Aaron Samuels is Founder and Managing Partner of Collide Capital, a $66M fund, and the first VC fund to be simultaneously backed by Amazon, Alphabet, and Twitter. He is also the co-founder and former COO of Blavity, the largest global Black media company for Millennials and Gen-Z, and AfroTech, the world’s largest Black tech conference.
Aaron began his professional journey as a spoken word artist before transitioning into strategy consulting at Bain & Co. and later serving as a Product Manager at TeleSign.
On this episode, Aaron speaks with AfroTech's Will Lucas about his journey to becoming a venture capitalist, the creation of his $66 million fund, and the opportunities and challenges in supporting underrepresented founders in today’s legal and economic landscape.
Follow Will Lucas on Instagram: @willlucas
Follow Black Tech Green Money: @blacktechgreenmoney, @btgmpodcast
Learn more at AfroTech.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I'm Will Lucas and this is black tech dreen money.
Aaron Samuels his founder and managing partner at Calli Capitol,
the sixty six million dollar fund so far, which is
the first VC fund simultaneously backed by Amazon, Alphabet and Twitter.
He's also co founder and served as COO at Blavity,
the largest global black media company for millennials in gen
(00:23):
Z and afro Tech, the largest black tech conference in
the world. He began his career as a spoken word
artist before working at Banne and Co. As a strategy
consultant and tell A Sign as a product manager. Iaran
has had a successful professional career, and I wonder how
he tells the story to limited partners, to people who
put money into VC funds, how his career as an
(00:45):
operator signals that he might win at investing their money.
Speaker 2 (00:48):
I think that there's many paths that people take in
order to break into benric capital. I think there's three
primary paths that people take, which is one being a
former operator, which is which is my path and happy
to dig into that a little bit.
Speaker 3 (01:05):
So this is either.
Speaker 2 (01:06):
You've you founded a company or you rose through the
ranks to become a senior operator. At a company, you
learn how to how to do the company building fundamentals,
and then ultimately that teaches you how to identify that
type of talent, that type of support for other companies. Right,
So I think that's path number one, And how do
people break into venture Path number two is you go
(01:28):
through the investor funnel. So oftentimes people will work in
investment banking, work in private equity, maybe work at you know,
some smaller venture capital shops, and then work their way
up to the larger, the larger firms, and then and
then maybe one day start their own, right, but you
kind of have the career as an investor. And I
think number three is I think actually the most common
(01:50):
version of becoming a venture capital venture capital practitioner, which
is that you are just born rich and.
Speaker 1 (01:57):
You just have the best the most and that's the
most common.
Speaker 2 (02:02):
That's actually how the industry, that's how the industry got started.
The industry got started as a cottage industry where wealthy
people effectively just made angel investments as long shot bets
that had very low probability of success. But if they hit,
they hit super big, and it's it's only over the
(02:23):
last you know, twenty to thirty years that that venture
capital as an industry has really started to solidify.
Speaker 3 (02:33):
And so I say that because I think it's.
Speaker 2 (02:36):
Important to remember that for the for the majority of
the history of venture capital, this was a game that
that rich people played by taking taking huge bets that
were of less consequence because they could they could afford
to lose the money that they were playing with. Ye,
And it's only it's only recently that that the that
(02:56):
the asset class has has become formalized. And so uh so,
if you want to become a venture capitalist, the easiest
way to do that is to just be rich for
for those of us, for those of us that don't
have that option, I recommend one of the former two paths,
which is to be to be an operator or to
be or to be an investor. And and my my
(03:17):
way was to be an operator. So now that now
that we're grounded, I had a I had I had
a I had a great career path that led me
to this moment.
Speaker 3 (03:28):
And you know, and I.
Speaker 2 (03:29):
And I clipped from all of my experiences from from
being a spoken word artist to being a consultant, to
being a product manager to being a CEO.
Speaker 3 (03:37):
But but I think that.
Speaker 2 (03:39):
I think it's important to say for for all your listeners,
because there might be people that that walk different paths,
that that.
Speaker 3 (03:44):
Want to find a way to get into venture and
you don't have to just do it my way.
Speaker 1 (03:48):
Yeah that I want to talk about that first way
for a second. The people who are on a career
trajectory and they say, you know what, I want to
find my way here. They're an operator today, what are
the things along the operational journey that are necessary to
be good at this till I have learned?
Speaker 3 (04:07):
Yeah?
Speaker 2 (04:08):
Yeah, yeah, I mean it's a good question. In many ways,
I'm still figuring it out myself. The hard thing about
about venture and a way that it's very distinct from
being an operator, is the feedback loops are way way longer.
So you know, when I was COO at Blavity, you know,
I put in a solid week's worth Monday, Tuesday, Wednesday, Thursday, Friday.
(04:30):
On Friday afternoon, you could walk into my office and
ask me straight up, Hey, Aaron, did you do a
good job this week?
Speaker 3 (04:38):
Yes or no?
Speaker 2 (04:39):
And I could look you dead in the eye and
give you an honest answer, Yeah, I crushed it this week.
Speaker 3 (04:45):
This week, not not so well. It didn't go as well.
Speaker 2 (04:48):
Ye. In the world of venture capital, you don't have that. Yeah,
you know at the end of the year, at the
end of the week on Friday, ask me, yeah, yes, me,
oh well I did I have no I have no idea,
and I won't I won't know, as you pointed pointed out,
I won't know for seven.
Speaker 3 (05:02):
To ten years. I'm if I'm good at this.
Speaker 2 (05:06):
You're making very very very long term, high risk bets.
And you know, the successful firms are going to be
the firms that invest in twenty to fifty companies and
have one or two huge winners. Even if the rest
completely go to zero. It's hard to call it. And
(05:27):
so the things that you do on your journey as
an operator in theory should help you do one of
two things, which is, either help you become a better picker.
It help you help you pick winners, help you identify
the characteristics the attributes of founders, of markets, of operating teams,
of business model ideas that will help increase the likelihood that.
Speaker 3 (05:50):
You that you pick a winner.
Speaker 2 (05:52):
And two learning how to support your portfolio the things
that you do post investment, which is where I think
operators really shine is you know, after you've made the
financial commitment to a company, what else can you do?
Can you help them build their CRM? Can you connect
them to operational leaders, Can you connect them to customers?
(06:14):
Can you connect them to hires? And that not only
will help support the portfolio company after you've invested, but
if companies believe that you're going to be able to
provide that type of support, it might make you more
attractive as a firm to begin with, which might then
help you select or help you have access to better
top of funnel for the investments that you make.
Speaker 1 (06:37):
Now you've raised some really interesting questions for me, And
I've heard plenty of black founders on this podcast, and
many who are wildly successful talk about how there are
so many vcs who want to be in on their deals,
and we always we tend to because there are so
few of us. There's a growing number, but so few
still that you know, just want anybody to give them
(06:59):
a check. But there's a certain segment of black founders
who have checks thrown at them, and they can get
they get to be selective, and so then the VC
is then ultimately trying to pitch themselves. So can you
talk about what it's like to be on both sides
of that to where you're on the blavity side where
people want to give you money, then you're on the
VC tie where you might have to pitch yourself to
(07:20):
some really really interesting startups.
Speaker 2 (07:24):
Yeah, I mean, look this, this game, if anything, will
will help keep you humble. And look, I think I
think that's a good thing. Like it for in some way,
you're kind of always you're always pitching yourself.
Speaker 3 (07:39):
You're always you're always selling something.
Speaker 2 (07:41):
And I think, you know, the older that I've gotten,
the more that I've realized that when you make it
to the top of any field, ultimately you're a seller.
You know. I have a good friend of mine, he's
a climate scientist with a PhD from Harvard. I ask
him how he spends most of his days. He spends
his days right in grants, which you know, it means fundraising,
(08:05):
which means he's raising money for, you know, to support
the projects. I think that's the same thing. If you
become a great founder, become a great investor. At the
end of the day, once you get to the top,
you're raising money, which means that you're selling yourself. You're
pitching yourself, and you're pitching yourself to as a VC,
you're pitching yourself to you know, your LPs to invest
in your fund, just as much as you're pitching yourself
to the founders that you potentially want to invest in.
(08:28):
And so what it means is that you can't take anything.
You can't take anything as a given, you can't take
anything for granted. Understand what your strengths are, and you
need to You need to let the founders know why
it's going to be differentiated to receive a check from
you as opposed to you know, any other lookalike, you know,
small emerging manager or you know, they might be comparing
(08:50):
you to a big box shop. And then I need
to convince them why taking my money is better than
taking money from a twenty two billion dollars Silicon Valley,
you know based firm.
Speaker 1 (09:00):
Yeah. I know you're very passionate about your spoken word poetry,
and I wonder the connections you might see if you
can describe those for us from that sort of creativity
and the business creativity that you have to endure.
Speaker 2 (09:17):
Yeah, I think I think my time my time traveling
as a as a performance poet for for about a
decade I was. I was heavily traveling around the country,
and I learned a lot about a lot about passion,
and a lot about kind of this this notion in
the in the poetry world that we we we call
speculative fiction, uh, this idea of dreaming, uh, dreaming a
(09:42):
better world and writing it into existence. And I think
that in many ways there are strong commonalities between my
favorite artists and my favorite founders in that both of
them are.
Speaker 3 (09:56):
Are dreaming a better world, identifying.
Speaker 2 (09:59):
A way that the world can be happier, healthier, more efficient,
you know, but improved in some way, and then building
that and speaking it into existence. If you can't, if
you can't dream it first, then then you can't then
build it. And for me, that attribute of passion is
(10:19):
something that is probably the number one characteristic that I
look for in founders. I'm looking for a founder that
is identified a hole in the universe that they uniquely
are qualified to fill.
Speaker 3 (10:34):
And I think that that's so important. You know, as we.
Speaker 2 (10:36):
Mentioned earlier in the conversation, you know, the feedback loop
is long. You know, it takes seven to twelve years
for a venture backed startup to get to exit I
need to know that the founder is going to be
just as passionate on year seven as they are on
(10:58):
year one.
Speaker 3 (10:59):
And that doesn't happen if you're just in it for
the money.
Speaker 2 (11:02):
It doesn't happen if it's just a pet project that
you're doing in a classroom. It only happens if if
you're obsessed with the idea, if you're obsessed with the
problem that you're trying to solve, and you really believe
that you will make the world a better place or
at least a more interesting place, if you're able to execute.
Speaker 1 (11:19):
You just spoke to something about you know, founders who
have you know, recognized the void and they can something
that they can uniquely feel how dialed in to the
details of what that future looks like are the most
successful founders, Like, can they talk about the intricacies or
just the concept?
Speaker 3 (11:36):
No, No, they should be they should be really dialed there.
Speaker 2 (11:40):
You know, I think that that the best founders that
I've seen, they can they can paint you, They can
paint you a very very detailed picture of what the
world will look like if their product, service, business model,
you know, serves as a as a disruption to the
status quo.
Speaker 1 (11:57):
To a VC, what do you need to hear in
those details that give you the confidence site this this lady,
this guy is going to go do it.
Speaker 2 (12:07):
Yeah, I mean, I think there's a few things that
I'm looking for, So, you know, and this is true
for a lot of vcs, But you know, one of
the things that we first listen for is is this
problem a big enough problem that if the founder succeeds,
it will create a billion dollar company. You know, they
might be they might be right about the problem, and
they could be super passionate, you know, about it. But
(12:29):
if it's a small problem, then it doesn't necessarily return
enough capital for me or from my LP base.
Speaker 3 (12:35):
For it to move the needle.
Speaker 2 (12:36):
And that's that's kind of where we get into the
concept of is this a venture backable company versus is
it a small business or a large business. That's a
good idea, but maybe not a great idea for a
venture because we need to have those scaled returns. So,
you know, firsts is this problem a big enough problem?
Speaker 3 (12:53):
You know?
Speaker 2 (12:53):
The second thing that I'm usually asking is what about
this founder's background leads me to believe that they are
going to be able to execute on this solution. So
they might be right that it's a great problem and
it would be awesome if somebody solved it, But why
do I believe that you're going to be able to
do it? Have you have you been thinking about this
problem for the last fifteen years? Have you have you
(13:15):
worked on versions or iterations of this problem over the
course of your career? Have you built prototypes, test models,
do you have a PhD in the subject matter?
Speaker 3 (13:23):
Et cetera.
Speaker 2 (13:23):
It doesn't have to be all of those things, but
we're looking for some version of what we call founder
market fit, which is, you know, do we believe that
that this founder has you know, done the things in
their career to you know, to give you strong indication
that they'll be able to solve this problem. Yeah?
Speaker 3 (13:40):
I would, And you know, go go ahead, No, no,
go ahead.
Speaker 2 (13:43):
No.
Speaker 1 (13:43):
I was going to say, like, because I know you
invest at different levels, you know, ceed pre seed, like
you know, one hundred K to the three million I've
read in my research, and I want you to speak
to along the lines that you're already on. But at
how deep are do you expecting them to be in
at each stage? So if if I'm asking for one
hundred k. I'm assuming that you're not expecting as much
(14:05):
as you would if I was asking for three million.
Speaker 2 (14:08):
It's a good question, and I would say, no, that
that's that's not true. You know, for me, the the
dollar value doesn't correlate to the level of.
Speaker 3 (14:20):
Dialed in that I should see with the founder.
Speaker 2 (14:23):
You know, if we're giving you money, it's more correlated
to what the stages of the business and making sure
that you know that we own a significant enough percentage
of the company to match with our portfolio construction. But
if you know, if we're investing, we.
Speaker 3 (14:41):
Usually don't go as low as one hundred k these days.
Speaker 2 (14:43):
But say we're investing a five hundred k check into
a founder, you know, that oftentimes means that the stage
of the business is such that if we invested more
than that, it would dilute the founders too much. And
so you know, we typically don't want to take you know,
more than twelve ownership with the first check. That being said,
(15:04):
will happily invest more at the next round, you know,
at a higher evaluation if the company continues to perform well.
And so you know, I would not say that the
amount of capital is correlated to you know, to our
conviction level of the founder. Rather, it's just correlated to
the stage of the business and how how early or later,
(15:26):
how far along the kind of business trajectory the company's the.
Speaker 1 (15:31):
Company is, Yeah, you spoke to something that I'd like
to bring back up, and you talked about the other
value you bring to a startup, whether that's a network,
whether that's you know, CRM experience, et cetera. And can
you speak to holding that in one part of your
mind in this other idea which I'm a believer of.
And I remember recently hearing a big Finance guide to
(15:53):
say it it's as hard to build a small successful
business as it is a big successful business. And so
if you think about that concept, most of us don't
think that way. They think, if I'm going to build,
you know, a one million dollar business, you know, that's
going to be hard, but it's not going to be
as hard as I was trying to do one hundred million.
But it's hard as hard, you know. So it's how
(16:13):
big do you want to scale your hard how much
do you want to take on? But can you speak
to those concepts of you know, what you believe you
can bring to a business and the level of which
effort you have to put in first, not as much
reward on the back or much on the outside, or
I might as well put my effort toward something that
could be a bigger windfall.
Speaker 3 (16:34):
Yeah.
Speaker 2 (16:34):
No, I mean, I think it's it's a great point,
and I completely wholeheartedly agree with you. Sometimes it's way
harder to build a small business and to build a
big business. And I think the reason that that is is,
you know, the success of the business isn't just about
the outputs.
Speaker 3 (16:47):
It's also about the inputs.
Speaker 2 (16:49):
Right. So you know, if if I raise forty million
dollars and I create a business that is a ten
million dollars a year business, you know, some say that
that's successful, but other people say, well, no, you raised
forty to get to ten.
Speaker 3 (17:04):
You know that you've lost a bunch of money doing that.
Speaker 2 (17:07):
Versus, if I raise five million dollars and I get
to a ten million dollar annual business, I would consider
that significantly more successful. And so I think not everybody
always factors in both the inputs and the outputs when
they're looking at things. I think that that's especially important
when you when you kind of observe the world through
(17:28):
a racial equity lens, because you know, for the most part,
black founders, Latin founders, founders who are women or have
women on the founding team oftentimes are significantly undercapitalized relative
to their straight white male peers, and oftentimes they're judged
(17:49):
based on the same output metrics. So oftentimes they'll say, oh,
look at these two types of business models, they seem similar,
but this company is, you know, generating five x the revenue.
And you know, the first thing that I often ask is, okay,
but they did they raise ten x the amount of capital?
Speaker 3 (18:06):
Because if so, it's.
Speaker 2 (18:07):
Actually it's actually less impressive to get where they got,
and in the long run, ultimately it won't return actual
money for investors because investors have invested in so much
that business needs to not just you know, outperform their
peer set, it needs to outperform their peer set at
a multiple of the amount of dollars that were invested
(18:27):
into the business. And so I think oftentimes it's important
to look at what has this founder done with the
resources that they have.
Speaker 3 (18:36):
Therefore, do I believe that if.
Speaker 2 (18:38):
I put more resources into the business that it will
continue scaling?
Speaker 1 (18:42):
That's really good? And so you brought up, you know,
racial equity into these things, and it makes me think
about the landscape, the legal landscape of trying to support
black founders, women founders, LATINX founders, and even when you're
talking about major capital, where you're talking about college admissions,
colleges can't ask what your background is anymore, you know what,
(19:04):
talk about your thoughts on the efforts to support black
founders intentionally with venture capital, faced with the issues that
we now are presented with.
Speaker 2 (19:15):
Yeah, I mean, these are these are trying times, and
you know, it's it's hard as as someone that's worked
you know, in many ways in the black empowerment space
for the majority of my career, whether as an artist.
Speaker 3 (19:29):
Or you know, with you know, with my time you know,
founding Blavity.
Speaker 2 (19:34):
We've seen the we've seen the pendulum swing back and
forth a few times. You know. I remember when we
when we started Blavity back in twenty fourteen.
Speaker 3 (19:45):
In many ways, it.
Speaker 2 (19:46):
Was a you know, it was a direct response to
you know, what was happening in Ferguson, you know, in
response to the murder of Mike Brown.
Speaker 3 (19:56):
And you know then you.
Speaker 2 (19:57):
Know, there was interest in supporting these the initiatives, that
interest winds down, and then it ramps up again with
the murder of George Floyd, and then again we see
a lot of racial equity initiatives permeate throughout corporate America
and the investing world in twenty twenty, twenty twenty one,
twenty twenty two, and then again now we're seeing the
(20:20):
pendulum swing back with a pushback against critical race theory,
a pushback against affirmative action.
Speaker 3 (20:27):
But for those of us that are practitioners in the space,
this is not new.
Speaker 2 (20:32):
Sometimes it's in vogue to support racial equity, and sometimes
it's very much not in vogue. I think that the
important thing for founders to look at is the people
that have staying power, the folks that have said that
they care about this work and have continued to do
this work whether or not it's popular. And I think
that you know, there are companies like Blavity that you
(20:55):
know will support black people whether or not it's cool
to support black people. And I think that there's a
lot of firms that have demonstrated track records in venture
you know, of investing in people of color corporations that
have done this.
Speaker 3 (21:09):
And I think the most important thing.
Speaker 2 (21:10):
To look for is look at people's track records over
a longer time horizon. Don't just say, you know, do
you have a new initiative or have you do you
have a good press release, you know where you've made
some type of dollar commitment, which, by the way, many
firms made dollar commitments that didn't actually execute on those
dollar commitments, right, So don't look at that, look at
the actual track record of work and say, okay, over
(21:32):
the last ten years, over the last twenty years, you know,
have you you know, how many black founders have you
actually invested in, how many programs have you actually created?
Speaker 3 (21:41):
What were the actual dollars that were deployed versus the
dollars committed?
Speaker 2 (21:45):
And I think that you know, folks rise to the
top in terms of who actually has a track record
of supporting women, in people of color in the space.
Speaker 1 (21:52):
There's this line of an article I read about you,
where the line is Samuels is a believer that the
best endings to store are both surprising yet inevitable. And
I'm gonna allow you to pick which you want to
talk about with just that statement alone. But I think
about how that can be directly related to so many things.
Number One, you know you talk about black people. I
(22:14):
believe black people ultimately find true generational wealth and success
in our country and around the world. We will find
our way to not be the minority. We will be
the I mean that's just numbers, will be the majority
or not a minority. In less than ten years or
about eighteen years. We will find success where we have
(22:34):
not historically found it. People who are gonna win in
startups and business and etc. You can probably find indicators
that said that person's gonna win regardless whether or not
I invest in them, because that's a winner. So that
person's gonna win. Aaron Samuels is going to win, Jeff
Nelson is going to win, Morgan is gonna win whether
or not pick a thing. And so talk about what
(22:56):
you want to talk about with just that statement, like
what do you get? What do you derive from that? Stay?
Speaker 2 (23:02):
Yeah, I mean, I think I think that the clip
that you're you're pulling that from is actually where I
was talking about evaluating founders and and helping founders tell
their story to other investors.
Speaker 3 (23:15):
And I think that when you know, when you're pitching
a deck.
Speaker 2 (23:18):
When you're pitching a company, I think that subtly, that's
what moves That's what moves the needle on getting somebody
else to be convicted in you, is be surprising yet inevitable.
I think if if somebody walks away from your pitch
as a founder and they say, oh, that called me
(23:40):
off guard, but also yeah, that's definitely gonna happen, I
think that that that makes me more likely to invest
in you, because I believe the world is naturally going
there anyways, but you surprised me because you're going to
get there first, or you're going to get there differently,
or you're going to get there better.
Speaker 3 (23:58):
Of course.
Speaker 2 (23:59):
I think that that's true more broadly, you know, than
just founder stories. I originally kind of pay per clipped
that expression from something that we used to say a
lot in the poetry world in terms of an ending
to a poem or an ending to a story and
surprise and get inevitable. But I think that that's what
leaves you at the end of a presentation or the
end of a story, like the wind is sucked out
(24:19):
of you a little bit. And I think it's that
that emotional feeling oftentimes that drives a lot of investing decisions.
Speaker 1 (24:27):
Is you talked about something in that statement there that
you know you can invest that you know, Series ABC potentially,
and you're talking about investing your seed and pre seed.
Is that ability to do because a lot of people
in the venture capital space pick one of those or
maybe two of those. But is that particularly because you write,
I mean you raised a big round, I mean your
first one of the largest black owned first time funds
(24:50):
of sixty six million. Is that ability to invest as
such a wide category purely reflective of the amount that
you raised?
Speaker 2 (25:01):
Not purely I mean I think I think, you know,
the amount that you raise has something to do with
your strategy, but it's not the it's not the entire thing.
Speaker 3 (25:09):
I would actually, you know, flip the order.
Speaker 2 (25:11):
We knew that we wanted to invest at the seed
stage first, and so then we raised a fund that
we thought would be appropriate for the stage that we
wanted to invest in. You know, we we had a
proof of concept fund. We did thirty five companies. You know,
now we're running Fund one. We're going to do thirty
five companies in that fund. Then we're going to raise
another fund, probably going to do around thirty five companies again,
(25:31):
you know, and so we think that kind of playing
in the you know, sixty to one hundred million dollar
fund size window is appropriate given the amount of companies
that we want to back over the you know, three
to four year time horiz, then we want to invest
in them.
Speaker 1 (25:45):
So when you're talking about the LPs that you deal with,
and you know, there's you know, if you picked the
category that you're in, of the level of VC firm
that you have, you know, let's say around one hundred
million dollars, there's a lot of them. There's what is
the LP thinking about, I'm gonna invest in collide versus
(26:07):
ACME firm? What is the differentiating factors that they're looking for?
Speaker 2 (26:14):
I mean, I think they're looking for a lot of things,
you know, I think most LPs are looking for, first
and foremost history of strong performance. So they're going to
want to know, how did your previous funds perform? Have
you consistently returned money to your other LPs. Outside of that,
oftentimes they're looking for some type of competitive edge or
competitive advantage. Usually that means you either have access to
(26:37):
the unique communities that they don't don't have access to,
or you have some type of expertise that makes you
a better selector. You know, have you spent time in
an industry, do you have you know, a specific level
of training or education in a particular way of thinking?
You know, but do you know, do you have access?
Are you going to be a great picker, and do
you have a history of performance?
Speaker 1 (26:59):
In my Saying article, they had this phrase, nails call it.
You like to invest in people building generational companies and
so is there a balance between, hey, this is a
just a great financial play, but it's probably not going
to be here in twenty years, or we want to
be along for the long haul.
Speaker 2 (27:19):
Absolutely, And look, there's a lot of different business models
in kind of venture in the broader kind of private
equity space. If I invested later stage, if I invested
a Series D, Series E, Series F companies, you know,
I wanted to be along for the ride for three
years and then they go public and then I cash out.
Speaker 3 (27:35):
That is a very different type of business model.
Speaker 2 (27:38):
And of course, you know, there might be opportunities to
participate in projects like that in a one off basis,
But the reality is when you invest at the seed stage,
or when you invested the pre seed stage, you're signing
up to be with these companies for a you know,
seven to twelve year journey on average, sometimes longer. You know,
I know seed stage managers that have held positions in
(28:00):
companies for twenty years before you know, before cashing out.
Speaker 3 (28:03):
And if if you're thinking about the.
Speaker 2 (28:05):
World that way, I mean twenty years, twenty years is
a generation, you know, like that, you know, you could
see full turnover of team, of culture, of product even
just you know, think about what you were doing.
Speaker 3 (28:16):
Twenty years ago. The world was completely was completely different.
Speaker 2 (28:21):
You know, we were we were listening, we were listening
to you know, to Nelly, you know, performed videos on
one oh six in park. You know, we were you know,
people were slapping POGs. You know, Instagram didn't exist, Buying
didn't exist. People were playing with Tomagotchi's, you know, like
like the world was a different place. And so when
(28:43):
I say that though, just as a reminder, the founders
that I'm backing today are potentially going to be building
companies that'll play in a world twenty years from now.
Speaker 3 (28:53):
So if we imagine.
Speaker 2 (28:53):
How how different we are now than twenty years ago,
you really taking a.
Speaker 3 (28:58):
Big bet on the future.
Speaker 2 (29:00):
And I believe that the only way to successfully invest
at the seed stage is to have that long deal.
Speaker 1 (29:24):
Black Tech Green Money is a production the Blavity, Afrotech
on the Black Effect Podcast Network and I Hire Media
and it's produced by Morgan, Debonne and me Well Lucas
with the additional production support by Sarah Ergan and Love Beach.
Special thank you to Michael Davis and Kate McDonald. Learn
more about my guest of Other Tech. This rub is
an innovators at afrotech dot com. Enjoying Black Tech Green Money,
(29:46):
Share it with somebody, go get your money, peace and love.
Check me out at the annual Black Effect Podcast Festival
happening Saturday twenty seven in Atlanta. Live podcasts are on
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Black Tech Green Money, and also some of the best
(30:07):
podcasts in the game like Deeply Well with Debbie Brown
and Carefully Reckless. Atlanta is one of my favorite cities
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in my worldview, seeing us successful in every industry and
not having any limits on our potential largely was shaved
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(30:29):
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I'm Will Lucas and this is black tech dreen money.
Aaron Samuels his founder and managing partner at Calli Capitol,
the sixty six million dollar fund so far, which is
the first VC fund simultaneously backed by Amazon, Alphabet and Twitter.
He's also co founder and served as COO at Blavity,
the largest global black media company for millennials in gen
(00:23):
Z and afro Tech, the largest black tech conference in
the world. He began his career as a spoken word
artist before working at Banne and Co. As a strategy
consultant and tell A Sign as a product manager. Iaran
has had a successful professional career, and I wonder how
he tells the story to limited partners, to people who
put money into VC funds, how his career as an
(00:45):
operator signals that he might win at investing their money.
Speaker 2 (00:48):
I think that there's many paths that people take in
order to break into benric capital. I think there's three
primary paths that people take, which is one being a
former operator, which is which is my path and happy
to dig into that a little bit.
Speaker 3 (01:05):
So this is either.
Speaker 2 (01:06):
You've you founded a company or you rose through the
ranks to become a senior operator. At a company, you
learn how to how to do the company building fundamentals,
and then ultimately that teaches you how to identify that
type of talent, that type of support for other companies. Right,
So I think that's path number one, And how do
people break into venture Path number two is you go
(01:28):
through the investor funnel. So oftentimes people will work in
investment banking, work in private equity, maybe work at you know,
some smaller venture capital shops, and then work their way
up to the larger, the larger firms, and then and
then maybe one day start their own, right, but you
kind of have the career as an investor. And I
think number three is I think actually the most common
(01:50):
version of becoming a venture capital venture capital practitioner, which
is that you are just born rich and.
Speaker 1 (01:57):
You just have the best the most and that's the
most common.
Speaker 2 (02:02):
That's actually how the industry, that's how the industry got started.
The industry got started as a cottage industry where wealthy
people effectively just made angel investments as long shot bets
that had very low probability of success. But if they hit,
they hit super big, and it's it's only over the
(02:23):
last you know, twenty to thirty years that that venture
capital as an industry has really started to solidify.
Speaker 3 (02:33):
And so I say that because I think it's.
Speaker 2 (02:36):
Important to remember that for the for the majority of
the history of venture capital, this was a game that
that rich people played by taking taking huge bets that
were of less consequence because they could they could afford
to lose the money that they were playing with. Ye,
And it's only it's only recently that that the that
(02:56):
the asset class has has become formalized. And so uh so,
if you want to become a venture capitalist, the easiest
way to do that is to just be rich for
for those of us, for those of us that don't
have that option, I recommend one of the former two paths,
which is to be to be an operator or to
be or to be an investor. And and my my
(03:17):
way was to be an operator. So now that now
that we're grounded, I had a I had I had
a I had a great career path that led me
to this moment.
Speaker 3 (03:28):
And you know, and I.
Speaker 2 (03:29):
And I clipped from all of my experiences from from
being a spoken word artist to being a consultant, to
being a product manager to being a CEO.
Speaker 3 (03:37):
But but I think that.
Speaker 2 (03:39):
I think it's important to say for for all your listeners,
because there might be people that that walk different paths,
that that.
Speaker 3 (03:44):
Want to find a way to get into venture and
you don't have to just do it my way.
Speaker 1 (03:48):
Yeah that I want to talk about that first way
for a second. The people who are on a career
trajectory and they say, you know what, I want to
find my way here. They're an operator today, what are
the things along the operational journey that are necessary to
be good at this till I have learned?
Speaker 3 (04:07):
Yeah?
Speaker 2 (04:08):
Yeah, yeah, I mean it's a good question. In many ways,
I'm still figuring it out myself. The hard thing about
about venture and a way that it's very distinct from
being an operator, is the feedback loops are way way longer.
So you know, when I was COO at Blavity, you know,
I put in a solid week's worth Monday, Tuesday, Wednesday, Thursday, Friday.
(04:30):
On Friday afternoon, you could walk into my office and
ask me straight up, Hey, Aaron, did you do a
good job this week?
Speaker 3 (04:38):
Yes or no?
Speaker 2 (04:39):
And I could look you dead in the eye and
give you an honest answer, Yeah, I crushed it this week.
Speaker 3 (04:45):
This week, not not so well. It didn't go as well.
Speaker 2 (04:48):
Ye. In the world of venture capital, you don't have that. Yeah,
you know at the end of the year, at the
end of the week on Friday, ask me, yeah, yes, me,
oh well I did I have no I have no idea,
and I won't I won't know, as you pointed pointed out,
I won't know for seven.
Speaker 3 (05:02):
To ten years. I'm if I'm good at this.
Speaker 2 (05:06):
You're making very very very long term, high risk bets.
And you know, the successful firms are going to be
the firms that invest in twenty to fifty companies and
have one or two huge winners. Even if the rest
completely go to zero. It's hard to call it. And
(05:27):
so the things that you do on your journey as
an operator in theory should help you do one of
two things, which is, either help you become a better picker.
It help you help you pick winners, help you identify
the characteristics the attributes of founders, of markets, of operating teams,
of business model ideas that will help increase the likelihood that.
Speaker 3 (05:50):
You that you pick a winner.
Speaker 2 (05:52):
And two learning how to support your portfolio the things
that you do post investment, which is where I think
operators really shine is you know, after you've made the
financial commitment to a company, what else can you do?
Can you help them build their CRM? Can you connect
them to operational leaders, Can you connect them to customers?
(06:14):
Can you connect them to hires? And that not only
will help support the portfolio company after you've invested, but
if companies believe that you're going to be able to
provide that type of support, it might make you more
attractive as a firm to begin with, which might then
help you select or help you have access to better
top of funnel for the investments that you make.
Speaker 1 (06:37):
Now you've raised some really interesting questions for me, And
I've heard plenty of black founders on this podcast, and
many who are wildly successful talk about how there are
so many vcs who want to be in on their deals,
and we always we tend to because there are so
few of us. There's a growing number, but so few
still that you know, just want anybody to give them
(06:59):
a check. But there's a certain segment of black founders
who have checks thrown at them, and they can get
they get to be selective, and so then the VC
is then ultimately trying to pitch themselves. So can you
talk about what it's like to be on both sides
of that to where you're on the blavity side where
people want to give you money, then you're on the
VC tie where you might have to pitch yourself to
(07:20):
some really really interesting startups.
Speaker 2 (07:24):
Yeah, I mean, look this, this game, if anything, will
will help keep you humble. And look, I think I
think that's a good thing. Like it for in some way,
you're kind of always you're always pitching yourself.
Speaker 3 (07:39):
You're always you're always selling something.
Speaker 2 (07:41):
And I think, you know, the older that I've gotten,
the more that I've realized that when you make it
to the top of any field, ultimately you're a seller.
You know. I have a good friend of mine, he's
a climate scientist with a PhD from Harvard. I ask
him how he spends most of his days. He spends
his days right in grants, which you know, it means fundraising,
(08:05):
which means he's raising money for, you know, to support
the projects. I think that's the same thing. If you
become a great founder, become a great investor. At the
end of the day, once you get to the top,
you're raising money, which means that you're selling yourself. You're
pitching yourself, and you're pitching yourself to as a VC,
you're pitching yourself to you know, your LPs to invest
in your fund, just as much as you're pitching yourself
to the founders that you potentially want to invest in.
(08:28):
And so what it means is that you can't take anything.
You can't take anything as a given, you can't take
anything for granted. Understand what your strengths are, and you
need to You need to let the founders know why
it's going to be differentiated to receive a check from
you as opposed to you know, any other lookalike, you know,
small emerging manager or you know, they might be comparing
(08:50):
you to a big box shop. And then I need
to convince them why taking my money is better than
taking money from a twenty two billion dollars Silicon Valley,
you know based firm.
Speaker 1 (09:00):
Yeah. I know you're very passionate about your spoken word poetry,
and I wonder the connections you might see if you
can describe those for us from that sort of creativity
and the business creativity that you have to endure.
Speaker 2 (09:17):
Yeah, I think I think my time my time traveling
as a as a performance poet for for about a
decade I was. I was heavily traveling around the country,
and I learned a lot about a lot about passion,
and a lot about kind of this this notion in
the in the poetry world that we we we call
speculative fiction, uh, this idea of dreaming, uh, dreaming a
(09:42):
better world and writing it into existence. And I think
that in many ways there are strong commonalities between my
favorite artists and my favorite founders in that both of
them are.
Speaker 3 (09:56):
Are dreaming a better world, identifying.
Speaker 2 (09:59):
A way that the world can be happier, healthier, more efficient,
you know, but improved in some way, and then building
that and speaking it into existence. If you can't, if
you can't dream it first, then then you can't then
build it. And for me, that attribute of passion is
(10:19):
something that is probably the number one characteristic that I
look for in founders. I'm looking for a founder that
is identified a hole in the universe that they uniquely
are qualified to fill.
Speaker 3 (10:34):
And I think that that's so important. You know, as we.
Speaker 2 (10:36):
Mentioned earlier in the conversation, you know, the feedback loop
is long. You know, it takes seven to twelve years
for a venture backed startup to get to exit I
need to know that the founder is going to be
just as passionate on year seven as they are on
(10:58):
year one.
Speaker 3 (10:59):
And that doesn't happen if you're just in it for
the money.
Speaker 2 (11:02):
It doesn't happen if it's just a pet project that
you're doing in a classroom. It only happens if if
you're obsessed with the idea, if you're obsessed with the
problem that you're trying to solve, and you really believe
that you will make the world a better place or
at least a more interesting place, if you're able to execute.
Speaker 1 (11:19):
You just spoke to something about you know, founders who
have you know, recognized the void and they can something
that they can uniquely feel how dialed in to the
details of what that future looks like are the most
successful founders, Like, can they talk about the intricacies or
just the concept?
Speaker 3 (11:36):
No, No, they should be they should be really dialed there.
Speaker 2 (11:40):
You know, I think that that the best founders that
I've seen, they can they can paint you, They can
paint you a very very detailed picture of what the
world will look like if their product, service, business model,
you know, serves as a as a disruption to the
status quo.
Speaker 1 (11:57):
To a VC, what do you need to hear in
those details that give you the confidence site this this lady,
this guy is going to go do it.
Speaker 2 (12:07):
Yeah, I mean, I think there's a few things that
I'm looking for, So, you know, and this is true
for a lot of vcs, But you know, one of
the things that we first listen for is is this
problem a big enough problem that if the founder succeeds,
it will create a billion dollar company. You know, they
might be they might be right about the problem, and
they could be super passionate, you know, about it. But
(12:29):
if it's a small problem, then it doesn't necessarily return
enough capital for me or from my LP base.
Speaker 3 (12:35):
For it to move the needle.
Speaker 2 (12:36):
And that's that's kind of where we get into the
concept of is this a venture backable company versus is
it a small business or a large business. That's a
good idea, but maybe not a great idea for a
venture because we need to have those scaled returns. So,
you know, firsts is this problem a big enough problem?
Speaker 3 (12:53):
You know?
Speaker 2 (12:53):
The second thing that I'm usually asking is what about
this founder's background leads me to believe that they are
going to be able to execute on this solution. So
they might be right that it's a great problem and
it would be awesome if somebody solved it, But why
do I believe that you're going to be able to
do it? Have you have you been thinking about this
problem for the last fifteen years? Have you have you
(13:15):
worked on versions or iterations of this problem over the
course of your career? Have you built prototypes, test models,
do you have a PhD in the subject matter?
Speaker 3 (13:23):
Et cetera.
Speaker 2 (13:23):
It doesn't have to be all of those things, but
we're looking for some version of what we call founder
market fit, which is, you know, do we believe that
that this founder has you know, done the things in
their career to you know, to give you strong indication
that they'll be able to solve this problem. Yeah?
Speaker 3 (13:40):
I would, And you know, go go ahead, No, no,
go ahead.
Speaker 2 (13:43):
No.
Speaker 1 (13:43):
I was going to say, like, because I know you
invest at different levels, you know, ceed pre seed, like
you know, one hundred K to the three million I've
read in my research, and I want you to speak
to along the lines that you're already on. But at
how deep are do you expecting them to be in
at each stage? So if if I'm asking for one
hundred k. I'm assuming that you're not expecting as much
(14:05):
as you would if I was asking for three million.
Speaker 2 (14:08):
It's a good question, and I would say, no, that
that's that's not true. You know, for me, the the
dollar value doesn't correlate to the level of.
Speaker 3 (14:20):
Dialed in that I should see with the founder.
Speaker 2 (14:23):
You know, if we're giving you money, it's more correlated
to what the stages of the business and making sure
that you know that we own a significant enough percentage
of the company to match with our portfolio construction. But
if you know, if we're investing, we.
Speaker 3 (14:41):
Usually don't go as low as one hundred k these days.
Speaker 2 (14:43):
But say we're investing a five hundred k check into
a founder, you know, that oftentimes means that the stage
of the business is such that if we invested more
than that, it would dilute the founders too much. And
so you know, we typically don't want to take you know,
more than twelve ownership with the first check. That being said,
(15:04):
will happily invest more at the next round, you know,
at a higher evaluation if the company continues to perform well.
And so you know, I would not say that the
amount of capital is correlated to you know, to our
conviction level of the founder. Rather, it's just correlated to
the stage of the business and how how early or later,
(15:26):
how far along the kind of business trajectory the company's the.
Speaker 1 (15:31):
Company is, Yeah, you spoke to something that I'd like
to bring back up, and you talked about the other
value you bring to a startup, whether that's a network,
whether that's you know, CRM experience, et cetera. And can
you speak to holding that in one part of your
mind in this other idea which I'm a believer of.
And I remember recently hearing a big Finance guide to
(15:53):
say it it's as hard to build a small successful
business as it is a big successful business. And so
if you think about that concept, most of us don't
think that way. They think, if I'm going to build,
you know, a one million dollar business, you know, that's
going to be hard, but it's not going to be
as hard as I was trying to do one hundred million.
But it's hard as hard, you know. So it's how
(16:13):
big do you want to scale your hard how much
do you want to take on? But can you speak
to those concepts of you know, what you believe you
can bring to a business and the level of which
effort you have to put in first, not as much
reward on the back or much on the outside, or
I might as well put my effort toward something that
could be a bigger windfall.
Speaker 3 (16:34):
Yeah.
Speaker 2 (16:34):
No, I mean, I think it's it's a great point,
and I completely wholeheartedly agree with you. Sometimes it's way
harder to build a small business and to build a
big business. And I think the reason that that is is,
you know, the success of the business isn't just about
the outputs.
Speaker 3 (16:47):
It's also about the inputs.
Speaker 2 (16:49):
Right. So you know, if if I raise forty million
dollars and I create a business that is a ten
million dollars a year business, you know, some say that
that's successful, but other people say, well, no, you raised
forty to get to ten.
Speaker 3 (17:04):
You know that you've lost a bunch of money doing that.
Speaker 2 (17:07):
Versus, if I raise five million dollars and I get
to a ten million dollar annual business, I would consider
that significantly more successful. And so I think not everybody
always factors in both the inputs and the outputs when
they're looking at things. I think that that's especially important
when you when you kind of observe the world through
(17:28):
a racial equity lens, because you know, for the most part,
black founders, Latin founders, founders who are women or have
women on the founding team oftentimes are significantly undercapitalized relative
to their straight white male peers, and oftentimes they're judged
(17:49):
based on the same output metrics. So oftentimes they'll say, oh,
look at these two types of business models, they seem similar,
but this company is, you know, generating five x the revenue.
And you know, the first thing that I often ask is, okay,
but they did they raise ten x the amount of capital?
Speaker 3 (18:06):
Because if so, it's.
Speaker 2 (18:07):
Actually it's actually less impressive to get where they got,
and in the long run, ultimately it won't return actual
money for investors because investors have invested in so much
that business needs to not just you know, outperform their
peer set, it needs to outperform their peer set at
a multiple of the amount of dollars that were invested
(18:27):
into the business. And so I think oftentimes it's important
to look at what has this founder done with the
resources that they have.
Speaker 3 (18:36):
Therefore, do I believe that if.
Speaker 2 (18:38):
I put more resources into the business that it will
continue scaling?
Speaker 1 (18:42):
That's really good? And so you brought up, you know,
racial equity into these things, and it makes me think
about the landscape, the legal landscape of trying to support
black founders, women founders, LATINX founders, and even when you're
talking about major capital, where you're talking about college admissions,
colleges can't ask what your background is anymore, you know what,
(19:04):
talk about your thoughts on the efforts to support black
founders intentionally with venture capital, faced with the issues that
we now are presented with.
Speaker 2 (19:15):
Yeah, I mean, these are these are trying times, and
you know, it's it's hard as as someone that's worked
you know, in many ways in the black empowerment space
for the majority of my career, whether as an artist.
Speaker 3 (19:29):
Or you know, with you know, with my time you know,
founding Blavity.
Speaker 2 (19:34):
We've seen the we've seen the pendulum swing back and
forth a few times. You know. I remember when we
when we started Blavity back in twenty fourteen.
Speaker 3 (19:45):
In many ways, it.
Speaker 2 (19:46):
Was a you know, it was a direct response to
you know, what was happening in Ferguson, you know, in
response to the murder of Mike Brown.
Speaker 3 (19:56):
And you know then you.
Speaker 2 (19:57):
Know, there was interest in supporting these the initiatives, that
interest winds down, and then it ramps up again with
the murder of George Floyd, and then again we see
a lot of racial equity initiatives permeate throughout corporate America
and the investing world in twenty twenty, twenty twenty one,
twenty twenty two, and then again now we're seeing the
(20:20):
pendulum swing back with a pushback against critical race theory,
a pushback against affirmative action.
Speaker 3 (20:27):
But for those of us that are practitioners in the space,
this is not new.
Speaker 2 (20:32):
Sometimes it's in vogue to support racial equity, and sometimes
it's very much not in vogue. I think that the
important thing for founders to look at is the people
that have staying power, the folks that have said that
they care about this work and have continued to do
this work whether or not it's popular. And I think
that you know, there are companies like Blavity that you
(20:55):
know will support black people whether or not it's cool
to support black people. And I think that there's a
lot of firms that have demonstrated track records in venture
you know, of investing in people of color corporations that
have done this.
Speaker 3 (21:09):
And I think the most important thing.
Speaker 2 (21:10):
To look for is look at people's track records over
a longer time horizon. Don't just say, you know, do
you have a new initiative or have you do you
have a good press release, you know where you've made
some type of dollar commitment, which, by the way, many
firms made dollar commitments that didn't actually execute on those
dollar commitments, right, So don't look at that, look at
the actual track record of work and say, okay, over
(21:32):
the last ten years, over the last twenty years, you know,
have you you know, how many black founders have you
actually invested in, how many programs have you actually created?
Speaker 3 (21:41):
What were the actual dollars that were deployed versus the
dollars committed?
Speaker 2 (21:45):
And I think that you know, folks rise to the
top in terms of who actually has a track record
of supporting women, in people of color in the space.
Speaker 1 (21:52):
There's this line of an article I read about you,
where the line is Samuels is a believer that the
best endings to store are both surprising yet inevitable. And
I'm gonna allow you to pick which you want to
talk about with just that statement alone. But I think
about how that can be directly related to so many things.
Number One, you know you talk about black people. I
(22:14):
believe black people ultimately find true generational wealth and success
in our country and around the world. We will find
our way to not be the minority. We will be
the I mean that's just numbers, will be the majority
or not a minority. In less than ten years or
about eighteen years. We will find success where we have
(22:34):
not historically found it. People who are gonna win in
startups and business and etc. You can probably find indicators
that said that person's gonna win regardless whether or not
I invest in them, because that's a winner. So that
person's gonna win. Aaron Samuels is going to win, Jeff
Nelson is going to win, Morgan is gonna win whether
or not pick a thing. And so talk about what
(22:56):
you want to talk about with just that statement, like
what do you get? What do you derive from that? Stay?
Speaker 2 (23:02):
Yeah, I mean, I think I think that the clip
that you're you're pulling that from is actually where I
was talking about evaluating founders and and helping founders tell
their story to other investors.
Speaker 3 (23:15):
And I think that when you know, when you're pitching
a deck.
Speaker 2 (23:18):
When you're pitching a company, I think that subtly, that's
what moves That's what moves the needle on getting somebody
else to be convicted in you, is be surprising yet inevitable.
I think if if somebody walks away from your pitch
as a founder and they say, oh, that called me
(23:40):
off guard, but also yeah, that's definitely gonna happen, I
think that that that makes me more likely to invest
in you, because I believe the world is naturally going
there anyways, but you surprised me because you're going to
get there first, or you're going to get there differently,
or you're going to get there better.
Speaker 3 (23:58):
Of course.
Speaker 2 (23:59):
I think that that's true more broadly, you know, than
just founder stories. I originally kind of pay per clipped
that expression from something that we used to say a
lot in the poetry world in terms of an ending
to a poem or an ending to a story and
surprise and get inevitable. But I think that that's what
leaves you at the end of a presentation or the
end of a story, like the wind is sucked out
(24:19):
of you a little bit. And I think it's that
that emotional feeling oftentimes that drives a lot of investing decisions.
Speaker 1 (24:27):
Is you talked about something in that statement there that
you know you can invest that you know, Series ABC potentially,
and you're talking about investing your seed and pre seed.
Is that ability to do because a lot of people
in the venture capital space pick one of those or
maybe two of those. But is that particularly because you write,
I mean you raised a big round, I mean your
first one of the largest black owned first time funds
(24:50):
of sixty six million. Is that ability to invest as
such a wide category purely reflective of the amount that
you raised?
Speaker 2 (25:01):
Not purely I mean I think I think, you know,
the amount that you raise has something to do with
your strategy, but it's not the it's not the entire thing.
Speaker 3 (25:09):
I would actually, you know, flip the order.
Speaker 2 (25:11):
We knew that we wanted to invest at the seed
stage first, and so then we raised a fund that
we thought would be appropriate for the stage that we
wanted to invest in. You know, we we had a
proof of concept fund. We did thirty five companies. You know,
now we're running Fund one. We're going to do thirty
five companies in that fund. Then we're going to raise
another fund, probably going to do around thirty five companies again,
(25:31):
you know, and so we think that kind of playing
in the you know, sixty to one hundred million dollar
fund size window is appropriate given the amount of companies
that we want to back over the you know, three
to four year time horiz, then we want to invest
in them.
Speaker 1 (25:45):
So when you're talking about the LPs that you deal with,
and you know, there's you know, if you picked the
category that you're in, of the level of VC firm
that you have, you know, let's say around one hundred
million dollars, there's a lot of them. There's what is
the LP thinking about, I'm gonna invest in collide versus
(26:07):
ACME firm? What is the differentiating factors that they're looking for?
Speaker 2 (26:14):
I mean, I think they're looking for a lot of things,
you know, I think most LPs are looking for, first
and foremost history of strong performance. So they're going to
want to know, how did your previous funds perform? Have
you consistently returned money to your other LPs. Outside of that,
oftentimes they're looking for some type of competitive edge or
competitive advantage. Usually that means you either have access to
(26:37):
the unique communities that they don't don't have access to,
or you have some type of expertise that makes you
a better selector. You know, have you spent time in
an industry, do you have you know, a specific level
of training or education in a particular way of thinking?
You know, but do you know, do you have access?
Are you going to be a great picker, and do
you have a history of performance?
Speaker 1 (26:59):
In my Saying article, they had this phrase, nails call it.
You like to invest in people building generational companies and
so is there a balance between, hey, this is a
just a great financial play, but it's probably not going
to be here in twenty years, or we want to
be along for the long haul.
Speaker 2 (27:19):
Absolutely, And look, there's a lot of different business models
in kind of venture in the broader kind of private
equity space. If I invested later stage, if I invested
a Series D, Series E, Series F companies, you know,
I wanted to be along for the ride for three
years and then they go public and then I cash out.
Speaker 3 (27:35):
That is a very different type of business model.
Speaker 2 (27:38):
And of course, you know, there might be opportunities to
participate in projects like that in a one off basis,
But the reality is when you invest at the seed stage,
or when you invested the pre seed stage, you're signing
up to be with these companies for a you know,
seven to twelve year journey on average, sometimes longer. You know,
I know seed stage managers that have held positions in
(28:00):
companies for twenty years before you know, before cashing out.
Speaker 3 (28:03):
And if if you're thinking about the.
Speaker 2 (28:05):
World that way, I mean twenty years, twenty years is
a generation, you know, like that, you know, you could
see full turnover of team, of culture, of product even
just you know, think about what you were doing.
Speaker 3 (28:16):
Twenty years ago. The world was completely was completely different.
Speaker 2 (28:21):
You know, we were we were listening, we were listening
to you know, to Nelly, you know, performed videos on
one oh six in park. You know, we were you know,
people were slapping POGs. You know, Instagram didn't exist, Buying
didn't exist. People were playing with Tomagotchi's, you know, like
like the world was a different place. And so when
(28:43):
I say that though, just as a reminder, the founders
that I'm backing today are potentially going to be building
companies that'll play in a world twenty years from now.
Speaker 3 (28:53):
So if we imagine.
Speaker 2 (28:53):
How how different we are now than twenty years ago,
you really taking a.
Speaker 3 (28:58):
Big bet on the future.
Speaker 2 (29:00):
And I believe that the only way to successfully invest
at the seed stage is to have that long deal.
Speaker 1 (29:24):
Black Tech Green Money is a production the Blavity, Afrotech
on the Black Effect Podcast Network and I Hire Media
and it's produced by Morgan, Debonne and me Well Lucas
with the additional production support by Sarah Ergan and Love Beach.
Special thank you to Michael Davis and Kate McDonald. Learn
more about my guest of Other Tech. This rub is
an innovators at afrotech dot com. Enjoying Black Tech Green Money,
(29:46):
Share it with somebody, go get your money, peace and love.
Check me out at the annual Black Effect Podcast Festival
happening Saturday twenty seven in Atlanta. Live podcasts are on
deck from some of your favorite shows, including this one,
Black Tech Green Money, and also some of the best
(30:07):
podcasts in the game like Deeply Well with Debbie Brown
and Carefully Reckless. Atlanta is one of my favorite cities
in the world. I've lived there for two years. Actually,
in my worldview, seeing us successful in every industry and
not having any limits on our potential largely was shaved
by Atlanta. So to be there with you doing this
podcast talking about how we build or leverage technology to
build wealth. Come on, man, doesn't get better. I want
(30:29):
to see you there. Get your tickets today at black
effect dot comback Slash Podcast Festival
Host
Will Lucas
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