Build Mode Bonus: Inside the VC Decision-Making Process with True Ventures' Puneet Agarwal

0:00Isabelle Johannesen: Hello and welcome to Build Mode. Today we have a bonus episode for you. We hit lucky number 100 participants joined so I think we'll kick it off and folks can trickle in as we get started. But hello everyone and welcome to VC Unfiltered, candid advice to help you land the check. This is our first masterclass of the Startup Battlefield series for this year. Very exciting. Just note we will save time for Q &A at the end so please drop your questions in the Q &A feature on Zoom at the bottom down here. and we will get to as many as possible. If you missed our program kickoff call last week, I'm Isabel Johannesson, head of the Startup Battlefield program at TechCrunch and host of the Build Mode podcast.

0:39Isabelle Johannesen: Today I'm in podcast host mode and I'm very excited to be chatting with our special guest, Puneet Agarwal, who is the managing partner at True Ventures, which is a leading early stage VC firm with the mission to empower entrepreneurs at the initial stages of company creation. And True Ventures has been part of at least seven IPOs and 60 acquisitions. We'll let Puneet update that stat if it needs to be, but Puneet and the team certainly know how to pick them. But they also take on some of the biggest risk by leading rounds for very early stage companies like many of you listening today. But that's exactly why we invited Puneet to chat today to give you all an overview of the fundraising landscape in 2026 and how to navigate the process.

1:22Isabelle Johannesen: So we know many of you are planning to raise in the coming months. And even if you're not, this is a unique opportunity to hear some candid advice directly from someone who is writing these coveted checks. So Puneet, thank you so much for joining us today. And before we really dig in, I'd love for you to walk us through what drew you personally to investing at the earliest stages and how that transfers to what you're doing with TrueVentures today.

1:46Puneet Agarwal: Yeah, thank you, Isabel. Really a pleasure to be here and be with all of you. So I'm happy to answer any questions as we go along. But that was a great introduction of TrueVentures But as far as my own kind of personal journey, you know, not to get into too much detail, I've been here almost 18 years. But like a lot of folks at True spent a lot of time in the operating world before getting here. Among our team, we started north of 25 companies ourselves. I didn't actually start a company, but I was at three different startups before I came here, mostly on the product side. I think what drew me to venture, if that was your question, Isabel, was just it's a very interesting job where you get to context switch across so many different domains and people and opportunities.

2:25Puneet Agarwal: I love the early seed stage. And I think primarily I like that is because of the relationships you get to form and the deep bonds and connections you have with founders. So you're usually the first investor. You're usually a very, very trusted partner. You're usually that kind of first call when things aren't working well. and that's something we take really, really seriously. And so it's fun to be a part of that journey through the ups and downs and not to be negative on anything else. I'm just not a person that will come in late and not be involved. It's not fun that way. It's the founder's journey that we're involved in.

3:03Puneet Agarwal: We're there to support them, and we view the founder as our customer. But that's what we really cherish, so that's what drew me to it. And I've been here for 18 years, and I'm still having a lot of fun.

3:12Isabelle Johannesen: That's great. I love the approach TrueVentures takes to early stage investing because it's not every investor that thinks the way you guys do. So, you know, one of the things I love about working with early stage founders is how laser focused they are on building and execution. But to kick us off, I want to sort of do the opposite and zoom way out. Let's talk about the sort of macro environment for fundraising right now. It has shifted dramatically in the last few years. From your perspective at True, what has actually changed and how does it impact an early stage founder's ability to raise?

3:42Puneet Agarwal: Yeah, it's a pretty crazy market, just to be straight up honest with everybody here. There's kind of a have and have not like culture associated with it. So a lot of capital has been concentrated in a smaller set of VC firms, if you just look at capital on a percentage basis, and it's going into a fewer set of companies. And so companies are raising at unprecedented dollar amounts and unprecedented valuations. that's all fine considering the size of the market opportunity when you think about AI and the disruption that's occurring. But in some ways, in a weird, funny way, early stage has been forgotten a little bit, just in sort of the zeitgeist in the air.

4:22Puneet Agarwal: It doesn't mean there's not a lot of firms that are interested and excited about early stage, but what you hear about is just the latest large round in a company that's working. And so I think that makes it harder in some sense for entrepreneurs. There's never been sort of more capital in the system, but you need to be careful and figure out, you know, who is actually interested at the seed in early stages, who's doubling down there, who's thinking contradiction sort of type investing, first to believe type investing, which is where we tend to play versus, you know, consensus based investing, which is let's pour money into something that's already working at whatever valuation makes sense.

4:57Puneet Agarwal: And so that creates a lot of confusion and there's a lot of bifurcation in the market. And there tends to be just more interest and excitement around the money going into the latest big round. And so in that sense, I think you just have to be very careful in terms of who you're talking to. And are you talking to the right investor who is actually thinking about funding somebody who doesn't have all the data and all the numbers and is high risk at that early, early stage? And that's, I think, the biggest thing that's occurred in the market right now.

5:27Isabelle Johannesen: Yeah, I think, you know, we've seen that with a lot of tech crunch coverage as well. So that's one of the reasons Battlefield is so interesting, because we get to look at the earliest stages and give them a platform and, you know, help investors like you surface deal flow. But, you know, of course, AI has changed a lot of this and anyone can build an MVP so quickly these days. And I'm sure at the earliest stages you guys are seeing, I would assume, more startups than ever. Right. But how are you actually evaluating these founders now? It's like what signals do you need to see at that early, early stage beyond just an idea?

5:58Puneet Agarwal: Yeah, I think that's a great point. I mean, it's so easy to build and mimic whatever is out there. At the same time, that's why we're looking at real depth in a founder. And so, you know, a lot of the classic characteristics are still there. You know, do you have an incredible vision? Do you have an entry point that's really exciting today? Are you understanding the trends that are coming in the market? And by the way, we're not trying to be right because we're so early and we're so high risk. We're just looking if the ingredients are there. So does the founder have that kind of resilience? and what we like to say, do they spike in some area?

6:32Puneet Agarwal: Do they spike on kind of product thinking? Do they spike in some technological aspect? Do they spike in the way they think about the domain or just how they even like view the market or describe the market? And so we're looking for that kind of interesting spike, but I would say there's more depth to it because when you think about AI, a lot of times companies come in here and they'll say, hey, I got this really exciting idea. It's already taking off. I've got zero to one million of ARR in like three months or whatever it is. But when you start talking about what is your vision of the world a few years out from now?

7:02So assuming these trends maybe move in this direction or the models get to this level or this goes in this direction, what are you thinking?

7:10Puneet Agarwal: And again, it doesn't have to be right, but a lot of folks stumble at that point because they don't have the depth of research to understand, okay, well, what's really proprietary about what I'm doing? Is there a data advantage here? Is there something that's compounding? And so that's what we're looking a lot at in terms of AI. And we invest across the board. I should have mentioned that earlier. We're in data center infrastructure, things like nuclear power and software in the data center to infrastructure software to apps to hardware to robotics to consumer devices. So in all those categories, though, there's got to be a little more depth now than I would say before in terms of just really understanding all the forces that are coming because the market's moving so fast.

7:48Isabelle Johannesen: So, I mean, you know, I've heard before, of course, that at the earliest stages, it's often the founders that make the biggest difference here. But I'm curious, you know, when you guys are looking for startups and you invest across all of these different industries, do you have sort of a thesis or a hypothesis in different industries that you're betting on? Or are you letting the founders come to you with their ideas from their insights and their respective industries?

8:08Puneet Agarwal: That's a great question. And we've talked about that a lot internally. So founders matter. I do think markets matter as well, even at the very, very early stages. We have a lot of opinions, for sure, because just we're out in industry. A lot of our folks have been in industry before. We're talking to founders all the time. But we don't let our thesis drive where we necessarily invest. We look to fund founders to take us into great markets. That's why early on, we ended up in things like Fitbit and Peloton. It's like we weren't hardware investors, but we found great, compelling founders who were telling us a story that took us into those markets.

8:43Puneet Agarwal: The founders always know their way. They tend to be, not even tend to, they are ahead of VCs, no matter how much all of us are pontificating everywhere and all that kind of stuff. Founders are on the ground and they know. So our whole philosophy has always been, find great founders who take us into great markets and be open-minded and flexible on where things are going. And that's how we tend to operate.

9:05Isabelle Johannesen: Yeah. I mean, Fitbit is also a startup battlefield alumni. So hey, great minds think alike. Like, that's right. Yeah. But I'm curious how you go about finding companies, right? Is it what percentage is inbound versus you actually hunting for them?

9:18Puneet Agarwal: We rely heavily on our founder network. So I would say it's probably like a 60-40. Sometimes it's been 70-30, but it's probably more 60-40 now, maybe even 55-45. But among our, so we have 400 active founders today. There's probably 1 ,500 founders in total over our 20-year history. You know, it's our 20th year actually now. And if you take that set of founders, let's say the over 1500 founders and all their connections, you're talking, you know, 10 to 20 ,000 kind of nodes that are out there that are there for us to mine in a way. And so we do get a lot of inbound from existing founders and we take that very, very seriously.

9:56Puneet Agarwal: And so that's what I say, like maybe 60 % of that is from that kind of channel. And it's something that we cultivate and work on and invest in. And we have our own founder platform that we work really hard on. Our founders are heavily, heavily connected. It's an incredible community. That's one of our biggest differentiators. But we are also outbound. You have to be out there. As my partner, Tony Conrad, likes to say, it's an absolute contact sport, VC is. So you have to be out there. You have to be meeting people. You have to be, you know, could be accelerators. It could be interesting individuals.

10:26Puneet Agarwal: We're having dinners. We're just meeting people all the time. And so we're never kind of sitting back and waiting. I think that's the fastest way to become stale in VC, to be honest. But I will say, you know, I don't know if this is true with other firms, but a large percentage does come from our existing founder network. And that is a flywheel that we have that we continue to build on because every time we add a new founder, the founder network grows. That is something we take very seriously in terms of how we look at deals and find deals.

10:52Isabelle Johannesen: Okay. I love that, you know, venture capital is a contact sport. I think that's fantastic to hear because I think, you know, these days it's so easy to sit behind your computer screen and have a lot of talk, right? But to actually be out.

11:03Puneet Agarwal: Have your agent go out and go find some people. But no, you got to go meet people.

11:07Isabelle Johannesen: Right. So let's talk about that actual funnel, right? So if you have, you know, 20 ,000 nodes at the top of the funnel, how many do you actually take a pitch meeting with? How many checks do you write per year?

11:16Puneet Agarwal: So we'll write roughly 20 checks a year. You know, you get a lot of random inbound over the transome that like, you know, no one's really connected with, but just stuff is coming. That happens every day. So if you take like that number, and I don't have exact numbers, but you're talking several thousand of pitches that are coming in or companies that are, you know, pitching their idea to us. So, you know, that several thousand gets down to, you know, 15 or 20 that we do per year. So it does come down. I would say among our team, you know, we're always out there looking among partners and everybody.

11:48Puneet Agarwal: It's probably in the high hundreds to a thousand that we really look at. And then that whittles down again to the 15, 20. So it's a pretty very small percentage that we end up actually funding. But, you know, we like to say internally, we know it when we see it. You know, if there's that founder magic and that market opportunity that we're really excited and the deal structure works for us, we call it kind of lightning in a bottle. You know, we jump and we go for it. And that comes from, you know, we've been at this for 20 years. So you don't want to overly rely on pattern matching. I really don't like that word too much because the patterns change dramatically.

12:22Puneet Agarwal: You know, we're in a different world now. But when we see it again, we can tell pretty quickly that this is something we want to jump on.

12:29Isabelle Johannesen: Yeah, it's like having, you know, good taste in wine. Your knower gets stronger with every deal I can only imagine.

12:35Puneet Agarwal: Yeah, and you have to unlearn things too. But yes, like you're continuing to hone your craft. You'll hone your instinct, I would say.

12:41Isabelle Johannesen: I would love to go sort of almost phase by phase, right, of your evaluation to give our founders some insight. So going from the thousands, you know, of that top of funnel, let's say inbound, right, and getting into maybe the hundreds or so that you actually look closely at, what are some of the things that would turn you guys off immediately or be intriguing? I mean, if it's something that's written in a cold email, right? That's the kind of the lore of the cold email. Is there something that actually works in a cold email? You know, cold emails are hard.

13:10Puneet Agarwal: I'm going to just tell you the truth because we're seeing so much stuff that if you can't find a connection through a founder or somebody in the network, that's a little bit of a tell in itself and I know a lot of people have said that in the past but it's true like you know so we have to have some filter otherwise it's impossible to almost look at everything like just physics wise like you can't just look at it all and so I think that that intro of some kind is really important and honestly in the first meeting like I like to and our partners like to take a lot of first meetings and it's it's a couple things first of all I think we can help we're not trying to like you know just extract information we in any meeting in any interaction we have our mission is to help all entrepreneurs not just the entrepreneurs we fund we've always said that from the beginning but if you've got to have some inkling like it's something in the background some interesting space you're in it's not a long email for sure it's something quick and to the point and if there's something there and it's introduced by somebody that's like sort of we trust or is in the network more likely than not we're going to take that first meeting and so and then it's in the first meeting it's where we really kind of need to see like i said the spike and there's a lot we can go into detail there if you want you know isabel but just like the spike from that founder that we're kind of looking at um you know the market the markets that we're looking at aren't necessarily big today i mean we're talking about markets that are coming so if they're big today it's probably too late by definition for us so we're looking for stuff that is fundamentally kind of small today but will be very big in the next few years.

14:42Puneet Agarwal: And so we need to see how you're articulating that vision, how clear eyed you are, how you're thinking about it. And again, one thing that I tell founders too, is it's okay to say, I don't know, but it should be grounded in authenticity. Like the worst thing you can do is hand wave an answer because, you know, we can see it. We can kind of tell after, you know, having seen a bunch of this stuff. So we're trying to find like, you know, a depth of an answer. So the more depth you have, it actually becomes more credible when you say, I don't know, versus if you're kind of at the light surface, then you say some weird hand wavy answer.

15:14Puneet Agarwal: It's just, you know, just it discredits everything you've been saying. So we really look at markets and team very, very closely on a number of dimensions. Once once it gets down after that first meeting, but honestly, like you should be able to get that first meeting. There's got to be a way where you can connect through somebody and have just some kind of inkling of an interesting market and your background to get us there.

15:37Isabelle Johannesen: Okay. So no jazz hands when you get that first meeting. Don't wave your hands about it. I get that reference, by the way.

15:45Puneet Agarwal: That's awesome.

15:46Isabelle Johannesen: But I do want to go back a little bit to this idea of networks, right? Because a lot of founders, particularly in Battlefield, but that we see coming into Silicon Valley are not from here. They don't necessarily have the kind of typical Silicon Valley networks that we see and they don't know somebody at Stanford or know somebody at a top VC firm. They're coming from across the world, right? How should founders go about building that network, right? I mean, because even to start building, that's a cold reach out on LinkedIn, right? To even get a coffee chat. What is sort of your advice for beginning that node?

16:19Puneet Agarwal: I think you should reach out to founders to start. I think VCs is also a possibility you're going to get like on some LinkedIn channels, some of that may hit in terms of just like reaching out. The founders, like this is a culture that wants to give and help. You know, we have the same culture. It's all about like helping and giving in the capacity that we can. And so founders like to help other founders. And so if you authentically reach out to a founder, and again, you don't have to go to like the CEO and founder of the hottest company in the valley, but there's, you know, two to 3 ,000 seed companies that are being funded, you know, or that start or looking for funding like almost every quarter.

16:57Puneet Agarwal: And there's lots of Series A's and Series B coming. So whatever vector or area that you're looking at, there's probably really interesting people who are either the founders or even working in some of those companies. And it's just pulling threads. You've got to go and meet and spend time. Again, it's a context board on your side, too. You can't tell me that you can't go and find whatever region you're in, by the way, that they're founders in every single region of the world right now. Some of the best companies we funded are actually in Europe, in different parts of Europe, right? They're all over the place.

17:29Puneet Agarwal: And so there are ways to go meet those folks and you'll be shocked at how much time they're actually willing to give you. And then once you've maybe had a conversation or maybe gotten some advice, you may ask them, hey, would you mind making an intro for me for somebody that you know or somebody in the ecosystem? system. And then it just, it builds. It's not like you can't get it all at once in one shot. Like, you know, you've got to sort of, and again, that's how, you know, when we started True or we were part of the early team at True 20 years ago, no one knew who the heck we were. Like, no one wanted to take me to, we did the same thing.

18:03Puneet Agarwal: We'd call people and be like, hey, you should like, do you know what seed funding is? People didn't even know what seed funding was at the time. Like, hey, do you want to talk to us? Like, hey, let me buy you coffee and let's just chat. I'd love to just tell you about us. I'd love to give you some thoughts about what I'm seeing in the market. And you just build from there. You'd be shocked at how that can actually work. But if you sit in your room and sitting behind your terminal all day, it's not going to work. I think you have to go meet some... I think the other thing is you have to do it face-to-face in a lot of situations, which is counter to a lot of the AI thinking.

18:31Puneet Agarwal: You can use AI to go find some people, but go meet them face-to-face. It makes a huge difference.

18:35Isabelle Johannesen: I love to hear that you guys were in the OG stages of seed fundraising, because that's such an interesting industry. I'm sure it was fascinating to be at the beginning of it. But I want to talk a little bit about, you know, I'm glad to hear you guys invest internationally because it's not a given for every fund here in San Francisco or in the Valley. But just for a little detour here for our international founder friends, what do you expect when you invest in an international founder? Do you think that they should come and move to the U.S., to Silicon Valley? Do they spend a lot of time here? Does it need to be, you know, a priority market for them?

19:06Isabelle Johannesen: What's sort of the tipping point for you?

19:07Puneet Agarwal: You know, we've never made it a we're not one of those firms says you have to be in the valley. I think there is advantages to it, for sure, because obviously there's there's so much talent density here and thinking here. It's everywhere. It's in the air. It's all of that. But we funded folks, you know, even in the U.S., frankly, like we funded folks in Michigan and Wisconsin and other parts of the U.S. where people thought we were crazy. But I think if you can build a great company and you can be distributed, we funded companies like Automatic, HashiCorp, others. They're distributed. They're everywhere.

19:43Puneet Agarwal: They've been very, very successful in that. But I wouldn't say that we're not looking for anything really different. You still have the same characteristics from a founder standpoint, from a market standpoint, market vision standpoint, all of that. And I think you can build a company with a little bit of a valley mindset in terms of being able to move fast, you know, iterate a ton, hire great people wherever they are, all of that. And I think that the other thing that we found is because we have this incredible community, when we fund somebody internationally, they just plug in immediately. So they get in the community and they start just taking advantage of it all.

20:22Puneet Agarwal: They travel a lot. I'm not going to sugarcoat that. They travel a lot. They come here, they spend time when it makes sense. It's sort of like they're omnipresent in many ways. But the criteria is not different at all. In fact, there's a bar in terms of what we want to see and quality and all of that. And that's true internationally, wherever the heck you are.

20:42Isabelle Johannesen: It's funny that people thought you were crazy for investing in companies from Michigan.

20:46Puneet Agarwal: Yeah, Duo Security, which was a huge expert. There was a set of competitive term sheets that said, hey, you have to move here. We were the only one that said, stay there. and it turned out great for them. It's the culture that they built and it worked out incredibly well.

21:00Isabelle Johannesen: Yeah, no, that's great. I want to circle back a little bit to this, you know, the train we were following of top of funnel and going down the process here. So let's talk about a founder who has actually gotten a meeting with you, right? So they're sitting in front of you face to face, as we talked about. What are some green flags and red flags you might look for in a founder who's pitching you for the first time?

21:21Puneet Agarwal: Yeah, I talked about the spike thing, So I won't get into that as much, but there's a couple of things I would say. I do need to know, or we need to know the why, you know, why is this founder here? Why are they going after this specific domain, this specific problem? There's usually some journey that gets there. And if it's not an interesting journey that sort of allowed you, it could be a problem that you faced. It could be just a domain you're from. It could be something you just spent a lot of time and researching. It could be a complete outsider in it, but something brought you into it that got your fancy and got you interested in it.

21:55Puneet Agarwal: If we can't kind of get to the why a little bit and it's more mercenary, it's like, oh, this was just here. And, you know, and we think it's a big market. It doesn't resonate from an authenticity standpoint. The other thing I would say is the market narrative matters a lot, not the market number. So if we see like a random Gartner number or something, nothing against Gartner. or they do a lot of good research, but if we see just sort of a random number, we just don't really care. We wanna know the narrative. So like, why now? Where's the trend? Why is this happening? That's really critical, I would say.

22:29Puneet Agarwal: And again, is the market small and kind of where is it going and where is it building to? So those things matter a lot to us. And I think when founders get like too caught up in the number or too caught up in just sort of telling the slides, going through the slides and just getting into it without like having a conversation back and forth, and don't necessarily have the depth of, it's not that we're trying to get all the answers correctly, but we are watching like how you answer the question. Like, how do you think about it? How do you formulate your response and like think about the different factors that are involved, even if you don't know it fully because you can't know it fully, right?

23:04Puneet Agarwal: There's so many uncertain, there's so many uncertainties to it. So I would say those are a couple of things that are like really important. And of course the other side of it is the red flag. If you're just, you're so focused on a number, you're so focused on just getting through your slides. There's no why into why you're doing whatever you're doing. It's just, you know, why did your team come together? How did that happen? All the backstory is something that seed investors carry a lot about of like how you got there, because you're trying to find founder market fit as well. And so if we can say, oh my gosh, this founder, we think this founder is the best in the world at doing this thing.

23:40Puneet Agarwal: And over the next 10 years is going to navigate this because we know it's going to be crazy. There's going to be all kinds, we're trying to figure out, can you navigate through the craziness of it all? And we think, wow, this person has a vision of where this market is going. That's really, really interesting, compelling, and is swinging for the fences is huge. When those two things come together, that's just incredibly powerful for us. Then we start to lean, we start to lean forward and get, you know, very, very interested in what's going on.

24:08Isabelle Johannesen: I got goosebumps there for a second, because I know what you mean about that power, right? We hear hundreds of startups pitch and started battlefield of course but i completely resonate with what you're what you're saying resonates with me because the the passion that comes through when a founder really is authentically you know pursuing something that they believe is going to change the world or improve the world you can sense that on someone right and it's important to actually hear it from the mouth of a founder i can imagine it's important for you guys to have as many of those conversations in person even the body language like you can tell when a founder is truly you know inspired by what there building themselves and not just a pitch that they're kind of having to give.

24:44Puneet Agarwal: A hundred percent. Agree. Totally.

24:47Isabelle Johannesen: Let's talk a little bit deeper about this. So going into due diligence, right? Are there any, I mean, of course, you're looking at churn and traction and team and market, the numbers of all of this. Are there certain things a founder should have prepared before they start a fundraising process that you guys are immediately going to ask for that might take a while to get or, you know, something that would really make you walk away if they didn't know what you were talking about?

25:06Puneet Agarwal: Yeah, I mean, I would say, in fact, we actually don't really have numbers. So when we invest early, we invest so early that like there typically are no sort of numbers or data that we're really looking at. We may look at like the way they think about a founder thinks about a projection, but we know it's all wrong. Actually, we know it's 100 % going to be wrong. But how you think about it is actually what we're interested in. So there's usually no data. The things we're looking at are kind of founder and market understanding. And so in every deal that we do, we always involve our existing founders.

25:39Puneet Agarwal: So that's one thing to keep in mind. So we use our founder network heavily for diligence. And it's because there's so much expertise. I mean, like, it's crazy not to involve our existing founders. And so we love it when, you know, if you're coming into pitch that, you know, you meet one of our founders and you talk through or it's a couple founders and it's a good way for you to get to know us and like how we work. And it's a good way for us to get to know how you're thinking from a founder lens. That's a really important part of it. We're looking at things on probably a couple dimensions. So first, the founder.

26:12Puneet Agarwal: Oftentimes, and this is just being very honest, it's a lot of back channel. It's not, you know, the classic reference that you may just provide. It's, OK, where have you worked? Who knows you? Who can provide some feedback for us that's like, you know, off the off the, you know, whatever's on your resume kind of thing. So who knows the person, right? Like, you know, that's across the team and there's always networking. There's always connections to somehow to some individual. And then the market thinking is, again, just that involves founders typically, but it's just conjecturing and thinking through like, OK, let's debate like what's interesting, what could happen, what could go right or wrong.

26:47Puneet Agarwal: And by the way, like we are debating this stuff internally. We're not trying to get, as I said, the perfect answer. So we don't have a consensus driven partnership on purpose. So meaning we don't have to agree to actually, like we don't have to 100 % agree on our side of the table to actually make an investment. Someone at the partner level with a couple other folks on the team really love it. And then with the ingredients being right, and then we go forward. But those are the key things that we're diligencing. And we also believe in diligencing very quickly because we don't want to waste the founder's time.

27:19So if the process is dragging for a long time, you know, slow typically means no.

27:25Puneet Agarwal: So, you know, there's some analysis paralysis going on. You're at the seed stage, assuming a lot of you are at the seed stage. Either the partner at the firm gets it and is excited and is leaning in if they're spending weeks and weeks on it, because there's just not as much. There's not there's not like some new pieces of information that are suddenly coming up. There's a lack of information, to be honest. So we try to go fast and quick and but we can get a lot of information in a very quick period of time. And it's usually on those two dimensions, the founder and the market and involving our existing founders and then the expertise on our own team.

27:58Isabelle Johannesen: Yeah, I want to sort of double click on something you said there that you guys are non consensus investors and anyone at the partner level can really kind of spearheaded an investment. That is not the case for a lot of VC firms. And I think it's worth explaining that a little bit to some of the founders that, you know, who within the firm should they really be targeting? Because oftentimes it's, you know, a venture analyst who's kind of the first one to be in contact with the founder that shuffles it up high. And then it might get, you know, boshed at the table because one person doesn't agree.

28:24Isabelle Johannesen: So what what should founders keep in mind when evaluating different investors?

28:28Puneet Agarwal: Yeah, it's a great question. And it's, it's, it's kind of layers of there's, there's potentially layers of politics that you can't control at all times. But the things I can tell you are that, you know, it's okay to talk to, obviously, an associate or principal early on, they often have their ear to the ground, very smart, very connected, and they can get you to the partner. But you do have to get to the partner level. The thing you have to assess is, does that partner have decision-making authority? Are they telling you things that sound good, but in fact, aren't really decisions because somebody else at some higher level has to make the decision?

29:08Puneet Agarwal: That's hard to totally know because some of that stuff is obfuscated and hidden. That can come from other references that you can do with other founders to say like, okay, what was your experience with this particular partner? Or you can actually look at the background of the partner. Have they done deals? Have they invested as part of their job yet? How long have they been there? Even if they're new, they still could probably have a lot of capacity. But the question is like, do they have the juice to get it done in a way? And so we've decentralized a lot of decision making. We have a really trusted partnership.

29:44Puneet Agarwal: We give a lot of authority to each partner. We bring everybody in, we have a written culture, we have no politics, everything's done as a team, we don't have attribution. So I would say we're a little unique in that way. We're pretty transparent about the process, but you are going to run into situations where it's not as transparent. And the best thing you can do is just make sure you get in front of the right partner who can make decisions and just make sure you're kind of constantly communicating so that you know what the most frustrating thing that can happen is you know you get some statement from one founder and then it all sounds great and then you know two days later you hear something else because the communication channel wasn't continuing so you want to make sure you have one core partner who you're spending time with but you're also probably meeting other partners in the firm and and senior partners so that like all the decision making channels are correct.

30:38Puneet Agarwal: Again, I don't envy the position you're in. It's hard, but these are just things to think about. It's just the reality of kind of the battle on the field.

30:46Isabelle Johannesen: Oh, I love that. The reality of the battlefield. You know your audience.

30:50Puneet Agarwal: Oh yeah, there you go. That was natural, by the way.

30:55Isabelle Johannesen: Okay. So say a founder now has a term sheet from True Ventures, right? Maybe they have one from a couple other funds as well. How should they go about deciding which investors they want to have? It's a long-term relationship. There's a lot of strings attached to this check. Let's talk through some of those things they should consider.

31:10Puneet Agarwal: Yeah, it is a long-term relationship. It's like a marriage. You cannot get rid of the investor. So I do think you have to think through it in a number of dimensions. One is you've got to make sure that you can have open and honest conversations, that you're not afraid of your investor. You don't want that investor bringing fear into your boardroom. You want them to build, you want them to bring like an open, honest conversation so that, you know, you can have conversations with this board member in good and bad times and you can have very honest conversations. You can be vulnerable. Now that takes some time to build and you're going through a few week process to try to determine that.

31:52Puneet Agarwal: But, you know, that means that you have to spend a lot of face-to-face time and have a lot of conversations and ask how this individual works. I would also do references on any, most people don't ever. You should do references on partners with other founders. Now, some of that is colored because you're probably talking to the founders that they work with and they're not going to say like something overly negative, but you can glean some stuff from that for sure. And the biggest thing that I always say is the easiest thing for an investor is to just sit there when things are going great and cheer.

32:22Puneet Agarwal: That's great. But that's not how the journey is. The journey's up and down. There's lots of issues, lots of problems that occur. So how does the investor act during the tough times? Give me scenarios of the tough moments and exactly what happened and how the firm acted and how the partner acted. And some of that stuff may be very to the point. It could be that we didn't continue to support the company or there was a founder change and the CEO came in. But like those things do happen, but why did they happen? How was the communication leading up to that point? If there's good communication and honesty up to a certain point and you have that kind of relationship with your investor, you can go a long, long way.

33:04Puneet Agarwal: And that's what we obviously pride ourselves on. But those things are things that founders, especially in this environment where it's very transactional, just take the biggest money you can from the biggest name you can. It's stuff you really have to look into and you have to look at the particular partner that you're working with very, very closely.

33:22Isabelle Johannesen: You know, it really does sound like a marriage for many, many reasons. It is. But, you know, something that a marriage does not consist of is the board control, the valuation, the liquidation preferences, all of these sort of technical things that come up on a term sheet. What are, you know, some of those things that founders should look at or look out for as the first check in? I mean, is there something that you guys set up that sets the standard and the precedent for the rest of their fundraising journey? Totally.

33:45Puneet Agarwal: We are all about clean term sheets. I don't get why anybody at a seed level would have any weird structure inside of a term sheet. I mean, there should be no weird liquidation preference stuff. You don't need to have any convoluted type board. If you do want that investor on the board, that's fine. But the board can be really simple. you know, the term sheet should be, you know, very basic on all of those levels. And you're right, Isabel. It's like you do not want to add any structure. If you add any piece of structure at any point in a term sheet, that sets a precedent for any structure farther on down the road.

34:20Puneet Agarwal: So most of the investments that we're involved with, the term sheet's like the easiest part. You know, at the beginning, we're talking, we're chatting, and it's like, oh, yeah, I'll get you a term sheet. It'll take me like 10 minutes to put a term sheet together. And here it is. It's very simple it's very basic all the terms are clean there's there's nothing weird at all about it we can always get into very specific terms but that may be too much for the group here but there but you know you look at liquidation you look at the board control you look at other things but for the most part you know we kind of have an ownership that we want but we want the founders owning the majority of the company and you know we we have a mentality that we work for the founder that the founder is our customer at the same time yes we do have some controls and protective provisions for us but nothing that's out of whack or unusual in any way and then that what we found is for most of the investments we've bought and we've been involved in ipos and big public companies like those terms have typically stayed all the way we haven't had a lot of instances where you know it's weird kind of bio type structure and in venture it should be very clean and again that comes back to having a very good partner in the beginning if you see some of those signs too much analysis process It's too much negotiation on terms and stuff like that.

35:30Puneet Agarwal: That should be some yellow flags as if this is the right partner.

35:34Isabelle Johannesen: Yeah, definitely something for our early stage founders to keep in mind. But I also want to touch on the fact that, you know, venture capital isn't necessarily for every founder. There are some founders that, you know, might, I guess I want to talk more about the strings that are attached to this, because I think some founders are raising for the very first time and don't, you know, maybe aren't considering necessarily all of the strings that come along with it. you guys are, you know, consider your founder, your customer, which I think is fantastic, but not all VCs think that way. Many of them do have much more control and want to be involved in the rest of their journey.

36:05Isabelle Johannesen: And founders may not realize that from the very first check. What are some of the sort of, I don't want to say worst case scenarios, but some things that they should keep an eye out for?

36:13Puneet Agarwal: Yeah. I mean, look at, you know, anytime anybody's on your board, there's, there's a certain level of governance that's associated with it. They have to think through what is best for all shareholders, which means, yes, you like the board can fire you in most cases right like that's the worst case scenario so you have to think through like you know is this a partner you can actually work with and and be you know have a lot of faith and trust in i think governance can be also a very good thing because it forces you know without it being overly bearing you know like a burden on somebody you know it forces good controls in terms of thinking about okay what are we doing to think through the business here it forces good questions and discussion that go back and forth related to how fast should we grow, how much capital do we have, all of those various things.

36:56Puneet Agarwal: And so, you know, look, you're entering into an environment, if you do take venture capital, it's a power law type business, meaning, you know, it's a great book, by the way, if anybody's ever read it about venture capital, I would highly recommend it. But venture capitalists are swinging for the fences, they have a set of companies that they've invested, it comes down to a smaller set of names that return the fund multiple times. And so the mentality is that you're trying to build a big company and go for something and make a big dent in the universe, which means you're trying to scale something to something that could be pretty big.

37:27Puneet Agarwal: Now, the mistakes that happen is when you scale way ahead of where you actually are, you know, and then you end up upside down, you may have raised too much money, and therefore your preference stack gets very high. So these are things to understand. If you raise too much money and your preference stack gets too high, that's the money that has to come back first and so and then the common shareholders get their money so if you've raised a billion dollars and you sell for a billion dollars that billion dollars goes back to the goes back to your investors so those are things that you know you've got to understand in terms of fundraising in terms of some of the governance aspects and in terms of the mentality which is that you know you're trying to go for something now if you have an understanding investor they will look at the dynamics of your market and understand okay well look like there's some friction here.

38:10Puneet Agarwal: We can't just spend money for the sake of it. We're running into some roadblocks. Maybe the best thing is for us to sell the company or move in this direction and not necessarily go for the big home run. And so you've got to understand where you're sitting and how the company is progressing such that when it gets down to the common, which is the stock that you all own, you don't end up with nothing. A partner of mine, John Calhan, he wrote a great blog post called The Tragedy of the Commons, when you have too much preference stack in your company that we want common to make a lot of money. That means it's working really well, the common stock.

38:44Isabelle Johannesen: Yeah. I mean, without, you know, diving too much into some of these horror stories, I think that's a great overview of what founders should look out for. And just a side note, if founders are more interested in learning about some of these things that Puneet was alluding to, there's season three of Build Mode is all about fundraising. So please go have a look. We dive into a lot of those things and a lot of those topics and horror stories so you can learn from other founders. But Puneet, before we wrap up, because I know we need some good time for Q &A because I see them ticking in here. I want to end with a question that's very practical, right?

39:13Isabelle Johannesen: So say you're a Startup Battlefield 200 founder this year and you have the spotlight during Disrupt. How would you leverage that momentum sort of before, during and after TechCrunch Disrupt?

39:23Puneet Agarwal: Yeah, no, that's a great question. Well, what an opportunity, first of all, like to be in front of a whole group of founders and a whole group of investors and have the spotlight on you. So look, I think the first thing you recognize is there's a lot of people presenting. So what is going to make someone lean forward and listen to what you're doing? And so whatever's most interesting about your business, like I would say even factually, like any momentum, your team, whatever, I would put that up front, like make sure it's listed up front. So you hit people over the head with it. Even if you have to say it again, I would put it up front so that you get whoever's in the audience leaning in.

39:59Puneet Agarwal: And then I would say, you know, these rooms are incredibly important. These are the things that help you progress and move forward and change the trajectory of your company. So you really have to work the room, you know, meaning meet as many people as you possibly can. Some will lead to dead ends. That's okay. But it's like the whole valley is predicated on these types of rooms, actually, like people getting in rooms and talking and spending time. And that's where the term sheets, that's where the partnerships, that's where product evolutions, that's where things occur in rooms exactly that, you know, you're going to be a part of.

40:32Puneet Agarwal: So before and after before is getting to know the room, seeing what's out there afterwards. Hopefully you've presented, you've made an impression and now you can even curate that down further and take advantage of the opportunity.

40:43Isabelle Johannesen: That's great advice. I could not agree more. I want to ask one more follow up for you. How many times or how long should a founder wait to follow up after meeting an investor? Because I get asked this all the time. Is it annoying to follow up two, three, four times? And if an investors not responding, is that just a no? Do we keep trying? What do you think?

41:00Puneet Agarwal: Yeah, the slow means no thing is a really real thing. I would say, look, the first one, for sure, if you have a good investor, again, on the other side of the table, they should not ghost you. That I think is a pet peeve of mine, but it happens and it's unfortunate. If after a couple of times you're not hearing back, I don't think you chase. I think unless you have some unique information, like if it's an update on like, hey, I got these five customers or something's happened, that gives you an excuse to actually come back to somebody who's not responding. But otherwise, you know, a big part of this, and I know we have to leave time for Q &A, is to find the investor that is buying what you're selling.

41:37Puneet Agarwal: There's lots of investors out there. But if you're banging your head against the wall against an investor who is, A, not interested in what you're doing, or even has a different model and would never fund you, then don't waste your time. It's wasted energy. It's wasted calories, right? Like, go find the people that actually find your stuff interesting. It's an equation of one, like got to find one that like really is excited. And I can tell you, fundraising is hard for everybody, no matter what, what anybody tells you. And it is that same process of like finding people who believe in what you're selling.

42:07Puneet Agarwal: And so you have to be very careful about that piece as well.

42:10Isabelle Johannesen: Absolutely. Gosh, it sounds more and more like dating as we go through this. So I think there's a lot of commonality lessons to be learned. Great. Fantastic. Thank you so much, Puneet. This has been really, really helpful. I mean, for myself, but I'm sure and hopefully for the founders listening. I want to dive into some Q &A because we have so many to get through. All right. So first, we have a question from Angela. She says, when you meet a company at an early stage that has strong scientific validation and strategic partnerships, but early on revenue, what evidence makes you comfortable investing ahead of revenue?

42:43Puneet Agarwal: Yeah, we've done that actually before. We've invested pretty heavily in science and biology in some of those areas. there comes a lot down to the founder and a little bit, I would say, of the plan. The founder obviously has to spike on deep technical scientific understanding and is somebody in this industry that we really feel like we can get behind. So that's sort of an obvious statement, but it's very true. We have to really feel like there's a ton of expertise there. And the second thing, when I say the plan, how many dollars, for example, does it take for you to get to a certain milestone like what do the milestones look like if you come to us for example and you say hey this is biotech hardcore biotech i need 100 million dollars to get to like the first idea if i have a drug like that's just yes we are all about taking risk but that is a risk that our model can't necessarily take because it's like 100 million dollars to get to some kind of proof point but if it's staged which we've done with a lot of companies like invada which is doing incredibly well or base camp research or others where you know they're like okay here's where we're going to start.

43:45Puneet Agarwal: Here's where we're going to get to a certain trial or proof point. Then we're going to raise here and we're going to get some more proof point and we're going to get to this point. Like, show me that you have thought this through on that level. And then it becomes very interesting. You do not have to have revenue. Don't worry about revenue when it's deep science and you're talking about therapeutic drug. You shouldn't. Like, that doesn't make any sense at that point. We're thinking at it from a completely different lens at that point for that kind of sector.

44:11Isabelle Johannesen: Awesome. I think that applies to many companies listening today. So that's great to know. Jumping to Vitaly asks, what signal or maybe even trait in a founder do you think is most predictive of building an exceptional company before the metrics are obvious?

44:23Puneet Agarwal: That's a great question. I would say for us, it truly has been like a deep, deep product sense and view. And, and, you know, what they're doing differently that the market is, is not seeing. And so, and they'll look crazy in the beginning. But if we can see that, like our best companies in history where the founders have stayed throughout and have had an imprint on product all the way through. The product is the long pole in the tent. And if they continue that journey along the way, that's where we have most success. So if we can see that in the beginning, like when you see a John Foley walk in and he's talking about this bike and it's crazy and Peloton, but what he's talking about is not just another bike, he's talking about a whole new experience.

45:08Puneet Agarwal: And you start to believe that. that that's where you've got to shine in the early days. You know, even something as boring as security, I mentioned duo security. I mean, Doug Song and John Oberheide walked in here and they were talking about a new way of doing two factor authentication for the masses, right? That sounds kind of like whatever, but like, it didn't exist. Like, it was only for like this top corner of the pyramid. They had a view of like, how do you democratize this? But you could feel it. And it was different. And it was a different viewpoint. It was different from what we're seeing.

45:36Puneet Agarwal: And so you can take an old construct and completely redefine it, or you can come up with a completely new idea that's never been seen before. But it's kind of one or the other in deep product sense.

45:48Isabelle Johannesen: All right. Iman asks, when do you think is the right time for raising a priced round versus keep raising on a safe or the likes?

45:56Puneet Agarwal: Oh, we like to do price rounds like early, like right out of the gate. And it's more because, honestly, the paperwork is as simple often as a safe because our term sheets are so clean. I don't mind a safe in the early days. I think where you get into trouble is when you layer on two to three or four safes. I can tell you the number of times where a founder has done that and they literally have no idea how much they actually own of the company or what the cap table looks like. Because you have all these layers of safes and eventually it all has to convert. So someone's going to come in with a priced round.

46:32Puneet Agarwal: Hopefully you're doing well and it's a high price. But if it's like a mid price or low price, all of that money converts and you stare at this cap table and you're like, where did this come from? What do I even own? How did I end up with such a small percentage? And it's because you layer it on safe after safe after safe. And so I think it's better for the relationship to have a price round as early as possible because you just know here's where the founder sits. Here's where the investor sits. Let's go forward. everybody's clear on what the cap table mechanics look like. And especially you can do it in a clean way.

47:01Puneet Agarwal: There's really no difference because you're putting caps on safe anyway. That's just sort of putting a price on it. But you don't really see it in the cap table because it's not really calculated that way, if that makes sense.

47:11Isabelle Johannesen: Absolutely makes sense. It's, you know, sort of delayed gratification. Yeah.

47:16Puneet Agarwal: You're delaying, you're kicking the can.

47:18Isabelle Johannesen: Yeah. There's one here from Neff that says, if you see a startup that has multiple markets they could enter and have feedback on interest from the product in those markets, is it better for them to just focus on one?

47:29Puneet Agarwal: I think it depends. I know that doesn't sound like a great answer, but like if you're building a horizontal software solution, like let's just make it up like a CRM type AI CRM, then I do want, you know, we do want to see multiple markets that is actually interesting across different sectors. And so, you know, classic software is going to work, you know, from all these different markets and that's how you're create potentially a big company. On the other side of it, if you're going after a vertical insurance play, then that doesn't make sense. Then you actually need to go deep in that specific market.

48:04Puneet Agarwal: And we're going to want to understand why if you go in one vertical, and I'm talking apps specifically, so maybe it may be different depending on the market that you're talking about, but why can you be big in this one vertical? And why is there enough money in that so that you can build as big of a company as if you were just selling across a huge set of different verticals. So I think it depends on the specific type of company. But in general, most companies are selling across multiple different end markets. So we're trying to see samples of that. Again, we're early, so we don't see any of that.

48:38Puneet Agarwal: We just see a conjecture, an idea, or thinking of where you want to go.

48:41Isabelle Johannesen: Okay. Jumping to Shogar, this is an interesting question. So talking about founders allocating their time, right? Once you have an MVP, an early customer validation, every month that they spend fundraising is a month that they're not necessarily converting that validation into revenue. But waiting for more traction, of course, means raising later. So it's this kind of cycle of how should they divvy up their time between fundraising and actually getting that traction?

49:05Puneet Agarwal: Yeah, you're not going to like this answer, but you got to do both. It's just, it's the reality of the situation. You can't be like, hey, I'm fundraising and therefore I can't be talking to customers and moving the ball forward with customers. I mean, I actually should have mentioned this earlier. One of the more important things we look for in a founder is not only your ability to have that product sense and build, but not that you come from sales, but that you have the capability to sell. Every founder has to sell. They have to sell to employees. They have to sell to buyers. They have to sell eventually may have to sell their company.

49:34Puneet Agarwal: So do they have that presence and ability to sell? And so I think if you want to get to the A round, which is after us, you're going of have to figure out ways to get to whatever industry you're in, maybe different in science, of course, but like what, what actually it's true in every, what kind of validation are you going to get? Like absence of some validation, especially as you get farther and farther along where it's just very numbers driven. Um, you've got to have that. And so you, you can't, you got to get out of the mentality. Like I'm either fundraising or I'm not, it's brutal. I get it.

50:06Puneet Agarwal: It's so hard. Um, but you're going to have to figure out how to balance both.

50:10Isabelle Johannesen: Hard truth to swallow, but yeah, it is what it is. Yeah, it's a reality. We have a question from Eugenia that says, could you please explain how investors distinguish between pre-seed and seed? I often hear that pre-seed means having product and roughly 50K in revenue, while seed means closer to 400K. Sort of what is the distinction there?

50:29Puneet Agarwal: Yeah, that's a great question. We have like literally zero distinction. Like I don't even know if there's really a true demarcation in the market. it. It may be because we've been around for so long that we just think of seed as all of that. You know, it's early for us. Most of the companies we fund don't have revenue. I don't think there's a demarcation between, you know, pre-seed, you got to get to this little revenue. Now, I do see seeds that I do see people who raise a couple seeds along the way. It's because they just don't have enough traction to get to the A. So they raised a seed. They got to some level of traction, which is showing promise.

51:02Puneet Agarwal: And then they sort of extend the round or they maybe do a slightly higher round for a few million bucks. So maybe that's what you're referring to. But there's not like a like a true like demarcation between pre seed and seed. You know, most of us who are early just kind of think of it all as seed.

51:15Isabelle Johannesen: Good to know. Another question here about size of a round. So there's a narrative that round size is a signal that raising under 5 million screens you out of a lot of potentially good funds now. But a lean raise also signals capital efficiency. What do you what's your take on this?

51:29Puneet Agarwal: Yeah, I mean, I for a seed round, I mean, I guess is what you're talking about, like, I think if you raise too much, the so it all comes down to like, you know, what you're going to accomplish with that amount of capital, such that you can raise the next round. So if you raise 10 million bucks out of the gate, then, you know, the bar is higher. So it's sort of like a mini A. Now, the rounds are all changing in the names, because now the round numbers are so I mean, you're seeing 50 to 100 million dollar seeds sometimes. So like putting the extreme stuff aside, side the bigger you raise the higher the hurdle you have to hit and so if you raise 10 million bucks at 50 post well you know your next round should be at least 100 pre so to show progression which means that okay well the next person looking at your deal is going to look at okay they're not going to care that you made a bunch of progress with the 10 million off that first round they're going to look at have you hit the metrics that actually deserve a triple digit valuation of some kind it's just purely in that sense so most of the seed rounds we see these days are somewhere in that kind of two to four million dollar range.

52:29Puneet Agarwal: And I think that's a great place to start. It gives you the creativity, the freedom to try different things, to see if you have something. And then you can build from there. I'm not or we're not personally big fans of just over capitalizing too fast. I think you have to be very careful. All the stuff I talked about with liquidation preferences, the expectations going up, optionality for you all, it all kind of has it gets tested in those situations.

52:54Isabelle Johannesen: Money doesn't grow on trees, people. There are strings attached.

52:57Puneet Agarwal: Yep.

52:58Isabelle Johannesen: We got a question here that you mentioned the power law is a great resource. What other resources would you recommend for a first-time founder trying to really understand early stage VC, particular conferences, communities, events, books, podcasts, whatever it is that you think would be helpful for a first-time founder?

53:13Puneet Agarwal: Yeah, it's a good question. I think that book's a great one. I think a lot of the books that Brad Feld has written, who was the founder of Foundry, a lot of he's written a ton of books on just like how the venture capital world works and the whole process for an early stage founder i think a lot of the content that probably tech stars y combinator they're putting out there is very interesting as well talking to fellow founders that's the other thing i would say is really really valuable there's nothing like actual anecdotes and stories that are out there but you know there's no shortage of resources i mean you You can even go talk to ChatGPT these days, and obviously that's going to go out and poll everything that's out there.

53:53Puneet Agarwal: But that no longer is sort of an excuse not to know what the market actually looks like. But those are some things that I would look at.

54:00Isabelle Johannesen: All right. Well, we had one here about just a clarification. So you were talking about that you guys don't have complicated term sheets. I guess someone's asking what would complicate a term sheet, things that they should, again, keep an eye out for and briefly explain the do's and don'ts.

54:14Puneet Agarwal: Yeah, I mean, there's a few things like a liquidation preference. So meaning like if it's higher than one, meaning that, you know, the investor gets more money out before you get to see anything. That's a big one. You know, if you don't want too big of a board structure, that's another one. You know, a really big option pool, you know, that can actually depress your valuation because, you know, that the math works in such a way that if you have such a huge option pool, that's just cutting into your ownership too early. oftentimes you want the founders and the investors to take that dilution together i think anything that's like conditional where it's like okay you know i'm gonna give you this but i still have like 17 other calls to make before it's it's on paper but it's not done until i make these other calls and i think about it a little bit more that's not really a term sheet to be honest that's um you know the diligence should be done at that point other than that kind of the quick legal stuff you know too much board structure it should be very simple protective provisions is another thing you should look at.

55:15Puneet Agarwal: Those are things that require a majority of the preferred to vote for. And if there's something weird in there, like you need a sign-off on every little thing, those are things to look at. But these are some of the things I'm talking at a pretty high level. There's a lot of good literature out there, though, among the law firms like Gunderson and others that talk about, and even YC and other places, where they talk about what a clean term sheet looks like.

55:37Isabelle Johannesen: Very helpful. So we are out of time. I want to be respectful of people's times. There are a lot of questions in this chat, y 'all. Thank you for putting them there. I tried to get to some that were repeated a few times, but I will ask one last question, Pruneet. Shogar asks, should we consider this our warm intro to you and pitch True Ventures?

55:55Puneet Agarwal: Yeah, send me an email. I'm happy to take a look. Puneet at True Ventures and send me a note and we'll take a look and see if it makes sense for us.

56:03Isabelle Johannesen: That's fantastic. Mark your words. I'm sure you'll get quite a few inbound. But awesome, Puneet. Thank you so much for your time and your insights. This has been very valuable and it's been fun. Great chatting with you.

56:14Puneet Agarwal: Yeah, great chatting. And thank you again for the opportunity.

56:16Isabelle Johannesen: All right. Bye, everyone.

56:17Puneet Agarwal: Bye.

56:19Isabelle Johannesen: Build Mode is a TechCrunch podcast. Each episode is produced and edited by Maggie Nye and hosted by me, Isabel Johanesson. Our art and design is also by Maggie Nye. A big thanks to Morgan Little, who leads our audience development, the Foundry and Cheddar video team and most of all to you, the builders and everyone else in the wider startup community. We'll see you back here next time.