Tag: Investing

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Internet Culture Startups

Day 479 and High Agency

A corner of startup Twitter was discussing the relative ease of getting connected to power brokers in different industries today. The debate? Does good talent eventually finds its way to resources? The contention from Roon, otherwise known as Mr. Wordcel vs Shape Rotator, is that networking is less crucial in technology than in any other industry because it’s easier to find a way in.

While one can quibble with how true this is for all populations, it is truer than it’s ever been. A large swath of the startup ecosystem is readily available to anyone on social media. We are less constrained by geography and credentialism than we’ve ever been. This is partially because much of the wealth in the current generation came from building social networks or software that benefits from openness. An excellent overview of this is why good angel investing ecosystems prioritize welcoming newcomers by Alex Danco. Most investors want to be available.

But it’s still a challenge to find high agency and high talent people and there are far fewer of them than you’d imagine. And proving you are high agency and high talent isn’t always an intuitive process. Being able to assess if someone has the capacity to build is one of the hardest job a capital allocator will ever have. Judging markets and products and roadmaps is much easier than discerning if someone has the capacity to execute on their dream.

I personally use follow up as my first heuristic. This is partially because I maintain open DMs so literally anyone can and does reach out to me. If someone is able to regularly show up and engage with me and show progress they are better than 90% of people. Honestly go ahead and try! I really am here to help.

You’d be shocked at how often someone pitches me and then I never ever hear from them again. And it’s not because I missed the boat (this happened once to me this year). It’s generally because people are waiting for someone else to act. And this is where people fail. The first rule of startups is figuring out how to create momentum. If you are waiting for me to cut a check you’ve already lost.

I’d like to do a whole post on this topic but I’ve been struggling to get the bulk of it on paper as I’ve got a migraine coming on. But rather than put the post off, I organized an introduction of the subject and put down my first heuristic. Which is ironically exactly what I look for in founders and builders. Did you make some visible amount of progress no matter how bad? Did you put it out into the world? That’s better than most people!

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Preparedness Startups

Day 474 and Unsettled

I don’t own a home. It was never a financial reality before the pandemic. But then the world accelerated and suddenly we had options and money. But still it seemed impossible to commit to another asset with a long time horizon even recently. We were startup people so every other asset was a long hold.

I don’t feel that way anymore. I have written about how I would like to buy a home now. I feel like it’s time to find a place where we can build some stability. But of course the chaotic thesis haunts me.

The chaotic thesis is the one that undergirds all of my investing. The world is getting more complex. That breeds chaos. The biggest macro-level mega trend of the next decade will be adapting to the chaos.

And as it turns out adapting to chaos is really hard. Everything that allows you to cope with the chaos in high demand. A safe place to call your own? Sorry, it’s never been harder to become a homeowner.

I wish I could say that knowing this is our reality makes it easier to adapt. Knowing isn’t the battle as it turns out. Acting on the knowledge is the hard part. Making good decisions under pressure is what will separate out who thrives and who merely survives.

I don’t think it’s going to be pretty and I’m genuinely worried it’s either hit the singularity or a new dark age. There is a reason we think we need the metaverse and it’s not because reality is getting better. It’s because it’s getting worse. I allowed all the web3 kids working out there working on Plan B.

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Startups

Day 470 and Social Skills

Startups are just as much about social hacking as they are hacking something technical. We worship the archetypal “coding nerd” who is brilliant but awkward, but in reality building shit requires an awful lot of social finesse.

I meet with a pretty wide range of founders. A lot of them are clever but relatively normal people. But many founders are fucking beyond weird. I see a lot of neurodivergence. But it’s not all towards the awkwardly autistic. Plenty of founders, especially in web3, are almost supernaturally charismatic. No literally it’s magic.

And that magic is good for making something new. The ability to empathize and listen is hugely prized in leadership. Being present and able to socialize in any social context is key to bring diverse groups together. We are much more willing to throw in our resources behind a founder who can rally us together. And this is just objectively good for the startup. Of course investors want to back that kind of person.

I think some people are offended by this reality. We see endless pop culture depictions of narcissistic sociopaths raising shit tons of money and then destroying their companies. I’m honestly a little sick of it. It’s no secret that Silicon Valley, but capitalism on the whole, occasionally rewards charlatans. I don’t think it’s particularly indicative of anything but human nature. Like Fox Mulder I too want to believe.

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Startups

Day 468 and Small Moves

One of my favorite movies as a kid was Carl Sagan’s Contact. It’s not a great movie but it’s heart is in the right place. It’s a beautiful story about human curiosity and the long timeline of history. In one of the closing sequences the protagonist is told by alien intelligence as embodied by a representation of her dead father that all next steps are “small moves Ellie.”

I never feel like I’m moving fast enough. Every day presses against me. I long to slog through them with speed and alacrity. It’s almost embarrassing how inadequate I find my progress. But then I remember that I move fast. I live ahead of the mainstream. I get to sit in the future that William Gibson said was not evenly distributed. Even if I don’t think I’m particularly good it’s hard to deny just how much of my life is lived in a tiny sliver of humanity.

Someone recently asked me how I moved so fast when I’m dealing with a chronic illness. I found it to be such a shocking question. I feel like I’m glacial compared to the reach of my desires and imagination. But then I’m reminded that even in shorter hours I’m forced to hone my crafts. I can’t afford to waste energy or focus so I simply do not. I imagine this focusing out of need is similar to what parents of young children operate in. The subtle art of not giving a fuck.

And so what if I am slow on a day to day basis. Rome wasn’t built in a day. I’m not a market trader. I invest in ten year cycles. Everything in venture is actually small moves. But as time adds up so do the aggregate of the moves. Compounding interest is up there with gravity as a force. So even when I yearn for more and for it to arrive faster I have to trust the numbers.

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Startups

Day 452 and A Short Guide on Cold Outreach for N00bs

I have an open Twitter DM policy for founders. I encourage outreach to me via all forms of asynchronous communication. I think the hour long pitch, either zoom or IRL, is a bad way to get to know someone. But that doesn’t mean there aren’t rules and social graces involved in cold outreach. I’ve outlined an FAQ on how to get to know me and what I look for in founders but it seems like people would benefit from more tips on how to ask for help and investment on social media.

1. Give Me A Synopsis

If you are sliding into my DMs remember that I’m probably just glancing at an alert. You want to get across just enough context to encourage me to pop in and take a look. And remember you don’t need to convince me with one paragraph. I want to develop a relationship with you and learn how you think. That’s not possible in a few sentences so remember that synopsis is just the beginning.

2 Use A Social Account With Shared Context

I’m always surprised by people who slide into my DMs with 15 followers and a blank Twitter profile and expect an answer. Use the shared social graph to show your interests and tastes. Follow and be followed by people in common with me. You’d be surprised how much meaning I take from seeing you follow and interact with people I respect. The social graph is now we vouch to each other we’d enjoy spending the next ten years working together.

3. Tell Me Who You Are

Make sure you’ve got a link to a personal website so I can learn more about you. It doesn’t have to be elaborate. I think LinkedIn is lame but it’s easy and shows your skills and career path. Hate that? Link your TikTok or Tumblr or blog. Are you anonymous? That’s totally fine. I’ve funded anons. Give me the portions of your identity that are on chain or under your pseudonym so I can learn more from there.

4. Rome Wasn’t Built In A Day

You don’t need to ask me for an hour long pitch or even my email right away. I don’t need perfection from the start. Just say you are working on something and want to talk to me about it. Say you will send me a white paper or a blog post and ask me to read it. Then follow up in a few days to see. Don’t get social anxiety about it either. I probably just forgot or got busy and I love being reminded. Truly.

5. Only Ask for Favors After You’ve Demonstrated Rapport & Competence

I cannot tell you how many times I’ve been asked to for advice, help or investment in DTC, CPG or retail type businesses which I have explicitly said I do not do. But what’s even wilder is that the question right after I say no is almost always “well can you introduce me to other investors that do?” This isn’t an inherently bad thing to ask me. I want to help. If you’ve shown me a great product and I’m engaged and impressed with you as a founder and we’ve had a few interactions ONLY THEN do we have enough of a relationship where it’s ok to ask me to spend my social capital to help you. I can’t help you till I’m sure you can help yourself and that means demonstrating you won’t waste the time of my network as well. Favors are big asks and I only want to use them on people who will reflect well on themselves and on me to my network.

Categories
Finance Startups

Day 432 and Send Me Dealflow

The markets are struggling with the chaos of the Russian invasion of Ukraine. Nickel prices doubled. Gas is skyrocketing. Central banks are due for rate decisions but it’s anyone’s guess as to whether hikes will manifest. But in my neck of the woods uncertainty is our business. Chaotic.capital was founded on the belief that an increasingly complex world would present opportunities. And I’ve never felt more confident in our thesis.

With chaotic.capital we’re identifying, investing in, and supporting companies that adapt our lives and systems to the opportunities that chaos brings. We like companies that are adaptable. We like companies that help others become more adaptable. If you are still building in the chaos and want an early stage pre-seed or seed stage investor I’d like you to drop me a line this week.

I believe it’s possible to find leverage in chaos. As scary as this moment feels, it’s possible to profit off of the many ways the world may change. Geopolitical instability isn’t going away. That’s got downstream effects. Think supply chains remaining strained and snarled. Commodity prices continuing to be wonky. People on the move from immigrants to refuges. All of these problems will be opportunities for businesses to improve lives and make money. Everything from logistics software to temporary housing falls under the chaotic remind.

We are not scared of weird bets. We like unsolved problems. If it’s easy to model your growth and the exact trajectory to success, we may not be your partner (though we’ve got friends who will love you). But if you have a point of view on how chaos will enable your success, we don’t need a perfect plan, just a possible future.

Just to give you you an idea of how serious I am about finding weird shit let me tell you the deals I’m excited about this week. I’ve seen an occult marketplace, a real time DeFi data platform, a marketplace for vegetable gardens, logistics and 3PL software for influencer boutiques, and AI assisted direct to consumer abortions. No problem is too weird for us. So come on and slide into my DMs.

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Finance Internet Culture Startups

Day 414 and Empire’s End

Being at a crypto convention in 2022 is something else. It’s full jubilee at the end of the world shit. You are surrounded by millennials and gen-zers who know in their gut that their future has been stolen from them. And instead of being pissed they decided to build. And they decided to gamble. And it’s not clear which one is which sometimes.

You’d be forgiven being a nihilist right now. Capitalism looks like an excuse for the oligarchs to consolidate state and private power to enrich themselves. Everyone is soaking in student debt and working shitty interchangeable jobs for corporations owned by private equity. No one can afford a house. No one is stable enough for a marriage and children. Our fucking parents won’t retire and won’t listen to reason when we say their neighborhood needs more housing density.

But if you are in crypto the future looks pretty rosy. You are discussing real estate for your second home and the tax advantages of different jurisdictions. Swapping stories about your friend who accidentally didn’t set up estate planning and his company had a big exit and now he’s got to pay full rate to some expensive Democratic run city and state. If you are at the nice cocktail parties you are building the future and the venture capital is flowing and it’s possible that this is the next big wave of innovation. It’s time to fuck around and find out.

But not everyone in crypto is part of the smart money. Not everyone has institutional backing and the professionalization of long time startup operators coming to build real value. Right right below that success is a teeming horde of brutalized and completely marginalized people who are praying they hit it big on some new coin or hot new NFT project. They saw Bitcoin and then Ethereum go to the moon. So now they are praying to the full moon and hoping they ape into the next big thing.

But what’s scarier is that the prevailing attitude is who cares if it’s risky because no one believes they are going to have a future anyway so you might as well gamble. They might get lucky and build the next Google if they join the right DAO and buidl. Yes I typed buidl. I’m a degen too. I’m a doomer that isn’t convinced the empire is going to hold for much longer. And if I’m going to watch it all crash down I want to be a part of building something better for all of us. Maybe we get lucky and innovative faster than the apocalypse. To be fair, humanity always has in the past.

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Startups

Day 412 and Status Anxiety

I’m attending Ethereum Denver through the weekend. If you aren’t familiar it’s a fairly substantial crypto conference with wide appeal and good credibility across the entire ecosystem. I don’t have any special hookups nor do I have a careful plan of attack. It’s my first time attending a large industry event as an investor.

Truthfully I’m incredibly nervous. I’ve never been on this side of the table before. I’ve always attended events as a founder. Which is an entirely different mix of status and social positioning from a venture capitalist. Founders are the cool ones. The top of the social hierarchy. It’s the hardest job in the business and in exchange we revere them as a kind of messianic class. We all place our belief in the people who start building from nothing. Even if you haven’t yet had a big success it’s the act of beginning that has the potency. Anyone who has the guts and steel to try to make something new is part of that rarified class.

So while I ostensibly have more power than I’ve ever had in my entire career, I also feel a slight sense of social anxiety. This is the first time I’ve not been in the anointed. So in a very real sense I’m walking in without any of the power that I’ve had before. And I’m a little scared.

Will people think I’m cool? Will I get invited to go to the right parties? Will the right people want to talk to me? Will I look good enough? Will I be able to hold my own such that I can capture the attention of other peers?

I’m used to needing to network hard to find the money. I’d roll into events with my team squashed into one room and we’d plan out every single minute to maximize our budget. Now I’m the one teams will be searching for pitch.

It’s this strange blend of gaining new status but missing the old place and position in a culture that has me a little nervous. So if you find me at the conference know that if you are scared to strike up a conversation you are not alone. We are all looking to find each other and connect.

Categories
Emotional Work Startups

Day 409 and Glass Cannon

I’m one of those “life optimization” types. I spend a lot of time on various wellness applications. My health stack is deep. Over the years I have attempted to integrate more productivity applications into my life. But beyond a basic “to do” list I’ve found myself failing to maintain anything more complicated than ToDoist task list.

I think my failure is related to the challenge inherent in optimizing deep work. A lot of what passes for work in regular jobs isn’t a big part of my work. I don’t have a ton of alignment meetings because I am accountable to my LPs and my founders but not horizontal stakeholders. I don’t have tons of reporting as again the buy-in is pretty contained.

Ultimately I am only responsible for outcomes. And my outcomes will take years to materialize. I’ve got to get conviction on a decision largely on my own. I am responsible for my own success. And yes it’s a little bit scary to realize I’m in control.

This means I can’t fixate on signifiers of work. Which is largely what productivity apps track. The representation of the work is usually what gets tracked and measured. Arguably I can have my own OKRs (objectives and key results) but I’ve not encountered any personal productivity apps that work well for that framework. It basically boils down to the harsh truth that most of my work is deep work and it’s harder to measure. Deep work is the stuff of slow integration and accumulating knowledge up until it turns into catalysts, breakthroughs and ambush predation.

A gamer friend called me a glass cannon. I’d never heard the term before. It basically boils down to a character that has impressive offensive work but little stamina or defensive work. When they hit crit they go off. Boom! When facing a glass cannon you’d better hope you kill them before they rock your world as if they cycle back for another hit you are fucked. Glass cannons are hard to kill despite the appearance of weakness.

I spend my time preparing for action. Integrating knowledge. Widening my horizons. Intaking potential opportunities. None of which is easy to measure and moderate in traditional work culture. But when I go off you know I’ve made a move. It’s clear. Decisive. But the intervening time between? I’m preparing to go critical. You don’t know when or how but then it’s all in. A glass cannon may be the ideal archetype for venture investors.

Categories
Startups

Day 406 and Like I’m 5

I welcome pitches through my social media channels. I’ve even gone so far as to put together an FAQ for how to pitch me. I hope I do a good job of welcoming founders at even the earliest stages into conversation. But just because I am happy to shoot the shit with you, doesn’t mean I’m capable of organizing your thoughts for you.

Want me to write a check? When you are getting started with me keep it simple. Ground me in the basics so you can take me into the details. Go from whole to parts.

Now I’m not asking you to dumb it down. I’m asking you to do the work to really clarify what you want to make. Maybe it doesn’t sound as impressive in a few sentences, but trust me you must anchor everything in the basics. If you cannot articulate the core product you need to build how in a few sentences, how do you think you will convince me to support your biggest craziest vision?

Now what I am asking you to do is actually quite hard. If you aren’t sure what I mean when I ask for a basic product description spend some time on the excellent Reddit sub “Explain Like I’m 5.” The premise is simple. If you have a complex technical topic that requires expertise you need a way to get it across to a layperson.

You will hire a lot of lay people in your career as a founder. I am just the first one. Educating me on what you are doing is hopefully the start of thousands of explanations you will give on what your company does. Because we both want you to build a big company right?

So while you are welcome to send me your standard 15 page deck, or in depth Notion documentation, or your favorite Substack blog posts, you know I have to explain it to the co-investors, new hires and LPs in a sentence right?

What I don’t want is to dig through dozens of documents and feel even less sure by the end of my diligence of what you are building than when I started. I want to hear a synopsis that excites me to dig in and then go on a journey with you where I learn just how much you’ve thought about it. But if you can’t keep it simple you probably aren’t ready to be fundraising.