April 26, 2025 • 47 mins
Joel Palathinkal introduces Mike Ma, delving into his entrepreneurial journey and the balance between parenthood and business. They explore Mike's early life, education, and tech experiences, highlighting his venture capital insights with Next Cubed. The conversation covers investment focus, growth strategies for startups, and insight-driven marketing approaches. Joel and Mike discuss the importance of organic versus paid marketing, effective tactics in sales and fundraising, and the significance of client education. They touch on startup fundamentals, client-centric solutions, and connecting with Limited Partners. The episode concludes with insights on navigating fundraising challenges, best practices, and achieving work-life balance.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Going back to the first part, that all thesetools and whiz bang and AI and UGC and all the
(00:07):
acronyms, at the end of the day, feel like allthese tools have made some founders weak.
Now I think is you ever seen the movie Top Gun?
Oh, yeah.
Yeah.
Right?
Like, the first is, like, pilots got relying onmissiles and missed the core skill of
dogfighting.
Mhmm.
Yeah.
(00:28):
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
(00:53):
Okay.
So excited about my guest today.
We do this podcast weekly.
My guest specifically plan to wear sky bluetoday.
And it's Wednesday sky blue day, Mike.
Good.
Likewise, you're looking good.
I'm just trying to keep pace with you, Joel.
(01:13):
Well, I'm doing what I can.
Well, everybody, welcome Mike Ma from SidecutVentures.
He's an early stage investor and advisorinvesting in mission driven founders with an
axe to grind in sectors ranging from financialservices, digital health, B2B SaaS, retail, and
sports tech.
He combines the best of his Fortune 500experience working at large companies like Bank
(01:38):
of America, Vanguard.
You know, see, he's also had a stint being aventure backed CXO.
You know, so companies that you know, likeBetterment and Own Up.
So welcome to the show, Mike.
Excited to learn about you.
I'm also gonna plug that he's an accomplishedmost snow sports instructor and member of the
PSIA AASI.
(01:58):
So we'll go the national team.
So go deeper on that too.
But welcome to the show, man.
It's really awesome, you know, getting to knowyou over the last couple months and and
building a friendship.
Yeah, likewise.
I've had such great respect for the firstSutton event I went to in May and when I got to
be part of the cohort, it's been such an honorand incredibly useful for me.
(02:19):
Thank you for everything you do the privatemarkets and specifically emerging manager
community.
Thank you, man.
It's my honor.
I'm very humbled to just be one part of theecosystem and learn from smarter people than
me, like yourself.
So really for me, the joy comes out of justbuilding authentic multi year decade
(02:42):
friendships.
I mean, it's just you bond even more when youtalk about your personal life.
So I mean, just talking about being I mean,we're gonna talk about this, but being a dad,
right?
Being a parent and trying to run a business, Imean, starting a business from scratch, which
is the capital business, which you and I arein, but also just kind of really contributing
(03:03):
supporting founders and building up a truefranchise over time.
So excited to double click on all of that.
I know I gave a quick overview, but why don'tyou tell us who Mike Ma is and go back a little
bit.
Let's reflect on your early upbringings.
Where did you grow up?
What did your parents do?
What did you study?
(03:23):
And how did you make your way into venture?
I know you worked at some big companies like Idid, but let's hear your side of it.
And then I'll probably interject occasionallyjust to maybe add an anecdote or ask a
follow-up question.
Yeah, for sure.
The headline of my story of how I got anadventure feels like the movie Clerks.
(03:44):
I always say like, I'm not supposed to be heretoday.
I don't even know how I got here.
I grew up in Cleveland, Ohio, son of immigrantparents.
You know, I never thought I'd be working intech, let alone venture.
My parents were, like, industrial engineertypes and immigrants and went to public school,
(04:08):
played a lot of soccer, grew up reading forevery single team, you know, Browns, now
Guardians, then Indians, Cavs fan, you know,and I grew up, I thought, a pretty normal life.
I ended up going to Harvard.
Actually, I went, by way of, spending myfreshman year at University of Chicago and went
(04:29):
to Harvard.
And I think I've experienced being a contrarianfor the first time there where I
So did you transfer?
So like after your first year, you just did atransfer into the university?
Is that kind of how you Okay.
Got it.
I 'm talking about being contrarian.
I'm the son of Asian immigrant parents.
(04:51):
I started in biochemistry.
I realized I did not like it.
I ended up with a degree in philosophy.
Much to the chagrin, my parents were like,You're gonna do what?
You can be poor the rest of your life.
Yeah.
I can hear them screaming in the background.
Oh, 100%.
And I spent most of my time my operating thiswhere I got a love for operating.
(05:13):
Believe it or not, my operating experience wasrunning nonprofits.
At Harvard, there is a big nonprofit calledPhillips Brooks House Association, which is a
completely separate 501c3 from Harvard.
And we ran programs.
I ran after school programs.
I lived in housing projects, worked in homelessAnd that was where I really fell in love with
(05:37):
doing stuff and operating.
Lo and behold, as I explored what I would doafter college, I ended up in technology, and
looking at people who valued that experience.
I did, and this was 1998, so I'm old.
I graduated a while ago.
And the company that appreciated my experiencemost was a tech company called, called Trilogy.
(06:02):
And I don't know if you know that, the theTrilogy Mafia is in Austin, Texas in 1998.
And out of there, there's been, It was just awonderful boom of people.
And people don't know about it, but the TrilogyMafia is very strong, right?
A lot of companies, Indeed, Zocdoc, SmirDitSendGrid, HomeAway, these are all Trilogy
(06:27):
founded or Trilogy led companies.
And that's why I fell in love with that.
Did a couple venture backed startups left thereand dotted around to different venture backed
startups.
Went to Boston for a company called IphraseTechnologies, and we were Sequoia, Charles
River, and Greylock back.
I got the reference memes.
(06:49):
Yeah, thought, my god, we gotta qualify IBM.
I was gonna make money.
But we didn't or I didn't as a commonwealther.
Yeah.
I'll skip a lot of steps, but I spend my time,you know, in that time operating in companies
big and small, that's what I love doing.
Sure.
I love getting in the meat and potatoes of thebusiness.
(07:10):
And experimented with a lot of different thingsranging from management consulting where we
focus to being a venture backed CMO to foundingmy own companies, to working at Vanguard and
Bank of America.
And what I found through all those experiences,I really love the start.
(07:34):
I love the zero to one.
I love that part of the process.
So doing a whole bunch of stuff to keep itshort.
In the last four years, I found my path in theventure completely by that circumstance.
Yeah.
There's a company called Next Cubed, and theywere looking to they're an accelerator, and
(07:54):
they were looking for an MD to manage their onbalance sheet and accelerator investments.
I thought to myself, this is right before thepandemic in 2020.
Yeah.
Sure.
And I was like, you know what?
For having been a customer venture for twenty xyears in various forms, I knew remarkably
little how the sausage was made.
And since that time, I I fell in love with it.
(08:14):
And and it was the I I've just found it's theperfect combination of all this useless massive
experience and mistakes I've made betweencoaching, tech, sales, marketing.
So I started that.
We grew out of just doing fintech investmentsto raising a proper fund.
(08:34):
I ran the HBCU Founders Fund.
Oh, wow.
Okay.
Which is, again, it's a bit of a racial para.
It's like you're running.
What you say, what do you think yoursuperpowers are from your industry experience?
And then how do you think that's translated tokind of some of your early venture experiences?
Then how's that evolved over time?
(08:56):
Yeah, I think my superpower is just operatingand being in the leads and understanding what
it feels like.
I probably have a bent towards traction and goto market Mhmm.
Being many times CMO and CRO.
I see the lens I see the world through the lensof how customers see it and how sales
operations and and funnels and and revenue.
That that is where my go to in terms of how Isource and founders who love that.
(09:22):
Yeah.
And that sort of is where the thesis of thisfund was built.
And to a sector basis, obviously, I've spent along time in financial services.
And that has been sort of the bread and butteror cornerstone of where I am.
But that's not the only place I wanna be.
Mhmm.
So I'll look at in addition, you said sports,which is part but, you know, more on thesis for
(09:46):
the fun of the four areas we we really look at,what I call coachable superheroes.
And we'll talk about the coaching.
But the superhero part are sector references,which is mobility, climate, health care,
education.
I ask every founder, what evil are you tryingto vanquish from the world?
Yeah.
And and these are kind of the arc archetypes ofwhere they are.
(10:07):
But I'm open to other ones.
And and I think when you look things through asales and marketing lens Mhmm.
It enables you to be a good generalist,particularly at Sure.
And that's that's what I really enjoy.
And I think you talk about being missiondriven.
So I would say mission driven is kind ofdefinitely trying to improve the world in some
way or just resolve like a massive pain pointlike student debt, right?
I mean, finding out ways to kind of optimizefor student debt, be able to pay it off better,
(10:35):
stuff like that.
I mean, and then, so you have kind of thegrowth lens.
What are some of the growth pathways thatyou've seen for B2B SaaS versus consumer?
And I'd love to just nerd out on this for asecond down to the growth channel.
So I would say, and I'm just going to start.
So I would say B2B, you're heavily probablygoing to conferences and trade shows, that's
(10:59):
really how you're going to meet people.
And it's funny because I work with a lot ofcorporate sponsors.
So their pathway is literally just going totrade shows or just sponsoring events.
When you start getting into consumer or B2B toB2C, there's consumer product facing
(11:20):
opportunities plus there's also like anenterprise side, You're doing a little bit of
both.
So can you tell me your lay of the land of whatyou've seen?
Because you've just really been in the trenchesin terms of if you're early stage consumer app,
like a dating app, should people start usingTikTok for paid ads and then maybe do or just
(11:40):
only organic?
What's kind of the combination that you've seenthat's been working for the founders you're
working with?
Yeah.
And I think there's different stages.
Let thoughts are I'll give a couple broadthings that I I tell every founder.
Mhmm.
You wanna be insight driven.
Yeah.
Insight driven and insight, you know, drivenleads to some notion of eventually scale.
(12:06):
It's almost a too often stated fact that Ithink a lot of founders just try to do things
that don't scale too quickly.
And at the end of the day, and without usingstartup platitudes for those who are in this
space, it's really about working out, workinginwards out.
(12:29):
And each of those have different motions in theB2C and B2B world.
But at the end of the day, you're trying toconvince another carbon based life form who's
got emotions, concerns, their own problems,etcetera, that your solution is a better one.
And so for me, I'm always a big believer in canyou try and find a way to get traction early
(12:53):
and build the inside out the best way to dothat.
So I tell every founder you're supposed tosell, right?
Not currency is financial.
So, one acronym I go through is a rubric.
Call it MART, M A R T.
It's money, access to networks, reputation, andtime.
(13:15):
So, what you're trying to tell in the leanstartup world, whether it's a consumer app or a
B2B app, obviously, all try to build as littleas possible and try to sell early.
So my view is like, can you pre sell?
Can you do the money thing?
Can you pre sell first with the right of lineand just do something more Canva?
(13:36):
If you can't get that, can you get, a, accessto networks?
Right?
In the b to c world, like, obviously, you can'tdo this, but would you hold a lunch and learn
with your friends?
Would you do this?
Would you host a party for me?
In
the b to b world, you'll do like, look, can youcan you bring the rest of the enterprise,
buying cycle between economic buyer, technicalbuyer, etcetera.
(13:57):
That's access to them because someone that'sexpensive.
That's capital a champion has to expend, right?
If you're not gonna give me access to yournetwork, will you give me your name, likeness
and reputation?
The last is time.
If you won't give me that, can you just give metime to talk again?
(14:18):
So my view is like, if you get zero for fourthrough the whole Yeah.
That product isn't it, right?
Yeah.
And so I'm more philosophical based than saylike, oh, you should do TikTok or, oh, you so
that's my philosophy of trying to Yeah.
(14:38):
I do have some general views though.
Right?
And I agree with I'm as someone who grew up inin the paid advertising and paid social work,
That time has come and passed.
I think you can get some scale.
But when I see, particularly at the pre seed,like, oh, they're just going to tell LTV CAC
all through paid.
(15:00):
Look, I've budgeted over, like, nearly a bill aquarter billion dollars of of paid advertising,
you know, dating back a while.
That that is it's gonna be a good tool, but itcan't be the whole shebang.
And it's gonna have to drive on some notion of,I don't wanna use the term morality, but, like,
a real reason to believe that Mhmm.
(15:23):
Your product is remarkable.
And when I say remarkable in the most literalsense of the word, worthy of being remarked.
And then on the b to b side, I I think it'sreally nailing the building the first initial
customer stories, building ROIs.
Sometimes it's propagated by and accelerated byconferences.
(15:45):
And I agree with what you said because that'sjust where people hang out.
And it's not the conference of the events perse, but it's the proximity that lets them
retell the story
Yeah.
About this is why this customer this this hasbeen the best product that's changed my
business.
So I I don't I mean, we can talk about channelsspecifically, but maybe the way I view it too
(16:12):
when I work with the founder, it's I don't comein with a playbook.
We just meet with the founder where they are.
And some people are great on social and have aUGC presence.
Some are terrible at it.
Right?
And they're gonna be good at email.
So there are many ways to skin this cat.
(16:32):
I think bigger principle is I'm more on themeta of is this founder going through and
trying to capture the most cost effective saleat the pre market traction.
Right?
Are they getting for that access of you know,if they can't get the m and money in preorder
or whatever they can acquire from people'snetwork, are they doing it in a capital
(16:56):
efficient way?
And are they getting better?
Is it getting better?
Sure.
Yeah,
they're learning from experiments and maybeoptimizing over time.
What's really interesting too is, I mean, I seesome brands that are organic first, that's a
luxury.
Agreed.
A lot of times, I mean, some of the businessesI've launched, it's all been paid.
(17:18):
And organic has been, look, I do this stuff,which is definitely great.
And this is selfishly a great way for me tolearn a ton of insights in a compact amount of
time and build a bond with someone.
But we're sharing this with the community.
And there's oftentimes probably not a directROI immediately, but then over time, as people
(17:43):
start searching stuff, like your content justcomes up because it's maybe the main only
content that's relevant to that type of topic.
So I think over time, like it becomes a searchnetwork of like just concepts that maybe you
can be a market leader in.
And a lot of times when I think about corporatesponsorships, I thought about being a sponsor
(18:04):
and some of the things that I think about islike, should I sponsor this event or should I
just do my own event and invest that sameamount of money in building the own media?
And that way, you don't have to rely on anotherparty.
That might take more time, right?
Because that person already has the email list,they already have the people that are coming
there.
(18:25):
And I think that's also relevant with fundmanagers building an audience, building
attention because the LPs are listening, right?
They're on Twitter, they're on TikTok, they'reconsuming content and they're viewing some of
the insights that you're sharing and then, youknow, they see your insight again.
(18:47):
Right?
And it's kind of like top of mind what you'rebuilding.
So I think even on the and and we're gonna talkabout that, you know, piece of the pie too in
terms of firm building.
But I've seen there's a lot of fund managersthat have used education and content, which is
much more organic to be able to get theattention of their stakeholders.
So maybe share some thoughts from your opinionI know you're gonna touch a little more on the
(19:13):
tactical, maybe paid search and paid marketingthat you've maybe learned over time and kind of
what you're seeing with the founders.
And then I'd love to hear your thoughts on justorganic, like how the founders are being
successful on the organic side or just contentcreation.
I mean, I would flip it.
I would always start with organic and organicmakes I mean, to me, I think the best If I'm
(19:37):
going to amplify anything these days throughpaid, it would almost have an organic start,
right?
Sure.
And I think those are the parts that, you know,go viral, if you wanna be, you know, very
tactical about it.
But the way I view it is this, has reallychanged in marketing or sales.
(19:58):
People have been doing value add and contentdriven stuff since the beginning of time.
We just have better tools than before.
And I think at the end of the day, everything'sorganic.
The very best paid ads are almost organic inthat, not necessarily from the production
value, but the fact that they hit an emotionthat's so raw that you feel transports you
(20:23):
home.
So I've had some, when I was at Vanguard, I gotto have some ink and I was on Ad Age's A List
Marketers of the Year.
When I was running at Vanguard and I was withNike and Chrysler, you know, and this idea of
just do it, right, is idea of espousingexcellence.
(20:48):
And what it does is really organic, right?
So you can transport someone from Serena toyourself, and the ads are super creative in
that way to what you feel as a mediocre fourpoint zero tennis player on a court, right?
And I think that now we may not all have theorganic, so we may not have the power of Nike's
(21:14):
dollars, but I don't think it changes the same.
This is, friends, this is what stuff I'mworking with my founders on today, is, you
know, when you're positioning your product, Isay over and over again, no one gives a crap
about your solution.
Zero.
Care about their So, we go through a lot oftime and have to just spend time and do empathy
interviews or spend time with them.
(21:35):
What is keeping them up at night?
Forget your company.
Before we started meeting, I tell our familieslike, What five problems existed before?
What did they tell their wife?
What did they tell their husband?
What did they tell their partner?
What did they tell their kids?
And then whatever it is for that, build asolution for that.
And that is a page straight out of you know,any Fortune five hundred marketers book.
(22:01):
And what's great about this day and age, twothings.
Like, one, you have the technology in any seeyour B2B channel to quickly iterate and test
that.
And then secondly, what's even better if you'resmart about it as a founder from a zero to one
perspective, probably only have to influence ahandful, two handfuls of people to get your
(22:23):
product off the ground.
Definitely in the space.
And, that is, I don't know.
My headline on all this is nothing has changedabout the fundamentals, in my opinion, of
marketing and acquisition three decades.
The tools are slightly different.
They're better, faster, and cheaper, which Ithink is awesome and opens up those networks.
(22:48):
And then you put AI on top of that.
It is like I'm actually one of people who aresuper excited about all those possibilities,
not scared about
it.
Yeah.
There's I don't know if you ever followed GregEisenberg, but he posts a lot of content on
just like or, you know, how to how to launch aprofitable business with no venture.
And one of his posts pretty much mapped out,like how do you go out and launch a company
(23:11):
with no capital?
And who is kind of like, look, you know what,create a landing page and then just do like 30,
like a piece of content short form every day onthe topic of your niche.
And that short form, if it's good content, justneed a smartphone.
And there's tools now.
(23:32):
There's like captions.ai.
It's amazing.
So you can go out, upload the file intocaptions.
It'll create all the subtitles.
You can add background music and then post it.
And it actually has like AI avatars now, it'sreally crazy.
But like, you can create a lot of short formcontent at scale with a lot of these AI tools.
And those will hit, there's a link and thatjust drives traffic.
(23:54):
And then that hits, I think it hits anewsletter.
And then you have the newsletter that alsodrives traffic to whatever you're selling over
time, right?
It's a course or it's an app, but you can dothat and kind of continue to do it and be on
every channel and kind of build an organicaudience, especially if it really resonates
with someone.
(24:16):
That's why I've seen that.
Yeah.
To build on that too, like this is the trap ofthose tools though.
Having access to those tools doesn't obviatestrategy.
In fact, it makes it even more critical.
So for instance, I have a lot of founders whowho have the same thing and I give that
feedback.
Mhmm.
Problem is they'll they'll try and, let's say,go from cold prospect to close, and they'll
(24:41):
view the efficacy of that landing page testunder that.
It's like, no, no, no, no.
Like, work through your funnel.
Email capture.
Okay.
Cool.
And the first tranche of tests are just focusedon, can I get anyone to disclose any
information?
The next tranche of tests are, okay, well then,can I get them to repeat or do referral?
(25:03):
And then the last tranche of tests may beactual conversion.
And these are the parts that are You need tounderstand the general notion of funnel
velocity on either B2C side, And then that letsyou figure out how to use those rapid scaling
tools quickly or automated SEO or any of thetools.
(25:26):
But the strategy is gonna be important.
And in fact, that's a huge part of it, like interms of my diligence now, people who get that
strategy piece gonna be the good founders.
The tools these days are easy.
You will never run a good test if you'reexpecting cold conversion from the end, that's
(25:51):
how you view it because you don't understandthe general motion of how funnel velocity and
testing works.
And I see that out in the field when I'mworking with founders, they're like, Look, I'm
doing the AB, I'm doing exactly what Joel said.
I'm running the test, reading Altenberg'sthing.
It's like, Yeah, but you're doing it wrong.
These days, it's so rapid to find and soobvious to find.
(26:15):
So that's sort of is my caveat on thinking notjust through tactics, but strategy.
I think also, when you think about like B2Bsales, there's a trade show, you know,
connection point.
There's a first meeting, right, to your point,like, you don't wanna go in for the close in
(26:36):
the first meeting.
The first meeting maybe just informationgathering, it's consultation, it's maybe, you
know, free advice.
And then the next call is like a detailedsolution call where we're going much more
detail after we got some fact finding.
And then I feel like almost like the sales callthis is one lesson I've I've taken away with
(26:59):
and this goes hand in hand with fundraisingtoo.
Like when you're going in for the close,whether it's for closing a funding round for as
a fund manager or a founder, or you're justtrying to close a b to b sale, Ideally, the
salesperson shouldn't have to be doing a lot ofthe education.
The education on terms of like what we do, howwe support you, where the gaps are, a lot of
(27:25):
that should hopefully be teed up for thesalesperson.
So the salesperson at at that point, they'rereally coming in and and really just getting
that person over the line.
Having that person really, you know, make thatdecision to kind of, you know, purchase that,
B2B SaaS product.
But like if you can automate or engage withlike maybe two to three levels before that,
(27:48):
they have all the information.
That way when you're going for the close,you're not informing them.
And I think that's really strategic, I think,with fund managers creating content where
before you have that Calendly booking withpossibly an LP, they've known everything about
you.
They know everything about your strategy.
You're really just kind of trying to get themover the fence emotionally to take a chance on
(28:12):
you.
That's really all that's left for sales.
If sales is coming in, doing like a thirtyminute pitch, they're telling you what your
thesis is, what your strategy is, they'retelling you all the insights that you've had,
that's going to take like eight more meetings.
But if they've consumed all that because it'sso engaging, your job is only to kind of
emotionally get them over the line.
(28:33):
So sales should not educate.
Yeah, I mean, and to build on that idea too,right?
The biggest thing I end up working with myfounders on in sales is Yeah, exactly.
It should be educating from this likepedagogical, let me tell you about my story.
(28:57):
Because again, axiom number one, they don'tcare about your story.
They don't care about their problems.
I think the way I've been working with a lot ofmy founders to and it's part of my diligence.
Don't worry about the close.
Worry about the open.
Yeah.
So if you understand the problems, like, look,if I were selling you, I would say something,
(29:20):
Joel, like, tell me about your problems.
I got five problems.
Holy crap.
Those sound like hard.
Like, look, you just said one.
First, let me make sure I understand.
You said +1, 234, and five.
Is that right?
Yes.
Great.
Like, look, what happens?
You know, I think I can help with one, two, andfour.
You know, three and Now, can we explore theseproblems in a way that if you solve them,
(29:44):
again, forget me a sec.
What does it mean to your business or youpersonally?
And then the last part is like, oh, well, thankyou for sharing all that with me.
I think I can help with this.
If we work together, I think one, two, and fourcan get 10x, 100x, 20,000,000 better.
(30:05):
And then the sale becomes very easy because youcan contextualize it.
So again, this is an old concept.
Like, I think all this new technology, and thisis why I have this firm, where I spent time
with founders.
Because I actually think we're in this returnto basics, good old fashioned parts of building
(30:30):
a startup.
Because the tools are now all out there.
And now those who are the best at the strategyor, I said this on an AI panel, AI strategy is
be a better human.
Like, that's my AI strategy.
What I just went through is if you've ever readthe book Spin Selling by Neil Rackham, I mean,
(30:51):
book is like 30 years old.
It's still so relevant.
And
what I'm noticing in this crop of founders iswhere it's like that, I don't know whether it's
like a combination of anthropological stuff anda post ZERF world, everything you expect to be
quick and transactional.
Yeah.
What you're seeing is actually the whole worldis reverting to and becoming more cautious of,
(31:13):
and it's requiring higher EQ and acumen ofreally crafting messages quickly that are
bespoke for every single customer, network,community member in your group.
And that's it just makes sense, right?
Why I want my music.
(31:34):
You know, that's why I want my food.
Why wouldn't it be what I want in venture?
And why wouldn't it be what I want for myportfolio?
And I've tried to flip it when I'm pitchingLPs, which I'm at the top of the hour here.
I try and work it from their perspective.
Like, look, they got problems.
They're raising money just me.
They have exposure.
(31:55):
They have a liquidity risk.
Like, I just wanna understand their problemsbefore I pitch my fund.
It's the same exact flow, man.
It's like, look, what problem what problem areyou trying to solve?
How long have you been trying to solve thisproblem?
Why now?
You know?
Like, look, you're a pension fund.
You've been deploying into, you know, privatedebt for a long time.
(32:18):
Like why get into venture right now?
Like you're doing well, you know, like justsometimes you push it away.
You're like, look, what what you know, look, Idon't even know if I can help you.
You seem like, yeah, you're delivering greatreturns, you know, with with the with the
current mandate that you have but like, look, Imean, why are we here?
Why why venture?
You know, and and then they're gonna tell you,they're gonna sell, they're gonna sell you,
(32:41):
they're gonna sell themselves on why they wannaget an adventure, right?
That's like layer one.
Then layer two is like, okay, well, hey, I doearly stage, why early stage?
And I think so.
So I'd love to like, I know we're top of thehour and I got a few more minutes too, but
we'll have to go a little deeper on learningsthat you've had on building the firm.
We talked about portfolio support supportingthe founders, but going out on the road,
(33:05):
meeting LPs, what are without any specificexamples, right, for compliance purposes, but
also maybe what your peers and kind of yoursupport group are saying, what are they stuck
with?
Mean, we all know that it's rough out there.
It's tough to raise at any asset class rightnow.
So what's kind of been, you know, being abetter human, as you mentioned, like, what's
(33:29):
been working to build more authentic, you know,connections and have people have more trust and
get over the line?
Yeah.
I mean, I I think it goes to that where I wishI had something really pithy or it's a people
business.
Mhmm.
And and you need to understand people wherethey are, their insecurities, and and, spend
(33:53):
time trying to get to know them, not just theirbusiness.
And and and more so here than I think, what GPsdo with founders, like, where you know, there
may be a piece of hardware that on this part ofthe end, like, there is no product.
Right?
There is no, like, phone or whatever.
I'm the product.
Yeah.
(34:13):
That product has to be, you know, The challengeis that there is no product and it's
customizable.
The advantage is everything is customizable.
So I think what works is to be as flexible asyou can.
Just meeting the LP where they are and justhaving a longer things I've learned.
(34:36):
Again, this is the first time I've ever raisedfor fun.
I've raised as an operator before.
Just the things I've learned, for those who aremaking that transition, and maybe that's the
lens I can be intelligent.
One, it's just far longer.
This is far longer.
As a founder, can create urgency around acompelling event, a business, a purchase, a
customer.
(34:57):
There is no urgency or very little urgency inthe LPGP world.
Yeah.
It's not like pest control.
You know, it's like, oh, I got an infestationin my house.
Don't care who you are, just come by tomorrow,right?
It's like, hey, do you want to invest in a nonliquid asset where you may get paid ten years
from now?
That's kind of the offering that you'reproviding.
(35:22):
And
the second thing I've learned and I'm trying todo a better job of is I think I've realized
that LPs is particularly in early stage.
They're really learning about the space aswell.
Right?
And no one has it dialed yet.
And it's not to call anyone a charlatan, butit's really I try and bring in my discussions a
(35:46):
spirit of co discovery.
Like, look, LPs who've passed or said theproverbial like, As of today, we're passing on
Fund one.
Like, okay.
I just continue the conversation.
Like, Look, here's what I'm learning in market.
This is what I'm learning.
What do you think?
This is what I did in our cohort several times.
(36:07):
In earnest, like, how do I navigate this weirdconundrum of first close, small checks versus
construction?
As an LP, what do you value more?
Deploying at construction or putting more marksbetween close one and close two?
And what's really cool about my experience atSutton and Cohort nine was you got to see a lot
(36:33):
of different answers.
Yeah.
Mean, sometimes LPs argue with each other too,you know, which is a- There
was a couple.
And you know what?
I try to embrace that.
So what I would encourage other people to do isrealize that you are slightly differential, but
you are a party and a co learner in thatenvironment.
And I think when you can do that, it helps.
(36:55):
What are your peers saying?
Like, what's been working for them and what'skinda like not working, I guess, as far as like
the fundraising process?
Yeah.
First of all, every my caveat at all is this islike really hard, right?
Confluence had a great, like, line, which islike 2024, tough year to raise, great year to
(37:19):
vintage.
I will say this in terms of what's, you know,working and not working.
Everything feels like if you ask the GP on thewrong day, it feels like everything is not
working.
Or, know, what I would say, the part that'sworking is just being on the road, being in
events like yours, spending time.
(37:41):
Is it Look, let's break it down intocategories, right?
Is it conferences?
Is it dinners?
Is it private cocktail events?
Is it golfing?
Is it like playing basketball?
Like, what's kind of a great way to kind ofmaybe have LPs open up?
I think the conference is tough because there'slike everybody is pitching.
Sometimes LPs are pitching you too, becausethey're all Some fund to funds are also raising
(38:05):
as well, you know?
So they're in the most difficult spot.
I think it's Yeah.
To me, it's like serendipitous out You know,like I'll speak about things that don't work,
right?
Things that have not worked and I can speakfirsthand.
Okay, let's just find someone's pitch book.
Email blast.
(38:26):
Yeah.
I mean, everyone's pounding that same emaillist.
That has worked not great.
I do, my cold emails are personalized.
Like, I listen to a podcast like this and I'llsay, and it doesn't, I mean, it requires so
(38:48):
little.
Like the bottom two thirds of the email isboilerplate.
The first third though, I write, and it's justa couple of stories.
I really appreciate what you said aboutemerging managers and about being the first
person in and how you provide This is what Imean.
That stuff works.
(39:08):
It works even better too when you can do it inorthogonal, unconventional ways.
Like for instance, to lead into snowboarding,I've done some LP meetings at Big Snow, our
indoor skiing and snowboarding place in themalls here in Jersey.
(39:30):
It's a way to So, do the thing without havingto do the thing, where you're, okay, we're in a
mating cocktail hour, we will have drinks,there will be GPs and LPs, you'll rotate like
It's much more relaxed and you get to know theperson as a human Whether we slide for a snow a
little bit and then talk about a deal or talkabout what they're worried about.
(39:54):
When you can mix personal and professional,like, that's my best where you can expose
yourself as a human and not just a a DPImachine.
Yeah.
Like, that's that's that's my best advice.
I I don't I say this like having in the middleof my first a very small first micro close.
(40:14):
So I'm not qualified to give good advice, but Ican tell you where I'm seeing better traction
and better promise.
Because again, I'm five months into buildingthe spot, six.
Yeah, mean, I heard is, people I heard thisfrom an LP a little while back.
It's like, choosing who you're investing in isjust like choosing your spouse, right?
(40:35):
Mean, there's no DPI or like analytics that youcan really track.
I mean, there probably is, right?
I mean, I've been married for a little whilenow, so there's no like calculations or
quantitative data, right?
I mean, there's qualitative data, but at theend of the day, you're just choosing, right?
(40:55):
I mean, just like a purchase or just like acommitment to any kind of deal.
It's like, at the end, all that really mattersis kind of the binary, hey, I'm in or not, but
there's some research and some data, but at theend, it's just driven by how you feel, right?
Yeah.
I think what gets you there is kind of buildinga real bonding connection with someone over
(41:17):
like an experience or just kind of getting toknow them over a dinner.
Completely.
I mean, again, I say this, and I think I stoleit from, I don't know, someone else's podcast,
but I say this anyways to my my my founders.
Like, the average marriage do you know this?
You know, the average marriage
Eleven years.
Eight.
I think we're doing Okay.
It doesn't matter.
It's still shorter than a ten year fund withtwo years extensions and it's still shorter
(41:40):
than than a pre seed investment hitting
Well, companies are staying private.
Right? I
I mean, they they could be a decade.
You know?
So my view and and and this is my you know,this is why I I invest this way.
So, my investment philosophy is I deploy advicebefore I give capital because I believe Bring
the marriage analogy all the way through.
(42:01):
I believe in dating, right?
We're gonna spend ten years together.
Like, let's go on a couple of dates, bothpersonally and professionally.
And then the second part too, it's like, it's avery romantic view of venture going back to the
first part and that all these tools and whizbang and AI and UGC and all the acronyms, at
(42:24):
the end of the day, I feel like all these toolshave made some founders weak.
You know, I think, have ever seen the movie TopGun?
Oh, yeah.
Right?
Like, the first is like pilots got relying onmissiles and missed the core skill of
dogfighting.
Yeah.
And that's my view of today as well.
And that's why I invest this way.
(42:47):
I wanna watch them dog fight.
I wanna watch them fly the plane and do allthat stuff.
And those are just things that you get And Iwanna see how they deal with the stress.
Just like Maverick, you know
Well, mean, know, that's what I mean, like yousaid, I mean, kind of the non tech enabled ways
of doing things are are coming back in someways.
We got founder mode, right?
(43:07):
We got people that are like founders that, youknow, back back in 2014, everyone was
delegating, you know, raised a lot of money.
Now with these times, people are trying to pullback a little bit, tighten the belt a little
bit.
And if the founders need to lean in and do someof the work along with the team, it's just how
I'd like to see some of that too.
Yeah.
(43:27):
And I and I and I also to be honest, I wouldlike to see I would like to see VCs get their
hands in it as well because I don't think Ithink the idea of just being at least at early
stage late stage is different.
Like Mhmm.
The hands off spreadsheet only investor.
I I I don't I don't see it, but maybe others doMhmm.
Stage and and that's what that's what'sexciting news for me.
(43:49):
Yeah.
Because you can lean into so you you have thego to market superpower so you can lean in and
help them, you know, with the strategy, right?
That tactical strategy versus just spraying andpraying and just, you know, running a huge ad
spend.
Maybe tactically, there's things that you cancome in.
My superpower is product, right?
So I can go in, play with the app, play withthe web experience, and just give like product
(44:12):
feedback.
Because it's like, you know, from a productstandpoint, why are we building this?
You know, a lot of times people, they build abunch of features and you don't get any revenue
from any of them.
So maybe just stick into one button that maybegenerates revenue.
And then you get asymmetric information.
And now I have no more than every otherinvestor out there and I've earned my stripes
(44:36):
on it.
That's the interchange I think we need to do.
We need to provide founders more.
As investors, we get to know more we get tobetter investment.
Is the very, again, it's a very romantic viewof investing, right?
Information asymmetry.
Absolutely.
I probably have to bounce on having such a goodtime.
(44:58):
No worries.
I know you got to run.
Let me leave you with one question if you gottime.
Sure.
Okay.
So,
you know, tell me about being a dad and raisinga family and being in the city.
Tell me a little bit about that, how that'shelped you.
I mean, I'll I'll start like for me, it's justthe time is scarce, right?
So it kind of forces you to be much moreproductive and and compartmentalize different
(45:20):
things that you need to work on.
So, that's helped for me and then I think, Imean, I'm biased but New York's the best city
in the world, right?
There's the there's opportunity Living in thecity definitely helps because it's easy to get
home, like, quickly and spend more time with,you know, be back with your family.
But would love to hear your thoughts on just,you know, that experience and and just kind of
(45:45):
the New York ecosystem?
I'll give I'll give to I'll give I'll give myanswer on this about being a dad.
I started down this path of of looking atsocial mission driven founders because I need
to explain what I'm doing to my kids in clear,in clear, unfettered, simple language.
I want them to see because they're watching.
(46:06):
Your kids are younger, Joel.
My kids are watching and watching the wholetime, and I wanna be a good example for them
and leave them a legacy.
Not on itself, but just my behaviors andactions.
And I want clear eyed purpose of why I am onthe road one hundred and fifty, two hundred
days a year because I can explain to them,like, what I'm doing gives makes a damn in the
(46:28):
world.
So that is honestly my why and this fund isvery much in honor of them.
Great.
Well, hey, Mike, I really appreciate all thetime.
I'll probably see you this week
I believe we do something.
Are you going to Friendsgiving tomorrow?
Oh, Yeah, I'll be there.
I'll see you there.
So it's been awesome, man.
(46:49):
And thanks for your support, in the communityand to me and, with the community today sharing
all the knowledge.
So really appreciate it.
For sure.
Thank you for all you do.
Bye, man.
Take care.
Bye.
Yeah, bye.
Going back to the first part, that all thesetools and whiz bang and AI and UGC and all the
(00:07):
acronyms, at the end of the day, feel like allthese tools have made some founders weak.
Now I think is you ever seen the movie Top Gun?
Oh, yeah.
Yeah.
Right?
Like, the first is, like, pilots got relying onmissiles and missed the core skill of
dogfighting.
Mhmm.
Yeah.
(00:28):
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
(00:53):
Okay.
So excited about my guest today.
We do this podcast weekly.
My guest specifically plan to wear sky bluetoday.
And it's Wednesday sky blue day, Mike.
Good.
Likewise, you're looking good.
I'm just trying to keep pace with you, Joel.
(01:13):
Well, I'm doing what I can.
Well, everybody, welcome Mike Ma from SidecutVentures.
He's an early stage investor and advisorinvesting in mission driven founders with an
axe to grind in sectors ranging from financialservices, digital health, B2B SaaS, retail, and
sports tech.
He combines the best of his Fortune 500experience working at large companies like Bank
(01:38):
of America, Vanguard.
You know, see, he's also had a stint being aventure backed CXO.
You know, so companies that you know, likeBetterment and Own Up.
So welcome to the show, Mike.
Excited to learn about you.
I'm also gonna plug that he's an accomplishedmost snow sports instructor and member of the
PSIA AASI.
(01:58):
So we'll go the national team.
So go deeper on that too.
But welcome to the show, man.
It's really awesome, you know, getting to knowyou over the last couple months and and
building a friendship.
Yeah, likewise.
I've had such great respect for the firstSutton event I went to in May and when I got to
be part of the cohort, it's been such an honorand incredibly useful for me.
(02:19):
Thank you for everything you do the privatemarkets and specifically emerging manager
community.
Thank you, man.
It's my honor.
I'm very humbled to just be one part of theecosystem and learn from smarter people than
me, like yourself.
So really for me, the joy comes out of justbuilding authentic multi year decade
(02:42):
friendships.
I mean, it's just you bond even more when youtalk about your personal life.
So I mean, just talking about being I mean,we're gonna talk about this, but being a dad,
right?
Being a parent and trying to run a business, Imean, starting a business from scratch, which
is the capital business, which you and I arein, but also just kind of really contributing
(03:03):
supporting founders and building up a truefranchise over time.
So excited to double click on all of that.
I know I gave a quick overview, but why don'tyou tell us who Mike Ma is and go back a little
bit.
Let's reflect on your early upbringings.
Where did you grow up?
What did your parents do?
What did you study?
(03:23):
And how did you make your way into venture?
I know you worked at some big companies like Idid, but let's hear your side of it.
And then I'll probably interject occasionallyjust to maybe add an anecdote or ask a
follow-up question.
Yeah, for sure.
The headline of my story of how I got anadventure feels like the movie Clerks.
(03:44):
I always say like, I'm not supposed to be heretoday.
I don't even know how I got here.
I grew up in Cleveland, Ohio, son of immigrantparents.
You know, I never thought I'd be working intech, let alone venture.
My parents were, like, industrial engineertypes and immigrants and went to public school,
(04:08):
played a lot of soccer, grew up reading forevery single team, you know, Browns, now
Guardians, then Indians, Cavs fan, you know,and I grew up, I thought, a pretty normal life.
I ended up going to Harvard.
Actually, I went, by way of, spending myfreshman year at University of Chicago and went
(04:29):
to Harvard.
And I think I've experienced being a contrarianfor the first time there where I
So did you transfer?
So like after your first year, you just did atransfer into the university?
Is that kind of how you Okay.
Got it.
I 'm talking about being contrarian.
I'm the son of Asian immigrant parents.
(04:51):
I started in biochemistry.
I realized I did not like it.
I ended up with a degree in philosophy.
Much to the chagrin, my parents were like,You're gonna do what?
You can be poor the rest of your life.
Yeah.
I can hear them screaming in the background.
Oh, 100%.
And I spent most of my time my operating thiswhere I got a love for operating.
(05:13):
Believe it or not, my operating experience wasrunning nonprofits.
At Harvard, there is a big nonprofit calledPhillips Brooks House Association, which is a
completely separate 501c3 from Harvard.
And we ran programs.
I ran after school programs.
I lived in housing projects, worked in homelessAnd that was where I really fell in love with
(05:37):
doing stuff and operating.
Lo and behold, as I explored what I would doafter college, I ended up in technology, and
looking at people who valued that experience.
I did, and this was 1998, so I'm old.
I graduated a while ago.
And the company that appreciated my experiencemost was a tech company called, called Trilogy.
(06:02):
And I don't know if you know that, the theTrilogy Mafia is in Austin, Texas in 1998.
And out of there, there's been, It was just awonderful boom of people.
And people don't know about it, but the TrilogyMafia is very strong, right?
A lot of companies, Indeed, Zocdoc, SmirDitSendGrid, HomeAway, these are all Trilogy
(06:27):
founded or Trilogy led companies.
And that's why I fell in love with that.
Did a couple venture backed startups left thereand dotted around to different venture backed
startups.
Went to Boston for a company called IphraseTechnologies, and we were Sequoia, Charles
River, and Greylock back.
I got the reference memes.
(06:49):
Yeah, thought, my god, we gotta qualify IBM.
I was gonna make money.
But we didn't or I didn't as a commonwealther.
Yeah.
I'll skip a lot of steps, but I spend my time,you know, in that time operating in companies
big and small, that's what I love doing.
Sure.
I love getting in the meat and potatoes of thebusiness.
(07:10):
And experimented with a lot of different thingsranging from management consulting where we
focus to being a venture backed CMO to foundingmy own companies, to working at Vanguard and
Bank of America.
And what I found through all those experiences,I really love the start.
(07:34):
I love the zero to one.
I love that part of the process.
So doing a whole bunch of stuff to keep itshort.
In the last four years, I found my path in theventure completely by that circumstance.
Yeah.
There's a company called Next Cubed, and theywere looking to they're an accelerator, and
(07:54):
they were looking for an MD to manage their onbalance sheet and accelerator investments.
I thought to myself, this is right before thepandemic in 2020.
Yeah.
Sure.
And I was like, you know what?
For having been a customer venture for twenty xyears in various forms, I knew remarkably
little how the sausage was made.
And since that time, I I fell in love with it.
(08:14):
And and it was the I I've just found it's theperfect combination of all this useless massive
experience and mistakes I've made betweencoaching, tech, sales, marketing.
So I started that.
We grew out of just doing fintech investmentsto raising a proper fund.
(08:34):
I ran the HBCU Founders Fund.
Oh, wow.
Okay.
Which is, again, it's a bit of a racial para.
It's like you're running.
What you say, what do you think yoursuperpowers are from your industry experience?
And then how do you think that's translated tokind of some of your early venture experiences?
Then how's that evolved over time?
(08:56):
Yeah, I think my superpower is just operatingand being in the leads and understanding what
it feels like.
I probably have a bent towards traction and goto market Mhmm.
Being many times CMO and CRO.
I see the lens I see the world through the lensof how customers see it and how sales
operations and and funnels and and revenue.
That that is where my go to in terms of how Isource and founders who love that.
(09:22):
Yeah.
And that sort of is where the thesis of thisfund was built.
And to a sector basis, obviously, I've spent along time in financial services.
And that has been sort of the bread and butteror cornerstone of where I am.
But that's not the only place I wanna be.
Mhmm.
So I'll look at in addition, you said sports,which is part but, you know, more on thesis for
(09:46):
the fun of the four areas we we really look at,what I call coachable superheroes.
And we'll talk about the coaching.
But the superhero part are sector references,which is mobility, climate, health care,
education.
I ask every founder, what evil are you tryingto vanquish from the world?
Yeah.
And and these are kind of the arc archetypes ofwhere they are.
(10:07):
But I'm open to other ones.
And and I think when you look things through asales and marketing lens Mhmm.
It enables you to be a good generalist,particularly at Sure.
And that's that's what I really enjoy.
And I think you talk about being missiondriven.
So I would say mission driven is kind ofdefinitely trying to improve the world in some
way or just resolve like a massive pain pointlike student debt, right?
I mean, finding out ways to kind of optimizefor student debt, be able to pay it off better,
(10:35):
stuff like that.
I mean, and then, so you have kind of thegrowth lens.
What are some of the growth pathways thatyou've seen for B2B SaaS versus consumer?
And I'd love to just nerd out on this for asecond down to the growth channel.
So I would say, and I'm just going to start.
So I would say B2B, you're heavily probablygoing to conferences and trade shows, that's
(10:59):
really how you're going to meet people.
And it's funny because I work with a lot ofcorporate sponsors.
So their pathway is literally just going totrade shows or just sponsoring events.
When you start getting into consumer or B2B toB2C, there's consumer product facing
(11:20):
opportunities plus there's also like anenterprise side, You're doing a little bit of
both.
So can you tell me your lay of the land of whatyou've seen?
Because you've just really been in the trenchesin terms of if you're early stage consumer app,
like a dating app, should people start usingTikTok for paid ads and then maybe do or just
(11:40):
only organic?
What's kind of the combination that you've seenthat's been working for the founders you're
working with?
Yeah.
And I think there's different stages.
Let thoughts are I'll give a couple broadthings that I I tell every founder.
Mhmm.
You wanna be insight driven.
Yeah.
Insight driven and insight, you know, drivenleads to some notion of eventually scale.
(12:06):
It's almost a too often stated fact that Ithink a lot of founders just try to do things
that don't scale too quickly.
And at the end of the day, and without usingstartup platitudes for those who are in this
space, it's really about working out, workinginwards out.
(12:29):
And each of those have different motions in theB2C and B2B world.
But at the end of the day, you're trying toconvince another carbon based life form who's
got emotions, concerns, their own problems,etcetera, that your solution is a better one.
And so for me, I'm always a big believer in canyou try and find a way to get traction early
(12:53):
and build the inside out the best way to dothat.
So I tell every founder you're supposed tosell, right?
Not currency is financial.
So, one acronym I go through is a rubric.
Call it MART, M A R T.
It's money, access to networks, reputation, andtime.
(13:15):
So, what you're trying to tell in the leanstartup world, whether it's a consumer app or a
B2B app, obviously, all try to build as littleas possible and try to sell early.
So my view is like, can you pre sell?
Can you do the money thing?
Can you pre sell first with the right of lineand just do something more Canva?
(13:36):
If you can't get that, can you get, a, accessto networks?
Right?
In the b to c world, like, obviously, you can'tdo this, but would you hold a lunch and learn
with your friends?
Would you do this?
Would you host a party for me?
In
the b to b world, you'll do like, look, can youcan you bring the rest of the enterprise,
buying cycle between economic buyer, technicalbuyer, etcetera.
(13:57):
That's access to them because someone that'sexpensive.
That's capital a champion has to expend, right?
If you're not gonna give me access to yournetwork, will you give me your name, likeness
and reputation?
The last is time.
If you won't give me that, can you just give metime to talk again?
(14:18):
So my view is like, if you get zero for fourthrough the whole Yeah.
That product isn't it, right?
Yeah.
And so I'm more philosophical based than saylike, oh, you should do TikTok or, oh, you so
that's my philosophy of trying to Yeah.
(14:38):
I do have some general views though.
Right?
And I agree with I'm as someone who grew up inin the paid advertising and paid social work,
That time has come and passed.
I think you can get some scale.
But when I see, particularly at the pre seed,like, oh, they're just going to tell LTV CAC
all through paid.
(15:00):
Look, I've budgeted over, like, nearly a bill aquarter billion dollars of of paid advertising,
you know, dating back a while.
That that is it's gonna be a good tool, but itcan't be the whole shebang.
And it's gonna have to drive on some notion of,I don't wanna use the term morality, but, like,
a real reason to believe that Mhmm.
(15:23):
Your product is remarkable.
And when I say remarkable in the most literalsense of the word, worthy of being remarked.
And then on the b to b side, I I think it'sreally nailing the building the first initial
customer stories, building ROIs.
Sometimes it's propagated by and accelerated byconferences.
(15:45):
And I agree with what you said because that'sjust where people hang out.
And it's not the conference of the events perse, but it's the proximity that lets them
retell the story
Yeah.
About this is why this customer this this hasbeen the best product that's changed my
business.
So I I don't I mean, we can talk about channelsspecifically, but maybe the way I view it too
(16:12):
when I work with the founder, it's I don't comein with a playbook.
We just meet with the founder where they are.
And some people are great on social and have aUGC presence.
Some are terrible at it.
Right?
And they're gonna be good at email.
So there are many ways to skin this cat.
(16:32):
I think bigger principle is I'm more on themeta of is this founder going through and
trying to capture the most cost effective saleat the pre market traction.
Right?
Are they getting for that access of you know,if they can't get the m and money in preorder
or whatever they can acquire from people'snetwork, are they doing it in a capital
(16:56):
efficient way?
And are they getting better?
Is it getting better?
Sure.
Yeah,
they're learning from experiments and maybeoptimizing over time.
What's really interesting too is, I mean, I seesome brands that are organic first, that's a
luxury.
Agreed.
A lot of times, I mean, some of the businessesI've launched, it's all been paid.
(17:18):
And organic has been, look, I do this stuff,which is definitely great.
And this is selfishly a great way for me tolearn a ton of insights in a compact amount of
time and build a bond with someone.
But we're sharing this with the community.
And there's oftentimes probably not a directROI immediately, but then over time, as people
(17:43):
start searching stuff, like your content justcomes up because it's maybe the main only
content that's relevant to that type of topic.
So I think over time, like it becomes a searchnetwork of like just concepts that maybe you
can be a market leader in.
And a lot of times when I think about corporatesponsorships, I thought about being a sponsor
(18:04):
and some of the things that I think about islike, should I sponsor this event or should I
just do my own event and invest that sameamount of money in building the own media?
And that way, you don't have to rely on anotherparty.
That might take more time, right?
Because that person already has the email list,they already have the people that are coming
there.
(18:25):
And I think that's also relevant with fundmanagers building an audience, building
attention because the LPs are listening, right?
They're on Twitter, they're on TikTok, they'reconsuming content and they're viewing some of
the insights that you're sharing and then, youknow, they see your insight again.
(18:47):
Right?
And it's kind of like top of mind what you'rebuilding.
So I think even on the and and we're gonna talkabout that, you know, piece of the pie too in
terms of firm building.
But I've seen there's a lot of fund managersthat have used education and content, which is
much more organic to be able to get theattention of their stakeholders.
So maybe share some thoughts from your opinionI know you're gonna touch a little more on the
(19:13):
tactical, maybe paid search and paid marketingthat you've maybe learned over time and kind of
what you're seeing with the founders.
And then I'd love to hear your thoughts on justorganic, like how the founders are being
successful on the organic side or just contentcreation.
I mean, I would flip it.
I would always start with organic and organicmakes I mean, to me, I think the best If I'm
(19:37):
going to amplify anything these days throughpaid, it would almost have an organic start,
right?
Sure.
And I think those are the parts that, you know,go viral, if you wanna be, you know, very
tactical about it.
But the way I view it is this, has reallychanged in marketing or sales.
(19:58):
People have been doing value add and contentdriven stuff since the beginning of time.
We just have better tools than before.
And I think at the end of the day, everything'sorganic.
The very best paid ads are almost organic inthat, not necessarily from the production
value, but the fact that they hit an emotionthat's so raw that you feel transports you
(20:23):
home.
So I've had some, when I was at Vanguard, I gotto have some ink and I was on Ad Age's A List
Marketers of the Year.
When I was running at Vanguard and I was withNike and Chrysler, you know, and this idea of
just do it, right, is idea of espousingexcellence.
(20:48):
And what it does is really organic, right?
So you can transport someone from Serena toyourself, and the ads are super creative in
that way to what you feel as a mediocre fourpoint zero tennis player on a court, right?
And I think that now we may not all have theorganic, so we may not have the power of Nike's
(21:14):
dollars, but I don't think it changes the same.
This is, friends, this is what stuff I'mworking with my founders on today, is, you
know, when you're positioning your product, Isay over and over again, no one gives a crap
about your solution.
Zero.
Care about their So, we go through a lot oftime and have to just spend time and do empathy
interviews or spend time with them.
(21:35):
What is keeping them up at night?
Forget your company.
Before we started meeting, I tell our familieslike, What five problems existed before?
What did they tell their wife?
What did they tell their husband?
What did they tell their partner?
What did they tell their kids?
And then whatever it is for that, build asolution for that.
And that is a page straight out of you know,any Fortune five hundred marketers book.
(22:01):
And what's great about this day and age, twothings.
Like, one, you have the technology in any seeyour B2B channel to quickly iterate and test
that.
And then secondly, what's even better if you'resmart about it as a founder from a zero to one
perspective, probably only have to influence ahandful, two handfuls of people to get your
(22:23):
product off the ground.
Definitely in the space.
And, that is, I don't know.
My headline on all this is nothing has changedabout the fundamentals, in my opinion, of
marketing and acquisition three decades.
The tools are slightly different.
They're better, faster, and cheaper, which Ithink is awesome and opens up those networks.
(22:48):
And then you put AI on top of that.
It is like I'm actually one of people who aresuper excited about all those possibilities,
not scared about
it.
Yeah.
There's I don't know if you ever followed GregEisenberg, but he posts a lot of content on
just like or, you know, how to how to launch aprofitable business with no venture.
And one of his posts pretty much mapped out,like how do you go out and launch a company
(23:11):
with no capital?
And who is kind of like, look, you know what,create a landing page and then just do like 30,
like a piece of content short form every day onthe topic of your niche.
And that short form, if it's good content, justneed a smartphone.
And there's tools now.
(23:32):
There's like captions.ai.
It's amazing.
So you can go out, upload the file intocaptions.
It'll create all the subtitles.
You can add background music and then post it.
And it actually has like AI avatars now, it'sreally crazy.
But like, you can create a lot of short formcontent at scale with a lot of these AI tools.
And those will hit, there's a link and thatjust drives traffic.
(23:54):
And then that hits, I think it hits anewsletter.
And then you have the newsletter that alsodrives traffic to whatever you're selling over
time, right?
It's a course or it's an app, but you can dothat and kind of continue to do it and be on
every channel and kind of build an organicaudience, especially if it really resonates
with someone.
(24:16):
That's why I've seen that.
Yeah.
To build on that too, like this is the trap ofthose tools though.
Having access to those tools doesn't obviatestrategy.
In fact, it makes it even more critical.
So for instance, I have a lot of founders whowho have the same thing and I give that
feedback.
Mhmm.
Problem is they'll they'll try and, let's say,go from cold prospect to close, and they'll
(24:41):
view the efficacy of that landing page testunder that.
It's like, no, no, no, no.
Like, work through your funnel.
Email capture.
Okay.
Cool.
And the first tranche of tests are just focusedon, can I get anyone to disclose any
information?
The next tranche of tests are, okay, well then,can I get them to repeat or do referral?
(25:03):
And then the last tranche of tests may beactual conversion.
And these are the parts that are You need tounderstand the general notion of funnel
velocity on either B2C side, And then that letsyou figure out how to use those rapid scaling
tools quickly or automated SEO or any of thetools.
(25:26):
But the strategy is gonna be important.
And in fact, that's a huge part of it, like interms of my diligence now, people who get that
strategy piece gonna be the good founders.
The tools these days are easy.
You will never run a good test if you'reexpecting cold conversion from the end, that's
(25:51):
how you view it because you don't understandthe general motion of how funnel velocity and
testing works.
And I see that out in the field when I'mworking with founders, they're like, Look, I'm
doing the AB, I'm doing exactly what Joel said.
I'm running the test, reading Altenberg'sthing.
It's like, Yeah, but you're doing it wrong.
These days, it's so rapid to find and soobvious to find.
(26:15):
So that's sort of is my caveat on thinking notjust through tactics, but strategy.
I think also, when you think about like B2Bsales, there's a trade show, you know,
connection point.
There's a first meeting, right, to your point,like, you don't wanna go in for the close in
(26:36):
the first meeting.
The first meeting maybe just informationgathering, it's consultation, it's maybe, you
know, free advice.
And then the next call is like a detailedsolution call where we're going much more
detail after we got some fact finding.
And then I feel like almost like the sales callthis is one lesson I've I've taken away with
(26:59):
and this goes hand in hand with fundraisingtoo.
Like when you're going in for the close,whether it's for closing a funding round for as
a fund manager or a founder, or you're justtrying to close a b to b sale, Ideally, the
salesperson shouldn't have to be doing a lot ofthe education.
The education on terms of like what we do, howwe support you, where the gaps are, a lot of
(27:25):
that should hopefully be teed up for thesalesperson.
So the salesperson at at that point, they'rereally coming in and and really just getting
that person over the line.
Having that person really, you know, make thatdecision to kind of, you know, purchase that,
B2B SaaS product.
But like if you can automate or engage withlike maybe two to three levels before that,
(27:48):
they have all the information.
That way when you're going for the close,you're not informing them.
And I think that's really strategic, I think,with fund managers creating content where
before you have that Calendly booking withpossibly an LP, they've known everything about
you.
They know everything about your strategy.
You're really just kind of trying to get themover the fence emotionally to take a chance on
(28:12):
you.
That's really all that's left for sales.
If sales is coming in, doing like a thirtyminute pitch, they're telling you what your
thesis is, what your strategy is, they'retelling you all the insights that you've had,
that's going to take like eight more meetings.
But if they've consumed all that because it'sso engaging, your job is only to kind of
emotionally get them over the line.
(28:33):
So sales should not educate.
Yeah, I mean, and to build on that idea too,right?
The biggest thing I end up working with myfounders on in sales is Yeah, exactly.
It should be educating from this likepedagogical, let me tell you about my story.
(28:57):
Because again, axiom number one, they don'tcare about your story.
They don't care about their problems.
I think the way I've been working with a lot ofmy founders to and it's part of my diligence.
Don't worry about the close.
Worry about the open.
Yeah.
So if you understand the problems, like, look,if I were selling you, I would say something,
(29:20):
Joel, like, tell me about your problems.
I got five problems.
Holy crap.
Those sound like hard.
Like, look, you just said one.
First, let me make sure I understand.
You said +1, 234, and five.
Is that right?
Yes.
Great.
Like, look, what happens?
You know, I think I can help with one, two, andfour.
You know, three and Now, can we explore theseproblems in a way that if you solve them,
(29:44):
again, forget me a sec.
What does it mean to your business or youpersonally?
And then the last part is like, oh, well, thankyou for sharing all that with me.
I think I can help with this.
If we work together, I think one, two, and fourcan get 10x, 100x, 20,000,000 better.
(30:05):
And then the sale becomes very easy because youcan contextualize it.
So again, this is an old concept.
Like, I think all this new technology, and thisis why I have this firm, where I spent time
with founders.
Because I actually think we're in this returnto basics, good old fashioned parts of building
(30:30):
a startup.
Because the tools are now all out there.
And now those who are the best at the strategyor, I said this on an AI panel, AI strategy is
be a better human.
Like, that's my AI strategy.
What I just went through is if you've ever readthe book Spin Selling by Neil Rackham, I mean,
(30:51):
book is like 30 years old.
It's still so relevant.
And
what I'm noticing in this crop of founders iswhere it's like that, I don't know whether it's
like a combination of anthropological stuff anda post ZERF world, everything you expect to be
quick and transactional.
Yeah.
What you're seeing is actually the whole worldis reverting to and becoming more cautious of,
(31:13):
and it's requiring higher EQ and acumen ofreally crafting messages quickly that are
bespoke for every single customer, network,community member in your group.
And that's it just makes sense, right?
Why I want my music.
(31:34):
You know, that's why I want my food.
Why wouldn't it be what I want in venture?
And why wouldn't it be what I want for myportfolio?
And I've tried to flip it when I'm pitchingLPs, which I'm at the top of the hour here.
I try and work it from their perspective.
Like, look, they got problems.
They're raising money just me.
They have exposure.
(31:55):
They have a liquidity risk.
Like, I just wanna understand their problemsbefore I pitch my fund.
It's the same exact flow, man.
It's like, look, what problem what problem areyou trying to solve?
How long have you been trying to solve thisproblem?
Why now?
You know?
Like, look, you're a pension fund.
You've been deploying into, you know, privatedebt for a long time.
(32:18):
Like why get into venture right now?
Like you're doing well, you know, like justsometimes you push it away.
You're like, look, what what you know, look, Idon't even know if I can help you.
You seem like, yeah, you're delivering greatreturns, you know, with with the with the
current mandate that you have but like, look, Imean, why are we here?
Why why venture?
You know, and and then they're gonna tell you,they're gonna sell, they're gonna sell you,
(32:41):
they're gonna sell themselves on why they wannaget an adventure, right?
That's like layer one.
Then layer two is like, okay, well, hey, I doearly stage, why early stage?
And I think so.
So I'd love to like, I know we're top of thehour and I got a few more minutes too, but
we'll have to go a little deeper on learningsthat you've had on building the firm.
We talked about portfolio support supportingthe founders, but going out on the road,
(33:05):
meeting LPs, what are without any specificexamples, right, for compliance purposes, but
also maybe what your peers and kind of yoursupport group are saying, what are they stuck
with?
Mean, we all know that it's rough out there.
It's tough to raise at any asset class rightnow.
So what's kind of been, you know, being abetter human, as you mentioned, like, what's
(33:29):
been working to build more authentic, you know,connections and have people have more trust and
get over the line?
Yeah.
I mean, I I think it goes to that where I wishI had something really pithy or it's a people
business.
Mhmm.
And and you need to understand people wherethey are, their insecurities, and and, spend
(33:53):
time trying to get to know them, not just theirbusiness.
And and and more so here than I think, what GPsdo with founders, like, where you know, there
may be a piece of hardware that on this part ofthe end, like, there is no product.
Right?
There is no, like, phone or whatever.
I'm the product.
Yeah.
(34:13):
That product has to be, you know, The challengeis that there is no product and it's
customizable.
The advantage is everything is customizable.
So I think what works is to be as flexible asyou can.
Just meeting the LP where they are and justhaving a longer things I've learned.
(34:36):
Again, this is the first time I've ever raisedfor fun.
I've raised as an operator before.
Just the things I've learned, for those who aremaking that transition, and maybe that's the
lens I can be intelligent.
One, it's just far longer.
This is far longer.
As a founder, can create urgency around acompelling event, a business, a purchase, a
customer.
(34:57):
There is no urgency or very little urgency inthe LPGP world.
Yeah.
It's not like pest control.
You know, it's like, oh, I got an infestationin my house.
Don't care who you are, just come by tomorrow,right?
It's like, hey, do you want to invest in a nonliquid asset where you may get paid ten years
from now?
That's kind of the offering that you'reproviding.
(35:22):
And
the second thing I've learned and I'm trying todo a better job of is I think I've realized
that LPs is particularly in early stage.
They're really learning about the space aswell.
Right?
And no one has it dialed yet.
And it's not to call anyone a charlatan, butit's really I try and bring in my discussions a
(35:46):
spirit of co discovery.
Like, look, LPs who've passed or said theproverbial like, As of today, we're passing on
Fund one.
Like, okay.
I just continue the conversation.
Like, Look, here's what I'm learning in market.
This is what I'm learning.
What do you think?
This is what I did in our cohort several times.
(36:07):
In earnest, like, how do I navigate this weirdconundrum of first close, small checks versus
construction?
As an LP, what do you value more?
Deploying at construction or putting more marksbetween close one and close two?
And what's really cool about my experience atSutton and Cohort nine was you got to see a lot
(36:33):
of different answers.
Yeah.
Mean, sometimes LPs argue with each other too,you know, which is a- There
was a couple.
And you know what?
I try to embrace that.
So what I would encourage other people to do isrealize that you are slightly differential, but
you are a party and a co learner in thatenvironment.
And I think when you can do that, it helps.
(36:55):
What are your peers saying?
Like, what's been working for them and what'skinda like not working, I guess, as far as like
the fundraising process?
Yeah.
First of all, every my caveat at all is this islike really hard, right?
Confluence had a great, like, line, which islike 2024, tough year to raise, great year to
(37:19):
vintage.
I will say this in terms of what's, you know,working and not working.
Everything feels like if you ask the GP on thewrong day, it feels like everything is not
working.
Or, know, what I would say, the part that'sworking is just being on the road, being in
events like yours, spending time.
(37:41):
Is it Look, let's break it down intocategories, right?
Is it conferences?
Is it dinners?
Is it private cocktail events?
Is it golfing?
Is it like playing basketball?
Like, what's kind of a great way to kind ofmaybe have LPs open up?
I think the conference is tough because there'slike everybody is pitching.
Sometimes LPs are pitching you too, becausethey're all Some fund to funds are also raising
(38:05):
as well, you know?
So they're in the most difficult spot.
I think it's Yeah.
To me, it's like serendipitous out You know,like I'll speak about things that don't work,
right?
Things that have not worked and I can speakfirsthand.
Okay, let's just find someone's pitch book.
Email blast.
(38:26):
Yeah.
I mean, everyone's pounding that same emaillist.
That has worked not great.
I do, my cold emails are personalized.
Like, I listen to a podcast like this and I'llsay, and it doesn't, I mean, it requires so
(38:48):
little.
Like the bottom two thirds of the email isboilerplate.
The first third though, I write, and it's justa couple of stories.
I really appreciate what you said aboutemerging managers and about being the first
person in and how you provide This is what Imean.
That stuff works.
(39:08):
It works even better too when you can do it inorthogonal, unconventional ways.
Like for instance, to lead into snowboarding,I've done some LP meetings at Big Snow, our
indoor skiing and snowboarding place in themalls here in Jersey.
(39:30):
It's a way to So, do the thing without havingto do the thing, where you're, okay, we're in a
mating cocktail hour, we will have drinks,there will be GPs and LPs, you'll rotate like
It's much more relaxed and you get to know theperson as a human Whether we slide for a snow a
little bit and then talk about a deal or talkabout what they're worried about.
(39:54):
When you can mix personal and professional,like, that's my best where you can expose
yourself as a human and not just a a DPImachine.
Yeah.
Like, that's that's that's my best advice.
I I don't I say this like having in the middleof my first a very small first micro close.
(40:14):
So I'm not qualified to give good advice, but Ican tell you where I'm seeing better traction
and better promise.
Because again, I'm five months into buildingthe spot, six.
Yeah, mean, I heard is, people I heard thisfrom an LP a little while back.
It's like, choosing who you're investing in isjust like choosing your spouse, right?
(40:35):
Mean, there's no DPI or like analytics that youcan really track.
I mean, there probably is, right?
I mean, I've been married for a little whilenow, so there's no like calculations or
quantitative data, right?
I mean, there's qualitative data, but at theend of the day, you're just choosing, right?
(40:55):
I mean, just like a purchase or just like acommitment to any kind of deal.
It's like, at the end, all that really mattersis kind of the binary, hey, I'm in or not, but
there's some research and some data, but at theend, it's just driven by how you feel, right?
Yeah.
I think what gets you there is kind of buildinga real bonding connection with someone over
(41:17):
like an experience or just kind of getting toknow them over a dinner.
Completely.
I mean, again, I say this, and I think I stoleit from, I don't know, someone else's podcast,
but I say this anyways to my my my founders.
Like, the average marriage do you know this?
You know, the average marriage
Eleven years.
Eight.
I think we're doing Okay.
It doesn't matter.
It's still shorter than a ten year fund withtwo years extensions and it's still shorter
(41:40):
than than a pre seed investment hitting
Well, companies are staying private.
Right? I
I mean, they they could be a decade.
You know?
So my view and and and this is my you know,this is why I I invest this way.
So, my investment philosophy is I deploy advicebefore I give capital because I believe Bring
the marriage analogy all the way through.
(42:01):
I believe in dating, right?
We're gonna spend ten years together.
Like, let's go on a couple of dates, bothpersonally and professionally.
And then the second part too, it's like, it's avery romantic view of venture going back to the
first part and that all these tools and whizbang and AI and UGC and all the acronyms, at
(42:24):
the end of the day, I feel like all these toolshave made some founders weak.
You know, I think, have ever seen the movie TopGun?
Oh, yeah.
Right?
Like, the first is like pilots got relying onmissiles and missed the core skill of
dogfighting.
Yeah.
And that's my view of today as well.
And that's why I invest this way.
(42:47):
I wanna watch them dog fight.
I wanna watch them fly the plane and do allthat stuff.
And those are just things that you get And Iwanna see how they deal with the stress.
Just like Maverick, you know
Well, mean, know, that's what I mean, like yousaid, I mean, kind of the non tech enabled ways
of doing things are are coming back in someways.
We got founder mode, right?
(43:07):
We got people that are like founders that, youknow, back back in 2014, everyone was
delegating, you know, raised a lot of money.
Now with these times, people are trying to pullback a little bit, tighten the belt a little
bit.
And if the founders need to lean in and do someof the work along with the team, it's just how
I'd like to see some of that too.
Yeah.
(43:27):
And I and I and I also to be honest, I wouldlike to see I would like to see VCs get their
hands in it as well because I don't think Ithink the idea of just being at least at early
stage late stage is different.
Like Mhmm.
The hands off spreadsheet only investor.
I I I don't I don't see it, but maybe others doMhmm.
Stage and and that's what that's what'sexciting news for me.
(43:49):
Yeah.
Because you can lean into so you you have thego to market superpower so you can lean in and
help them, you know, with the strategy, right?
That tactical strategy versus just spraying andpraying and just, you know, running a huge ad
spend.
Maybe tactically, there's things that you cancome in.
My superpower is product, right?
So I can go in, play with the app, play withthe web experience, and just give like product
(44:12):
feedback.
Because it's like, you know, from a productstandpoint, why are we building this?
You know, a lot of times people, they build abunch of features and you don't get any revenue
from any of them.
So maybe just stick into one button that maybegenerates revenue.
And then you get asymmetric information.
And now I have no more than every otherinvestor out there and I've earned my stripes
(44:36):
on it.
That's the interchange I think we need to do.
We need to provide founders more.
As investors, we get to know more we get tobetter investment.
Is the very, again, it's a very romantic viewof investing, right?
Information asymmetry.
Absolutely.
I probably have to bounce on having such a goodtime.
(44:58):
No worries.
I know you got to run.
Let me leave you with one question if you gottime.
Sure.
Okay.
So,
you know, tell me about being a dad and raisinga family and being in the city.
Tell me a little bit about that, how that'shelped you.
I mean, I'll I'll start like for me, it's justthe time is scarce, right?
So it kind of forces you to be much moreproductive and and compartmentalize different
(45:20):
things that you need to work on.
So, that's helped for me and then I think, Imean, I'm biased but New York's the best city
in the world, right?
There's the there's opportunity Living in thecity definitely helps because it's easy to get
home, like, quickly and spend more time with,you know, be back with your family.
But would love to hear your thoughts on just,you know, that experience and and just kind of
(45:45):
the New York ecosystem?
I'll give I'll give to I'll give I'll give myanswer on this about being a dad.
I started down this path of of looking atsocial mission driven founders because I need
to explain what I'm doing to my kids in clear,in clear, unfettered, simple language.
I want them to see because they're watching.
(46:06):
Your kids are younger, Joel.
My kids are watching and watching the wholetime, and I wanna be a good example for them
and leave them a legacy.
Not on itself, but just my behaviors andactions.
And I want clear eyed purpose of why I am onthe road one hundred and fifty, two hundred
days a year because I can explain to them,like, what I'm doing gives makes a damn in the
(46:28):
world.
So that is honestly my why and this fund isvery much in honor of them.
Great.
Well, hey, Mike, I really appreciate all thetime.
I'll probably see you this week
I believe we do something.
Are you going to Friendsgiving tomorrow?
Oh, Yeah, I'll be there.
I'll see you there.
So it's been awesome, man.
(46:49):
And thanks for your support, in the communityand to me and, with the community today sharing
all the knowledge.
So really appreciate it.
For sure.
Thank you for all you do.
Bye, man.
Take care.
Bye.
Yeah, bye.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.