a data center and run infrastructure and keep that running.
What was very interesting about Proof of Stake, the first two protocols and proof of Stake were a protocol called Tezos and then Live Pier. And we were investors in Live Pier. And what was very interesting about those protocols was that they were really driven by software rather than hardware.
So the consensus mechanism meant running infrastructure in the cloud. Verse physical infrastructure that you were building. We were together as a group running some of the largest nodes and infrastructure on those first two proof of stake networksAnd what we realized was that we could actually productize that activity and that we.
We felt pretty strongly there would be more proof of stake networks in the future. Now, basically every single new crypto protocol is proof of stake. At the time, this was 20 17, 20 18, that was less obvious. So we felt like we could productize and we felt like there would be a much bigger market for that product in the future. And when we built the product and launched the product, the total market size was probably like 10 customers.
probably mm-hmm.
uh, it was tiny. It basically didn't exist the market. Our bet was that it would exist in the future very quickly, faster than I think we ever imagined.
Many more protocols began to launch Proof of stake protocols.
And all of a sudden within 12 months of launching the product, a huge market
Well, that's perfect.
appeared. Appeared. And and, and bison trails was effectively the only product in market.
We went from zero to 30 or 40 million in revenue in the first 18
only thing. Yeah.
So
those are my dream investments products and companies. Now, the market rarely appears, right? So you have to be comfortable investing in niche products and markets with the idea that they will always be niche.
It's very rare that you can time things just right. Yeah. And the market appears overnight, but to me that represents really the best non-consensus way of investing at the precede or the earliest stages. I am not looking for the 27th Neobank.
I am not looking for your next vertical SAS construction company that has a new workflow method and is going to strap on payments to it.

And when you said you're, you have to be comfortable that they could just remain niche and not be huge from your portfolio, like, you know, as an investor, are you thinking I'll just have a few that are big and those will just kind of not make it, or are you like, actually they're, they're, it's fine to have some sort of base hit double type investments.
Few thoughts on that. So we're on our third fund now. we started notation in 2015 and. One, we have small funds. I am a very firm believer that small funds outperform that discipline matters. And so our first fund was eight, our second fund was 28. Our current fund is 45. I don't think we'll get bigger. If anything, I think 45 is probably like pushing the limits of what I think a good precede model looks like. And so you don't need multi-billion dollar outcomes to do extremely
well.
And in fact, our first fund for just for example, I won't name the company, but there was a 350 million outcome that returned to X, our first fund.
But the same reality is that a couple companies in each fund drive all the returns. Those two companies that we invested in when they were niche and non-consensus and not obvious and then became mainstream, those are gonna be the ones that drive the vast majority of our returns.
Yeah.
But I would've thought there's some like vertical SAS type things that are actually kind of niche in a way, which is like, they're people who are coming from interesting, weird parts of the, you know, economy that knows something kind of nitche and and then can like, bring that interesting idea.
That may be right. And, and I'm partly just giving vertical sass a tough go because I've personally never been interested in it. And I find that
some of our, also our best investments were very hard to explain.
to.
And they're actually not necessarily even explainable in a sentence. They're doing something new and something new is really hard to explain in many
cases. Mm-hmm.
I find the things that are very easy to explain, become consensus very quickly. And in a very competitive venture market the obvious things become very expensive very
thing.
It's interesting. You're really different than like the venture playbook sort of thing. People don't like too early and people don't like things that are really hard to explain.
Yeah. So the two early thing we also, this took us a long time, but one of the reasons we started notation, so my partner and I were at Beta Works together. My partner was the chief architect, so effectively the CTO there.
And I had a few different roles including product and, GM roles. And then I spent most of my time running our seed investing business.
One of the reasons we left Betaworks to start notation,
was we saw many, I saw many of my peers at seed going from 8 million funds to 50 million funds to 150 million funds.
In the case of Thrive to it's 800 billion, billion dollar funds. And God bless, and they've done a fantastic job. But what we started hearing from founders in the New York ecosystem was, you know, I just went into this seed fund. I thought that was the place to go to raise my first round of capital.
And they're telling me I should come back with a million dollars of aor. We took maybe like personal offense to that, like maybe more than we should have. But that was one of the driving forces to leave Betaworks and start notation. We wanted to be a place where founders could come really early.
In fact, ideally like years before they've started the company, And so what we realized many years in, many years later was that there was actually a, a very good financial rationale fore investing. And I'm, I'm a very strong believer of this to today, which is that the risk profile of a company, in my view, does not change dramatically until many stages later.
So like the true de-risking that takes place at a company or a startup in my view, the first one is when they achieve real product market fit.
In recent years, that's probably series A or even b. Mm-hmm.
and then there's another de-risking that takes place when you find a business model around that product market fit.
Hopefully those happen around the same time, but it doesn't always happen. I mean, Google is a famous example of having true product market fit around search, and then they found a business model many years later.
So if you believe that the risk profile at. Pree or seed or a even looks sort of the same. Mm-hmm. Like it's not a linear de-risking. Yeah. You have these major events that are de-risking events. In my view, you should be investing as early as possible. The risk profile effectively looks the same, but you're investing at a way, way, way lower valuation.
And particularly in recent years, the valuation between pre-seed and seed and a has grown exponentially while the de-risking that's taking place is probably pretty
What's, what's your
yeah. So LPs often ask us like, isn't pre-seed risky? In my view, what's risky is investing in a company that hasn't pro product market fit at a 50 or a hundred million valuation.
Yeah. And putting a lot of capital into that. Mm-hmm. that is
Um, the way that we de-risk is investing at a low valuation very early on. So in my view, precede is like the no-brainer. I I think you're starting to see this big funds, many other firms. So we, notation was the first precede firm in New York in 2015. We pitched the concept of precede. No one understood that. No one liked it. People laughed at it.
I think that's usually a good signal that you're in heading in the right direction. and now I think it's what worries me, quite frankly, is that it's becoming, I think understood mm-hmm. by the market. You're seeing all these big multi-stage firms launch early stage efforts and seed funds. And quite frankly, that like worries me for the state of our business because in 2014 and 15 we felt like we had a secret.
That was not well understood by the market. Now I think it's better.
Understood.
Oh. So just tactically, like what's what's valuations and what sort of ownership are you looking for?
Yeah, so
first fund, it was an $8 million fund. Basically a proof of concept fund. We, I think looking back at the time, were mediocre investors that time to market perfectly. Which, if you comp that to a startup you can be okay. Yep. But if you time and market perfectly, you're in great
shape.
And our first fund was 20 15, 16, 17.
And the valuations were very low cuz there wasn't much capital available. So our average valuation through our first fund was about four post. it seems almost comical right. Today. Our second fund, I think in some ways was like the dream fund in that we were much better investors. The market was still attractive, maybe not quite as attractive as those years, but our average valuation was maybe six or seven post
fund three. Was a 45 million fund invested 21, 22, and we're still investing in 23. 21 was a terrible market. for, for VCs. Yep. That was a year where I felt for the first time notation might not be viable as a fund.
And I, I'd actually argue that most funds were not viable in 21. We made maybe two or three investments an entire year.
fine. Well, we couldn't find a, an investment that fit our model.
which to me would've been like sub 10. Mm-hmm. at precede 10 or lower, and where we can write a million dollar check and own 10% of a company. Uh, Those were incredibly difficult to find in 2021.
22 was a slightly better market and we found a few more things to invest. And I suspect this year and next year are gonna be very good years again to invest, maybe closer to like notation one or notation two years. So we're patient. We're not in a rush. We've never made that many investments.
Every year it's just me and a partner and a third colleague and we, we take our time. So, I'm very excited about this market. I think the relationship in 21 got outta whack.
So founders coming in and saying, who's gonna give you the most money at the highest price? We don't give a fuck who you are. Excuse my language. Most founders in our portfolio, like Tiger was the place du your Yeah. And they were gonna give you the most money, the highest price. They were never gonna call you.
And by the way, they're not gonna do your, bridge round
Mm-hmm. .
Because they're not gonna call
you. yeah.
So that relationship in my view, got outta whack. I do this job because I love creating long-term partnerships, and I know every VC says that I love creating real relationships with the people that we work with and are in business with.
. So aside from the valuations, just the power dynamics in my view were way off. I don't mean to say that the power dynamic should be shifted all the way towards the capital side, either.
I think you want something that feels fair and feels honest and where you can build a real relationship with people. and I think notation is viable. again, which I, which I'm excited about.
to, I mean, that was gonna be my question though, is,
is there another edge that's needed? Like, you'd like to be early? Like what's, what's next?
I have a theory now that's probably too early. But it informs how we're gonna spend the next 10 years. And my theory, I'm still working through this, so this is gonna be still in primordial ooze phase and not fully fleshed out. But my theory is that in the last 10 years, Venture became an asset class, became fully institutionalized.
And these big, big firms whether it's Andreessen or Sequoia or Greylock, I don't mean to call anybody out. And not just the big firms, but the seed firms became banks became modern day banks. They became the JP Morgans or in private equity, they became the Blackstones. And they operate like banks.
They operate like financial institutions. They operate like accountants. There's a similar thing that actually I take a lot of inspiration from. Uh, movie studio called 8 24. Hollywood became big corporations, banks and institutions and accountants. 8 24 is. A tiny little studio came out in New York, not in Hollywood, and they fund all the best movies today.
So they, this year it was everything everywhere, all at once, which is one of my favorites. They did moonlight. They did x mocking you. You'll now, you'll now notice Yeah. At the beginning of a movie says A 24, it's gonna be the best movie.
And when you read all the quotes from the producers and the directors and the people in these movies the thing that is consistent is they don't feel like Hollywood. I think there is a similar opportunity, emerging adventure where the big, big firms, or even the seed firms that have become, they're so focused on becoming institutional that they lose their soul.
And you become an accountant and I think that founders are looking to work with people. Not banks, particularly at the early stages. And I think there's gonna be a gigantic opportunity in the next 10 years to operate as a human without big service teams, without hundreds of people working there without early stage fund growth, fund opportunity fund, crypto fund, bio fund.
I think founders are gonna care about focus and about people, and I think there's an opportunity to create the anti-institutional firm.
Hmm. Okay. So many questions, but I mean, I sort of wanna say like, what does that mean? Um, , uh, two ways. One is how do you project that as a, I mean, I'm a person, I'm an authentic person, all of that. Like, what does that mean? And, and also around like, but you still wanna build out platform and support capabilities.
I
don't think
you do customer, I don't think you do customer. So I think it means a few things. One, I think that for most firms, not every firm, I think for most firms,
Platform services are a way for the people and the partners to not do the work
God, you got so many zingers that are on vc. I
I like
it.
And I also believe that if you talk to the average founder, we have a founder that we work with that raised the Series A from one of the big banks. I'm gonna call them the big banks now. And they said I never really talked to the partner cause I got handed off to the platform services
team. And then by the way, the platform services team never really did anything for me. So I'm talking in generalizations, I don't wanna call it specific firms. This is different for every firm. I think your average firm
platform
services a way for partners to not do the work. And I'm skeptical that platform services actually move the needle for any. that's number one. So I don't, I, I think the antis institution, the anti-bank does not have a big platform services team. And I think leverage, when you look at some of the firms with the, best brands in the market,
In my view, benchmark usv, benchmark, IA ventures, small groups of people that act like humans, that create real partnerships with founders and have zero platform services or support or junior people.
I think the language matters. So if you look at the average, I actually just did this in the last few weeks. If you look at the average VC website
average. Mm-hmm.
they're starting to look and talk like banks too.
So
website, what does your website say? It says something interesting ,
ours.
Yeah. You know what I noticed on our website?
Yeah. We have pre-seed on it. That is going away.
That is institutional speak and institutional language and founders don't give a shit. Okay. So we're getting rid of that. Okay.
But sorry, you were saying on most
I think the language, I think the language matters. I think that the strategy matters.
So Graylock, just like you said, they have a $400 million C firm. Will they work with a bunch of great founders? For sure. Um, I think there's a lot of founders in the market.
Are fully aware that their seed firm is option value, doesn't really matter. They're not gonna get the same attention from a partner as their growth fund or their early stage fund or their seven other funds.
Mm-hmm. that they care
about.
And they're probably working with the B team at Greylock.
Ooh,
are right. the best partners at Greylock are not spending all their time on the seed fund. Period. So, I think all these things matter. The execution of the antis institution, institution, quite frankly, I don't know exactly what that looks like.
But that's my obsession and that's how I'll dedicate probably the next 10, 15 years of my life to doing that. And I think the details matter. There's a lot of different details to work out, but I think if you can do that well then you're the 8 24 adventure. And I think that's will be a very powerful place to be.
what's so interesting.
but also you just named a bunch of firms as opposed to a bunch of people. Like, and, and so does seem to be some trend of people having like a personal brand just being like, well, yes, you know, it's not like you wanna work with any partner at XYZ firm, but so-and-so's amazing.
Yeah. Those firms are the people.
When you think of uss V you think of Fred Wilson, and you think of Brad Burnham and Albert Weinger and Andy Weissman, like you know the
people. Mm-hmm.
Not to hate on Andresen, but like I looked at their website the other day. There's pages and pages and hundreds and hundreds of people and Yes, Ben and Mark.
Legit. Yeah. But you're working with a financial institution, so it's like showing up at Goldman Sachs and working with someone that they assign
you.
Mm.
I'm gonna get a lot of hate from folks that work at Andreesen after this.
I'm
sure.
We can, we can edit anything you, that's the
No, I, I don't care. I would say it.
So is the idea then that you build the anti-bank brand and then entrepreneurs all come to you.
Ideally that would be an amazing place to be. I don't believe that you can or should rely on people randomly showing up at your door in the venture
capital,
in
most things in life, I think.
And so the vast majority of our time is spent proactively going and meeting people.
Our job is to know as many smart, talented, particularly technical people. Cause we're funding mostly technical founders in the New York ecosystem. And we do that in lots of different ways.
we have a big network. So we've, we've invested in. Actually in the last 12 years, I've probably invested in, I don't know, a hundred or 150 companies based in New York. We have great founder network there. We have what we call a community fund, so that's a kind of friends and family fund alongside our institutional fund.
But I personally do a ton of outbound. So like my job is to know who are the smartest people at Datadog and Mongo and Etsy who are the VP of ENGs there, and the head of products and the head of design.
And if you ask people, I ask people a very simple question, which is one, who would you start a company. , And I ask them, who are the other people inside a Datadog that as an angel you would fund? And folks are very happy to answer that question.
Mm-hmm. , um, that question gives a lot of signal. . So then through that person, I meet three other people at the company, uh, and I spend time with them, and then I ask them the same question. And if it were up to me, aside from the time that I'm spending with our existing founders, I would spend all day, every day just trying to navigate the smart people in New York City and spending time with them and getting to know them.
But I
mean, that's a huge amount of time, right? Because you're not even spending time with, you know, your pipeline of inbound type stuff.
So I think you can become a slave to the stuff that's coming into your inbox so even pipeline is a very institutional word, by the way,
So I, I think we need, I think we need to remove, no, but I think I use all the same language too, and I think I'm very mindful of this language now. Um, I hate when VCs say doing deals, these are not deals. Right. These are relationships that you're building. Yeah. And a partnership with a founder.
And so I think you can become in this job, it's very easy to sit at home all day and just look at your inbox, filling up and looking at your list of companies that are raising capital that were sent to you. I'm not perfect at this, but I try to do my absolute best at, for everything that just comes in and is asking of my time.
I try to proactively answer the question of, is this something I want to proactively spend time on? So if a founder or a company comes in through someone in our network is this someone that I would've proactively gone out and reached out to?
Um, regardless of whether or not, if they just came
in. And that simple question helps. It doesn't solve, but like, it helps me try to figure out how to, how and where to spend my time. And I'd much rather spend time proactively going and finding the people and the opportunities and the companies that I wanna spend time with
So, so, but how, you know, it's sort of a, you know, how do you think about your time, but also how do you think about getting leverage?
I don't think I need a ton of leverage. So we have, we have a third colleague. Who runs Ops and finance and she's fantastic. And she's been with us about a year and a half and has totally transformed how we operate.
I don't make many investments, so I make four, maybe five investments a year. I'm upfront with founders and that relationship where our goal is to see you through some key critical milestones. At some point you'll go work with a bank and they will join your board.
And at that point, our relationship is gonna change.
So that allows me to scale a little bit. But I don't make many investments because I like spending time with the founders. I don't like truly scale.

Okay,
wanna like shift and just talk a tiny bit about you, but, any big things like AI is super, like, exciting to everyone right now. Is it exciting to you? Are there certain things that are super exciting to you right now?
So, AI is another great example of many of the things we've been talking about.
Uh, if you're an early stage investor, I believe you are too late for ai. Sorry. So we have I'll toot our own horn a little bit. I try not to do this, but we have two really interesting AI companies that we funded two years ago, that were weird and non-obvious and no one else wanted to fund.
And two years later, they're the hot thing and raising lots of capital. Our job is to find the hot thing couple years before it's the hot thing. the way in which I found that we, so we're not thesis driven. We're not building research. Decks on our deep dive into the market. Another thing that banks do what we're doing is we're talking to alt the smartest people in the ecosystem. And I've found that founders are much, much better at predicting the future than VCs are. And it was because there's like weird, crazy talented founders obsessed with this thing, building nights and weekends that they can't stop thinking about. So I do believe that AI is gonna have a transformative impact as an early stage investor. Um, we're not funding it right now. Uh, we sort of made our investments a couple years ago and we'll see how those play out.
I also think that the hype cycle is gonna die, and that may be another time, uh, again, to make some really great investments. We've seen this in crypto is like, crypto has actually been very instructive in that we're now going through a market cycle, macro market cycle. Crypto's had like four market cycles in the last 10 or 12 years, and I've learned a lot from that because what I've mainly learned is that you want to invest in crypto when no one cares about it.
When it's written off for dead. I think we're actually maybe getting another opportunity to do that. And you want to sell crypto when everybody's talking about it, when it's the hot thing. And. If I think AI is perhaps similar, we're going through a hype cycle now. Big believer in what AI well will impact over the next five to 10 years.

Hm. I would love to keep discussing seed AI investing, but, uh, we are almost out of time and I am dying to ask about podcasting origins is a huge, important podcast. Uh, it is how I know you. Do you like podcasting?
people. I really appreciate it, by the way, the podcast, I feel like I've just been tuning my own horn, which I always end up feeling
that's
what you're kinda
supposed to doing podcast,
afterwards. That's usually why I don't like hearing myself speak. When we started that podcast many people, so one of the first podcasts about LPs and VCs, if not the first. And before we released it, the first episode many years ago we got all this feedback from other VCs and LPs being like, no one wants this.
Don't do this and so again, I think that's a, when we started a pree firm, people were like, what the hell does that mean? Don't do that. So I think that feedback to me, I found encouraging over the years. And many of the things I'm thinking about now is is notation in its current form too obvious
now?
thinking mm-hmm.
And what would the next iteration of notation look like? Where we could get some people laughing at us
again?
Because I think that will be a much better strategy than doing the obvious rinse and repeat thing. So I have loved that podcast. I did it very selfishly cause I wanted to learn and there was no information about raising funds and LPs.
I worry now it's a little bit, uh, too institutional for what I want to accomplish in the next 10? years.

Okay. Final favorite question, um, how do your friends describe you?
I was not expecting that one. Um, how would my friends describe me? I think, hyperbolic, um, you're uh, passionate, passionate pain in the ass.
new Yorker. coming from an
know. Skeptical little guy. Bigger personality. Yeah. ,
I see all of that.
And you're spending more time in la We all are gonna have a chance to get to know you in
la I
love la. Yeah. My wife and I are committed to being here for every year, at least for as long as we can make that work.
Or, uh, kids might make that more complicated. you don't have
but we, we don't have kids yet. Um, and we do really, really love it. I, I think of LA as my three or four month sort of detox from New
of,
and I am grateful for that period each year. And I love it here.
well we are, um, really looking, I'm really looking forward to having you more involved in la. And, uh, congratulations on building notation and being such a good, independent thinker.
Thank you so much for having me. Appreciate it.