Bigger Isn’t Always Better - A VC Reality Check with David Mandel

Is bigger always better?

In this episode of Leadership Levers, we sit down with David Mandel, Managing Partner at Emerging Ventures Capital, to explore how culture, capital, and leadership collide in high-growth environments.

David shares his journey from aspiring AI researcher in the 1980s to serial entrepreneur and now venture investor - offering a rare, full-circle view of leadership evolution. 

Having built and exited four underwriting and finance businesses, he’s experienced firsthand how culture can make or break a company, no matter how strong the financials.

His biggest lesson? “We allowed profits to come first.” David recounts a moment when rapid growth overwhelmed his team and degraded performance - serving as a cautionary tale for today’s “scale at all costs” startup mindset. The stress of tripling business volume without the capacity to support it became a cultural breaking point.

Now, as a venture capitalist, he advises founders to be intentional - question growth goals, hire people who match your values, and focus on execution over ego. His cultural formula is simple—but often overlooked: “Hire the best people, let them do their job, and get out of their way!"

Whether you’re scaling a startup or leading inside a mature organization, this episode challenges conventional thinking - and reminds us that sustainable growth starts with culture and people, not capital.

We'd love your feedback on how we can improve - send us a Text!!

Seeking to align your culture, boost performance & impact your bottom line? Let’s chat—no sales, just real talk about your challenges. Not ready? Join our PL3 Community for free insights & connections.

Episode Transcript

William Gladhart (00:00):
Welcome to the Leadership Levers Podcast.
I'm your host, Will Gladheart,CMO at the Culture Think Tank.
At the Culture Think Tank, weempower leaders with metrics
that strengthen culture, driveperformance and return.
We're here today to learn aboutthe actions leaders have taken
to address organizational change.

(00:21):
Today, our guest is DavidMandel, Managing Partner at
Emerging Ventures Capital.
Thanks for taking the time tojoin us.
Thank you, Will, Excellent.
Well, let's begin by having youshare with our audience a bit
about yourself, your backgroundand your organization.

David Mandel (00:40):
Short version of a long career.
Academically I kind of wentfull circle.
I wanted to be in AI when itwasn't cool to be in AI and I
was an applied math major, adual major, computer science,
applied math undergraduate backin the late 80s and then went to
graduate school for mathematics, never finished the doctorate,

(01:02):
passed the master's comp anddecided to drop out and go into
business because there justwasn't much of a future at the
time in that field.
Long behold where we are todaycompletely different story, but,
funny enough, my interest backthen was looking at artificial
intelligence in particularalthough it was taking different
forms back then and I wasreally interested in the whole
computational side and all ofthat.
So it's really interesting towatch the evolution of that.

(01:25):
Went into business, had arelatively successful career
building and exiting fourseparate businesses around
insurance and finance, all inSouthern California where I
still live today.
You know they were eachdifferent businesses, mostly
underwriting businesses, wherewe were balance sheet companies.
We took on risk, so I was alifelong underwriter, whether it

(01:47):
was having the second largestnon-standard auto insurance
carrier in California, which weexited to Kemper in 2014, or
having a subprime auto lenderand a couple of other businesses
along the way over about a28-year career.
From that, I started to seesome really amazing technologies

(02:09):
around 2011, 2012, and comingto us as vendors at the time.
I got excited and started tolook into that and started doing
some angel investing and itbecame a passion and eventually
I decided I wanted to do thatfull-time and exited my
businesses that I had at thetime and became a full-time
investor and fast forward 2019,partnered, I started a small

(02:32):
fund, emerging Ventures Capital.
We're now on our third fundthere, our third vehicle that
we're investing from.
From that fund, we invest in USand Canada-based B2B tech
startups that are using emergingtechnologies to solve business
challenges.
I get to spend most of my daytalking to the geniuses
inventing the future, and that'skind of cool.

William Gladhart (02:51):
That's yeah, I love that.
I love that you shared.
You've come full circle fromthat mathematics and
quantitative background to nowbeing back in it many years
later in a different version.
And congrats again on yourthird funding of capital.
You know, outlay for theemerging ventures.
That's really exciting.
So you've obviously worked witha lot of different leaders, a
lot of different individuals.

(03:12):
We'll be discussing threequestions today as a startup to
our conversation, would youshare why you believe a healthy
culture is critical?

David Mandel (03:20):
Culture is everything and we've seen it
over and over.
I've seen it myself runningbusinesses as's infectious If
you get one bad apple who'sdisgruntled, before you know it

(03:48):
you have a whole disgruntledteam.
So having an aligned, motivatedteam of people focused on
execution is critical.
When we're today in my role,when I'm judging potential
startups to invest in, what Ilook for is not necessarily
culture, but the founders whoeventually will have the right

(04:11):
culture or instill the rightculture in the team.
What I look for in them is thatspark and that grit combination
of basically, they get stuffdone.
They are go-getters, they'reenthusiastic, passionate and
just no-nonsense moving fast,and they will have that

(04:31):
personality where they'llattract others like them around
them and together they will beable to get a lot done very
quickly on a smaller budget thantheir competition, and that's
how they'll win.

William Gladhart (04:42):
Yeah, no, I love hearing that.
I think that's important forany new leader, but also
seasoned leader, to hear.
Is that progression andtrajectory of culture?
So it's been our experiencethat leaders tend to struggle in
three key areas people, profitor performance.
Kind of.
In your role as mentoring otherleaders in the past or present,

(05:03):
working with individuals whoare growing companies very
quickly, can you identify whichof these areas tend to present a
challenge for leaders in agrowth stage company, or is it a
combination thereof?

David Mandel (05:16):
And that's a softball question, because
obviously it's a combination andthey kind of all lead to each
other, kind of a chicken and theegg.
But if you don't have the rightpeople, then you a chicken and
an egg.
But if you don't have the rightpeople then you won't get the
performance and when you don'tget the performance you won't
get the profits.
So it's hard to say kind ofwhich come first, but I think
it's definitely people first,which will then get the
performance and which will drivethe profits.

(05:37):
The profits are last.

William Gladhart (05:38):
Yeah, absolutely Well, it's
interesting that not everyonepicks people first, but
sometimes it's all around theprofit and that doesn't
necessarily go as well as asplanned.
So can you identify a challengethat negatively impact an
organization that you wereleading, mentoring, growing,
that specifically kind of eitherchallenge the leaders or was
going to have some significantimpact on the outcome of the

(06:01):
organization?

David Mandel (06:03):
on the outcome of the organization.
Yeah, so one of the biggestmistakes I made, actually in my
role as a leader in the priorlife, is allowing profits to
come first at one point.
We had situations so sometimesbigger isn't always better and
that's a hard lesson to learn,especially when you have a sales
mindset in the business.
And we had situation where wewere left in what seemed like an

(06:25):
amazing situation where acouple of large competitors, for
various reasons each differentreasons, some internal, some
external stopped writing newbusiness in a certain field and
left us swamped with morebusiness than we're like three
times the amount of businessthan we used to have.
And initially we were reallyexcited and we allowed it all in

(06:46):
.
Rather than taking any measuresto restrict production, we
thought let's just take it, pileit on right.
But then you have to service itand the continuous strain of
getting more business than youcan handle can be only good for
so long You're straining yourpeople and you can't grow higher
fast enough and train peoplefast enough.

(07:07):
At the end that hurts theculture, that creates a stress,
a continuously strained,stressed environment, and then
performance degrades and at somepoint more is not better and
growing bigger isn't alwaysbetter.
Growing fast is not necessarilygood, and that's advice I give
today to some startup founders.
Where there's, in the venturecapital space in particular,

(07:28):
there's a culture of grow at anycost, just grow, grow, grow,
grow, grow.
I really have to step backsometimes and look at their
plans and really tell them it'slike you know, are you sure you
want to do that?
And my model now a lot of timesis that bigger isn't always
better.
Be careful what you ask forReally think twice about.
Is that what you want?
Or should you stay smaller,grow slower and have a different

(07:50):
culture, a differentenvironment?
Because once you go down thatpath, it's hard to take a step
back.
If you bring in the kind ofinvestment that is going to
expect that kind of growth, thenyou're getting onto a hamster
wheel that's hard to get off ofand I've seen a lot of founders
five years later say I wish I.

William Gladhart (08:09):
Yeah, well, it's reflective is always great.
But at the same time, I reallyappreciate that you mentioned
the opportunity cost of highgrowth, but also high growth
without being able to managethat growth effectively in a
business.
Because as talent moves throughthe pool, we've had instances
of companies we work with thatlast year there were 40

(08:31):
employees, this year there's 125employees.
People don't know each other.
There's things breaking down inthe operational and process
pieces there.
All of a sudden is highturnover they never dealt with
before.
People are in and out.
I think it's really wise thatyou advise individuals to make
that progressive stair step tothe next steps.
Again, you've worked with a lotof different companies.
What was maybe one thing youidentified that helped impact a

(08:54):
culture positively?

David Mandel (08:56):
It's from the top down.
When the founders empower theirpeople to just get, they hire
the best people and they empowerthem and let them do their job
and stay out of their way.
That's high level, but that'sreally what it comes down to.
If you really wanted to stillit down, hire the best people,
let them do their job and getout of their way.

William Gladhart (09:17):
And that's some pretty simple advice, but
very effective.
So, as we wrap up ourconversation today, is there
anything that you would like toadd or share with fellow leaders
from your experience?

David Mandel (09:29):
For me, success and a startup and even a mature
business is all about executionand, as we said in the beginning
, and as you alluded to over andover, that's about the people.
Hire the best people, let themdo what they need to do, and
everything else will fall intoplace.
It's less about structure andmore about good people doing

(09:53):
what they need to do, feelingempowered, and the rest will
fall into place and the profitswill follow.

William Gladhart (09:58):
That's pretty keeping it simple, but I do like
that.
So, David, thank you so muchfor being our guest today on the
Leadership Levers podcast.
I really appreciate yourinsights.
Thank you, Will.
Thank you for joining us on theLeadership Levers podcast.
Find all our Leadership Leversepisodes on the Culture Think
Tank website at www.

(10:20):
theculturethinktank.
com, or listen on your favoritestreaming platform.
We'd love to hear from youabout the challenges you have
faced as a leader.
Tune in weekly as we inviteleaders to share their
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