Ellen Chisa | boldstart

0:00Ellen Chisa: Pitch, pitch, pass, iterate it fast. Story beats data when the storyline's vast. Visions the ignition, but the numbers steer the ride. Conviction and precision watch investors collide. Hey, everybody. Welcome to another episode of Fundraising, a podcast where we interview early stage investors to give you, the fundraising founder, all the tips and tricks that you need to know about the fundraising process so that hopefully, kind of like the name suggests, it becomes maybe that much more fun in a process that is absolutely no fun at all. And today I have a very special guest, Ellen from Bold Start Ventures.

0:38We were just talking before this, I think Bold Start has one of the boldest brands in the game. And I have no doubt that I think this episode will be authentic and have some really, really good advice. So thank you, Ellen, for being on. Could we start a little bit with a brief background on yourself? And then on the fun side, what you're investing in, average check size, and maybe some of the stages that you're interested in? Yeah, definitely. I guess going way back, I'm originally an engineer by background I went to a tiny brand new engineering school so one could call that my first startup experience and then did a bunch of different engineering and product things along the way until I became a founder and started a programming language called darklang I was very motivated by the idea that everyone should be able to make software and I thought an easier programming language will do that and it turns out the answer is actually just text and using text to do that the ultimate programming language so bright direction wrong implementation but through my time working darklang Ed and Elliott had invested from Bold Start into the company.

1:38And so I really enjoyed working with both of them. And so after that, when they said, hey, why don't you come hang out for a while? I said, sure, let's do it. Not really knowing what that would mean. And now we're six years in and I'm still here. Really enjoy it. I love that. Before we go into maybe the fund specific things, can you talk a little bit? I always feel like founders that become investors are the best investors to have on a cap table. Whether or not the returns echo that is a whole other story. But I think from founders listening, when you can have a founder or sorry, a VC that was a founder, can you talk a little bit about the empathy that that brings to you and the experience you can have for both worlds?

2:16Yeah, for sure. I feel like anytime a founder is calling me and they are having a bad day, I feel like sometimes they think of it as like, oh, no, I'm going to call and I'm going to give you this bad news. And it's like this much worse that I have to tell you and you're going to be mad. And I'm like, I'm never going to be bad. Like your day is worse than my day in this scenario. Like I've been there and it was very hard when things weren't going well. So I think that like, I think you just have more understanding of what that's actually like. I think it also, one of the things I've brought to it is I feel like so much of the day-to-day startup is just like something happened.

2:44You're resolving it. Like you're reacting to a bunch of different things, even as you're being proactive. And so I think it's easy sitting from an investor seat to be like, why don't we just do this obvious thing right in front of you? But we only see the one thing and you're in fact seeing 400 things at the same time. And it's not so obvious when you have the, all of it, all of the details. Yeah. And you can, from the investor standpoint, sit in that chair and know that there's more behind the scenes and that you're not going to overreact on some news because you know that there were so many things that probably led to that.

3:12Yeah, 100%. I love that. On the bold start side, what are some of the industries that you're investing in, average check size, and then the stages that you're focused on? Yeah, I love this because I feel like average is the most misleading word for us. And founders ask me this all the time. And I'm like, there's not really an average because we do different things at Inception. Not every company needs the exact same number of dollars on day one. And so we purposefully built the fund. It's a$250 million fund seven to be able to give you the right amount of money on day one. If that's like 500K because you're just getting started and you're exploring and it's a friends and family, but you want us there as part of your friends and family, totally fine.

3:46And if it's that first round is going to be$10 million,$15 million, that is also completely fine. And so if I average, it might be like five and it would be completely misleading. So it's a no average check size, very much like maybe it's 500, maybe it's two, maybe it's 10. And then area wise, well, we started saying autonomous enterprise, which I quite like, which kind of more is the categories that founders will often recognize. We do a lot in cybersecurity, kind of a quarter to a third of any given fund tends to fall there. A lot of infrastructure and developer tooling, which was obviously the side I came in from.

4:16We will do applications like Superhuman, the email client. Ed Nelly had worked with Robo at his last company and again on Superhuman. And then recently we've also done a lot more deep tech leaning stuff, which was really, I wanted to bring back in a lot of the things I'd kind of done before my career in software. So we led the insight for generalist AI, for instance, in robotics. We've done some stuff in tech bio. And I'm kind of always looking to see where we can have a right to win there and where we can be good partners. I love that. And then, yeah, I forgot with your technical background, certainly as it involves investing in technical things, that gives you another advantage isn't the right word.

4:51But from a founder's perspective, a unique value add that you get to bring to the table other than just being capital, which is great. Yeah, for me, it's I've always said like everyone, every investor will say it's about the people and it's 100 percent about the people. But for me, even when it's about the people, it's a little bit how the people think about product and how the people think about engineering, which doesn't sound like a technical thing. But I feel like there's something like if you've built enough things, you can kind of recognize how the other person is talking about building something.

5:17And that tends to be where I like to build rapport with people. Love that. So these are the next few questions or questions that we've had founders kind of nominate in or ask that I ask. The first one is, what is your favorite part about the job and being a VC, especially now that you've experienced the founder and the VC side? And then what is your least favorite part about the job and being a VC? Okay. My favorite part, which I think is very, it's kind of silly, but it's very much an ops person thing. I love that it's basically being on call all the time. Like when you're hearing from founders, like there are definitely times you're hearing where someone just wants to catch up and like you're a good sounding board.

5:53But it's often that something either very good or very bad has happened and you're kind of like immediately in a war room scenario. And I think that is very fun. Not a lot of in between. There's not a lot of in between. There's like not a lot of, like there's no bureaucracy. There's no fluff. There's like no waste of time. Like every conversation you're having is good and interesting. And I think there are very few jobs where that's the case. Being a founder is probably also one of them. And so I think I really appreciate that. I think the, I'll give you two different least favorite things. I think one of the best things about building a founder is you're recruiting a bunch of people to your mission and you're all collaborating on the same piece of work and you're building it together.

6:25And in a fund, you're all collaborating together and you're all supporting founders together. But there's a difference between collaborating together and building the same object together, be it a physical object or a software object or whatever it is. And so I missed that part. Although it's not really a least favorite thing. I think my actual least favorite is how often you end up having to say no to people. And the fact that like you're just saying no over and over again. But for like any given person, they took the time with you to hope that you were going to get a yes. And like they put themselves out there to ask to work with you.

6:52And so like that kind of rejection process is unpleasant. And I probably spend more time on it than I should. Yeah. Do you feel like, though, that you have a, again, going back to the empathy kind of piece of being a founder, you probably heard no a lot as well, maybe from VCs, that maybe helps you in giving that answer, although it doesn't get easier. It helps in that, like, I actually, I try to write, like, the real reason down for why I'm saying no. And, like, the hard part is, like, at the end of the day, all of us are kind of, like, we're black boxes of, like, you're saying no because of the overall picture and you can kind of point to a couple specific things that might be relevant.

7:24But I try to do that as a result. I like that. What are some things that now that you, again, have crossed over on the VC side that you could enlighten founders with in the day in the life of a VC that you think would provide the founder with maybe a sneak behind the curtain, better understanding so that they have maybe more empathy on the VC side? I actually had a really good conversation with the founder and the portfolio about this once. I think when you're a founder and you're in fundraising mode, you're having kind of the same types of conversation about your company over and over again. So like you're comfortable, like you're telling the same story.

7:58It's also you're doing it all the time, even when you're not fundraising. And like you are always anchored in that worldview. For the VC that you are talking to, they like they could be coming from this podcast where they're like kind of thinking more philosophically about this work. They could be coming from talking to the founders having the worst day of their life. They could have been talking to a founder who's having the best day of their life. Like you don't really know what that person is walking into when you're pitching them. And so I think when founders have like the sense of being like, OK, they're both intellectually and emotionally switching into this room, like it's on me to try to do a good job of doing that.

8:28But when the founder like can match that and kind of say like, oh, I shouldn't just like monologue 20 minutes before checking to get understanding or, oh, I know this person knows my space really well. I'm not going to tell them about like why software developers are interesting. Like there's like middle ground. And I think founders can realize that they're walking into a room with a person who could be coming from anywhere and just like make sure they ground the conversation that they want to have early on. Wow. I haven't even as a VC thought of it that way, but you're absolutely right. When you're a founder, you're hyper-focused and you're only like a degree of separation away from the main storyline of what you're building.

9:03But on a VC, you're exactly right. Like any given day, your mood or your idea of the world at that given time could change fairly dramatically from one day to the next. And you don't want leakage, right? Like you don't want to have a conversation that's like completely normal, but something bad happened before. And so then they think you're responding emotionally negatively to what they're doing and it's in fact nothing to do with them. And so I think it's like also on people to acknowledge how they are when they're walking into something and not give bad signals. That's really good advice for founders.

9:30And, you know, not take it personally if it feels like the VC is not interested or that they're having a bad day. I mean, there's empathy across the board here, but I think you're right that VCs certainly have more of this sporadic type of thought where they could be landing at that moment. Yeah, it's almost certainly not about you if they seem upset. Absolutely not. Yeah, for sure. Are there any areas or sectors that you personally are really excited about right now? It could be from a consumer standpoint and something that not you're necessarily investing in, but also from an investment lens, anything that you're personally excited about right now.

10:03Yeah, I mean, so I guess from the investment lens, and this really started over two and a half years ago. Now I started going like, okay, like I'm most interested. I felt like we were just trying to build like software on top of software on top of software where every slice was getting really narrow and it was kind of getting like started feeling a little house of cards to me. Whereas like, OK, like there's less like white space here than there used to be. And I started going like, OK, with this new set of technology we have, there's going to be a lot more chances to actually overlap the physical world.

10:28And so I started thinking much more about that. What I've generally found with Bold Starts since we're always investing at Inception, usually we'll do things and then a couple of years later, everyone will start talking about them. And so then we'll kind of shift on and start thinking about different things again. So I'm still extremely excited about that. So like any of the robotics, any of the tech bio, we obviously have a company together that's in the mining space that I'm also excited about. But I would say what I've started thinking about recently is I feel like even the first generation of AI native companies to some extent feel like we kind of bolted a model in or we bolted an agent in.

11:01It's not like a truly different surface. I feel like AI will look much more visible when we get like truly AI native products. I think Granola is probably the best one for me so far. And so I'm thinking a lot about what consumer surfaces are going to get another round of updates. Like, I think documents will maybe get another round of updates. That would be cool. I'm like a Microsoft Office nerd by background. So that's kind of always one I'm looking at. But yeah, just high quality consumer products. Yep. I like that. That'll be exciting. We're in for a wild ride over the next few years as we kind of settle or at least continue to accelerate, who knows, on the AI front.

11:36Last question before diving into the fundraising process itself. Time for you and or Boldstart to shine a little bit. Why should founders pick you and or Boldstart to be on their cap table? Okay. I honestly think the most obvious one here is like we were talking about our brand earlier. Like we're pretty clear about who we are. And so like you probably either like us or you don't. And if you don't, that's okay. And if you do like us, like that should be a pretty good signal for you that like you were true to like the internet. And like Ed and Elliot and I are all a little bit different. But like you'll get the overall vibe.

12:07Beyond that, I think like the best reference we have is a lot of the founders in the portfolio have chosen to work with us again. Either they found another company, they've referred their early employees to work with us as their investors, like people come back. And then the tactical stuff, like we only do inception. So if you're at the very beginning and you want a partner who understands what that really means and is going to be patient and is not kind of talking about a lot of growth and like premature things before you've even like gotten the first product done, like that's definitely a selling point.

12:32And then I think we are also, we're pretty direct. Like we want people to learn and want people to learn on their own. But like, if we're thinking something, we're going to tell it to you. And then like you as the CEO founder can decide if you want to use that thing or not. But most of the people who we've worked with have said they really, they value that. And so maybe it can be like hard in the moment, but they think it's better in the long run. Yeah, I mentioned the term authenticity earlier, and I feel like that's something that comes through on the Bold Start brand, which is great. And like you said, it may not always be what a founder wants to hear, but they're going to appreciate it, not only at the beginning, but it's a 10-year journey.

13:08They're going to continue to appreciate it more and more as the business maybe gets a little bit harder. is rough on us too. Like we don't like when someone's mad at us for a few months. So like that's part of the job. You say the hard thing and they're like, well, they're going to be mad at me. But hopefully it was the right thing to say. And six months from now, they'll be happy that I said it. Yeah. No, agreed. It's like it's like parenting in a weird way. All right. Let's go into the fundraising process. We break it up into three different parts. The first is about getting in the room. A lot of founders that are listening, they want to know how they can take their pitch, their idea, their baby and present it to a VC that will hopefully give them money.

13:41It's especially true at the inception stage and the very first checks in, which will be great feedback from you. Let's start with what feedback you would give founders at the very, very beginning as they're even just thinking to go out and fundraise. How should they start thinking or characterizing a list of funds or individual investors or where should they start? I know it's kind of a broad question, but where should founders start at that very beginning of the journey when they're like, I want to fundraise? Okay, I have actually advice. I give people here that I think is good. It's what I would do.

14:13I think you should look at companies that you admire in your space that are not directly competitive and go through their cap table and then reach out to those people. Because like chances are those people are for some reason, maybe it's just it was a personal connection, but now they're at least a little bit familiar with your space from that other company that they've worked with. And so I would be kind of looking for any signals that suggest that an investor would be interested in you. Because especially if you're cold emailing them, there's going to have to be some reason they actually answer.

14:36And so that's the kind of starting place. I guess you could also do kind of the cold internet research on the same topic, but I found it's like more efficient to just go through other people's lists of investors. And is there, I guess, like any rule of thumb on how interesting or are you looking at size, stage? Is it more just, yeah. So, yes. So I think stage is very, I think it's very important. Everyone will feel differently about it, but you want to be targeting people who actually do what you do. Like if you're trying to raise an exception, then you email Goldman Sachs. I don't think that's really going to be very helpful.

15:05No, same way. If you're trying to IPO your company, you probably don't want to email me. I think it would be very helpful. And so like, I think making sure the person actually invests in the kind of company you were building is very relevant. Yeah. Yeah. And I think that's probably more stage sector. I feel bad. I definitely feel like sometimes when people invest in the sectors that can be harder because people don't necessarily focus on them, they end up going broader because they're like, no one does this. I'll just email everyone. But I think you're often better off having a more curated list of people to talk to.

15:34Yeah. What I mean kind of, too, is that I feel like there's a lot of VCs out there, and you probably get this all the time from founders, where they say that they invest at inception or the earliest stage. They label it on their website even. But when it comes down to it, they end up being like, oh, well, we'll follow along. And maybe when you get some traction or, you know, you get to five million ARR or whatever it might be, then they're now early stage investors. This is my favorite thing about being only inception is like sometimes I'm really bummed because I need someone great and they already raised a pre-seed or they already raised a seed.

16:04And I can't work with them unless I wait for them to come around and have another company in 10 years. But on the other hand, it is so nice to be able to say no and not like send me updates continuously for the next five years, even though it's unlikely that like I will get there in the future. It is nice to have that clarity. I do think, I mean, and everyone's kind of going to have their own way. And I think it's fair for founders to push on this. So like for us, it's Inception, but some people who are Inception say it's like only about the person. We usually expect, we don't expect you to build anything, but we want you to be able to say like, this is what I'm doing first.

16:37And like, this is my hypothesis and this is the unique space. And also be able to say, this is why it's a large market. And it's actually quite a lot of thinking work or like background work or like pre-work before you might even start. Like you might not even have started a company, but you've spent 10 years kind of thinking about your space and you know the shape of what you want to do now. which is very different than just like we back people even though you can do both of those things at inception yep yep i like that is there a right or wrong way that you see founders getting in front of you or getting in front of other vcs kind of at this early stage i think especially in the last six months i have started getting an onslaught of cold email that feels a hundred percent programmatically like programmatically generated like no one has any idea why they've sent these emails.

17:23They don't even know they've sent them. You're like still on their cadence even if you reply and say no. And that volume is so high now that if I open an email and it immediately reads, like I can tell a model wrote it in the first three sentences, I don't answer the email because I feel like the email wasn't like particularly, like I'm a real person reading the email. If you want me a real person to read your email, send me an email that you actually wrote. It's totally fine to have AI augment things or help or like train something to use your voice. But like if it like clearly reads like, well, this person just said, please script an email to VCs and blast email it to everyone, like, I'm not going to answer.

17:54So I'd say that's the wrong way right now. The right way, I think, is just, like, being thoughtful about it. Like, I've definitely had people reach out who are like, oh, like, and I'm not saying everyone should go look up Dark to email me things about Dark, but, like, for people who genuinely, like, followed along with Dark, they're like, oh, I remembered, like, when you launched this thing and I watched this video. And I'm like, oh, like, there's, like, a little personal rapport that can build into it. Or like, oh, when you did this work, like, I always have a strategic question about this. And so then I know even if this isn't an investment I can make, we like at least are going to have a good conversation.

18:24Hopefully, like, we'll get some value for the company out of it. Yeah, it's just like if it's like if it's clear you're emailing me for a reason and there might be a fit here, like I'm going to answer. Yeah, yeah. We've heard this all the time where the inbound now is kind of overwhelming. But I think it's still pretty hard to even surface or come above that noise. Even if you were to write something that feels authentic, it's like this is why we can't have nice things. like the hundreds of other emails kind of ruined it for you, even though you are doing the work and putting it together. You're better.

18:52Your odds are still better. But I think that it still hurts across the board on the cold outreach. Not that you shouldn't do it. In my last companies, I fundraised off of cold emails. But it is it is harder, I think, today. What are your thoughts on either warm introductions in real life meetings or trying to put yourself in positions where you don't have to do cold? Any feedback, suggestions, recommendations on that side? Yeah, I think there's a good blog post. And I remember who wrote it of like the hierarchy of warm introductions. But like, certainly if you know a founder that I work with and they're going to say you're the greatest person ever, like I'm going to meet you.

19:26Like, definitely a thing. More like someone else I've worked with before who I really liked working with. A lot of the time when at least I say no to a meeting, even after a real email, it's often that I like I know that we're not going to invest in the space or like I've already spent a bunch of time thinking about it. And I'm just like, no, like, I don't want to give you the false hope of getting on the phone for half an hour while I sit there being like, yep, still not going to do it. Still not going to do it. Yeah. And so from that standpoint, it's kind of like, I don't know if a better email makes it better as long as like the email actually makes a set of eyes or like you get it through a warm intro or you run into me in person.

20:00Like, I don't think it really changes the end outcome most of the time. Yeah. Are there any things that they can be put in that email? One, being authentic and feeling real is great. But are you looking for a clear statement of the problem, a clear statement of why the founding team? Like, what are you hoping to get from that email specifically before you would jump into a pitch deck? Yeah, I should know what you're doing. The thing I like least is when someone sends me an email that is two sentences and it's too vague to know what they're actually doing. And then I have to reply to say, but what are you doing?

20:30Because I'm like, well, you just made an extra loop for both of us. Especially if they don't send a pitch deck, which I get more now. I feel like, let me know if you want a pitch deck. And I'm not replying to that email. Right. Yeah. So I feel like I just want to be like, like, I want to have a good sense of like, oh, like, what are the like the three sentences of this that like make me understand what you were building and why? Yep, I like that. And in the pitch deck itself, if you do feel compelled and you open it, are there any slides that you think founders should be spending more time on ones that you end up being attracted to that help you get over the edge?

21:00I definitely don't spend much time on TAM. Like, I feel like either it should be obvious to me that your market is huge or it's probably not. So like, I don't like the math there. So like I mentioned before, like I tend to like get to know people by learning how they think about products. So I'm like usually looking for that through line of like, what are they building and why? I like that. Are there any slides? So the TAM slide that you mentioned maybe not being there. Team slide, what are your thoughts on team slide? We hear that one as being one that everybody loves and wants to see. In your mind, what makes a good team slide and then what makes a bad team slide?

21:31I think this is like very bespoke to investors. So I don't know if people should change their team slides based on just what I like. Like at the end of the day, I really care about you and your co-founder. If you have a co-founder or multiple co-founders, I like I think people sometimes try to make it seem more credible by adding a bunch of advisors. But I feel like the issue with that is it's very hard to differentiate. Like, is this just someone who talked to you once? Is this someone who has equity inside an agreement? Like, is that agreement? Like, I feel like it raises more questions for me than answers most of the time.

21:55Like, I really just want to know about you. You're the person I'm going to work with for the next 10 to 15 years. Agreed. All right. Let's say that they've impressed you enough to hopefully go into that first meeting. It's kind of the first time that you're going to get a real good understanding of what they're building, the person, all these things. So it's an important meeting. What are you hoping to get out of it as a VC when you're meeting that founder for the first 30 minutes? What is your goal and objective going into that? A large chunk of it is understanding, like, are we the right people for this person?

22:25Because, like, so much of both sides is like me and Ed and Elliot. And we will help, like, all of us will help everyone in the portfolio, regardless of who, like, originally worked on something. And so it's sort of like, do I think we will be helpful to you? is a big part of that. And I think a big part of that is like, do I see the world going the same place you see the world going? So like great experiences or when someone comes in is like, hey, this is what's going to happen. This is what I where I see. This is what we're going to do first. And I'm like, of course, especially if it's something where like I haven't like we're not thesis people.

22:53Like I don't sit down and write a bunch of stuff. But if you come in and you tell me the story and I'm like, oh, yeah, yeah, no, that's definitely going to happen. That completely matches my worldview. Like that's a pretty good indicator that it does make sense because like I'm going to have the intuition that hopefully matches yours. And like, I might still point out different things, but like, we'll at least be rowing the boat in the same direction. I never want to be in a scenario where like, I think the founder should be doing something different with their company than they think they should be doing.

23:15It's their company. So that's a big piece of it. And so for me, it really like, it is, I will spend a lot of time getting into the like, okay, like what, like I'm trying to picture what is the first revolution here? Like, what is the first thing that you can prove that is currently unknown? And if we succeed in doing that, we're really on the right track. And so like, that's an important thing for me to understand in a first meeting as well. Yeah, and how much of that is going back and forth? The reason I ask is we have a lot of founders that are unsure of how much of this is a presentation versus a conversation.

23:43Obviously, it depends on the VC, but - It's 100 % a conversation, but it is a conversation that you are the driver of. Like you need to be like getting us back on track because like I might just wander off and like, you've got to give me some input because if you're just telling me boring thing after boring thing after boring thing, like it's not gonna like, reading slides is not going to get me to make an investment. But like if you give me some context, then I'm like, oh, what about this? Like, yeah, sure. Like, let me go one or two loops on that. But if you're like, oh, no, like we've spent five minutes on this like tangent because Ellen just got curious about it because she is an intellectually curious person.

24:13Be like, hey, like, I'm happy to go into that another time. But I really think we should focus on our main point of this. And just like reel it back in. That's really good advice for founders. Yeah, I would say that to maintain and take control of these meetings as best you can, you should obviously read the room. And if Ellen's getting excited about something, you obviously want to be able to pique those curiosities. But sometimes it is only 30 minutes. And if we don't get through what we need to, sometimes it's hard to schedule the next meeting or things bleed over and all that as well. So, yeah, keep it controlled as best you can.

24:43I think having the slides up helps anchor on something, too. Like, even if we're not like you're presenting over and over again, it's like nice to have like a visual aid and then you can go back and forth. I think it helps founders remember that they are driving. I like that. Yeah. The next question I was going to ask you here is to deck or not to deck. It's how often do you want to come in and just see a deck? Should they lead with it? I agree with you kind of there. Maybe you're saying the same thing. I like to just have the deck up all the time, like bring it up, maybe present the first like couple slides just to visualize some quick points and then maybe go off from a different direction.

25:14But I don't like it when it's brought up later where you talk for a little bit. It feels kind of aimless. And then it's like, oh, now let's hop into the deck. Like, yeah, I like, I think the deck first and then it kind of like you said, it puts it on rails almost a little bit. But then you don't need to just present slide by slide as you go through it. I think it's because otherwise you have that like first aimless conversation and you're like kind of building your head, but then you hit the same things again. And so it's like, I don't know, you're really trying to get the most out of the 30 minutes that you have.

25:41And so you don't want to be doing anything twice. Yeah. Yeah. Another quick question that we have founders ask all the time is whether or not they should bring their entire founding team onto that first call. Do you have any thoughts or opinion on that? I would generally say no. I think it's like, it just adds to a group dynamic, right? Because then you suddenly have like three lines of communication and then you kind of have the like, how do we hand off between each other? I mean, with Boltzart, we only work with technical founders. And so like, I could see it being a different scenario at first, I don't know, like if it was a consumer company and someone was like very growthy, but no one believed they could build something and then the technical person came to like talk about building things.

26:14Like I could see scenarios where maybe it would make sense, but I would say most of the time I don't find it improves meetings. I think it is appropriate, certainly, like later in the process. Like if you're getting there and you're like really close to like a term sheet stage, like, of course, like we want to meet the people you're working with. It just doesn't have to be first 30 minutes. Yeah, agreed. Are there any questions that you think founders, I mean, going back to taking control and ownership of this meeting, are there any questions that founders should put on themselves to ask the VCs during this meeting, even if it's at the end?

26:45I actually, it's funny. Smart people sometimes do this. They will ask what you think after the conversation and be like, oh, like, what do you think? And like as someone who does a lot of processing offline, I'm kind of like, oh, like you're really putting me on the spot here. But it's also true that I often do like have a gut sense of where I'm at after the first thing or what I would do next. And so I don't mind being pushed on that. And I think it probably does give the people who ask me a better read of what's going on. recently i've had some founders that lead with questions right out of the gate where they ask something like that to almost get it started where it's a what was exciting enough for you to take this meeting like leading with that and then having the vc i've seen it backfire with some founders where sometimes vcs will take it to where they feel off guard and then they don't have a good answer and they almost feel like they're being attacked isn't the right word but all of a sudden they're now kind of like this isn't how i expected this meeting to go and it throws everything off But other times VCs can answer those questions and it becomes an excitement.

27:42Like, well, we're really excited about the fact that you're thinking about this because we have a portfolio company that did this. And we know these customers that like this. Because then as a founder, you can kind of drive the conversation in these ways that feel it. So I've seen it work kind of in all ways, but it's a dance and it's not guaranteed at all times. Yeah, I think that it also goes back to like where the person was like, that's definitely going to work. If it's someone who's been like chasing you for a long time and they're really excited about the company, it's not going to work as well.

28:06if it's a week where someone was kind of like, oh, like, I'm on the fence, but like, I have some time. I love meeting. Like, I guess there's probably like some sort of argument here of like how convicted should you be to take a first meeting at all? You certainly can say, I'm only going to take meetings where I'm going to write a check because if you're only writing two, three, five checks a year, that would be very few meetings. And on the other hand, you can't take every meeting. And so like, there's always going to be some middle zone where like, you might be like, I've definitely taken meetings where I didn't think I would get there and then I did.

28:35Yeah. And you're always surprised by those things, too, especially if they were introduced to somebody that you trust in value, even if the entry you're like, I don't like this. But you trust the person that made the introduction and then you end up liking it. Exactly. Yeah. Are there any mistakes that you see founders make during these first calls? I mean, not just the opposite of what you were saying, or maybe they don't do a good job of convincing you of the problem or articulating or storytelling. Any other tactical things maybe that founders do on these calls that are a complete mistake? Like, I mean, you called it out, but like insisting on staying fully on script is definitely a tactical error.

29:08I think assuming that the investor knows either too much or too little, there's like a right place to be. The other one is definitely like trying to turn it around where, like I said before, like I try to be we try to save people time. And so if we know where I know, we try to say it right away, like to the point where if I realize I'm a no 20 minutes into a meeting, I'm going to tell the founder that. And then they can have 10 minutes of free time with a venture capitalist to get any input they want, kind of like our podcast, but like live. And sometimes when I do that, which really like I do do it because I respect people and their time and their effort, people will like try to turn it around and start arguing live.

29:39And I'm kind of like, I like arguing with me. It doesn't change the like the overall meta that I have. I have had founders on calls that get argumentative when we're like, oh, but what about this? And you ask a question that you think you're just being curious about, but it strikes a weird nerve. And then all of a sudden they get very vocal and like you could tell that there's like a switch that goes off. Yeah, sometimes that's that's not a good sign. I was on this once from the other side as a founder, not like, yeah, where you feel like you want to be like, you're wrong. And there's, you know, obviously VCs are wrong more often times.

30:10I always tell founders to be, you know, give a little grace on those, but it can be hard. All right. Going into the final process of the fundraising. This is it's such a weird like blob because usually you're lining up all these intro meetings. The rest of the fundraising process is herding cats. You're building momentum and a little bit of FOMO and you're trying to build out your cat table. It's definitely the meat of the process. Could you talk maybe a little bit about starting with on how Bold Start handles it? What is the diligence process look like or the process between Ellen just had a first meeting to you're writing a check or sending things over on a close?

30:45Yeah, I think there's two important things we do there. One is we tend to make introductions to potential customers. Like we want to understand, like we usually think this is a large market, but we want to hear that like the way you're thinking about solving it is going to be interesting to something, someone on a like reasonable timeline. which means actually I spend a lot of time in that initial call trying to like get very clear on like who would I send this to to be able to have them be like yes I want to angel invest yes I want to be the first customer yes I want to be a design partner like I'm looking for those signals from people we know and trust and so that's a big piece of it we often will try to do them two founders in the portfolio if they're founders in the portfolio who fit the bill because then you kind of reverse diligence at the same time we're trying to be efficient and then the other one is just because like we like we're very unsiloed as a set of people and we are all distributed so like We're not in person in an office together all the time, which means it's like very like push, pull.

31:30Who can help with this? Who can help with that? We do like for people to meet all three of us. But like it's not I don't know. It's not like I don't want to say it's a partner meeting because it's not like the thing where like you walk in with the laptop and you do presentation and there's 20 people staring at you. And it's a whole thing. It's like very much like it's kind of the same thing again, but with three of us and with like some more nuance in the questions. But again, it's probably more like real conversations because I've been on those two as a founder where you go in and there's like seven partners and you haven't met most of them.

31:56So it's just and you're kind of in this weird position where especially if some of them start asking questions and you're like, oh, do I have to spend five minutes explaining something that I've already explained to like the other partner like two weeks ago? So there's definitely value. Smaller team, but also I think I could say the Bulls are more down to earth in real conversation, which is nice. That's yeah, that's what I think is because like we all want to be having a conversation we're interested in having to. None of us. Yes. I don't know. We aren't going to have time for that.

32:26It's kind of a hard piece where when founders are in here, sometimes they have to make decisions on who to keep on the cap table, who to keep off. Sometimes it's picking the lead. Maybe you have a little bit of allocation left and you're trying to pick it. Maybe it's even just the beginning and you find a VC that feels like when your gut is telling you is a red flag and you don't like it, but they're offering you money. And so you kind of feel there. any just advice you would give founders that are picking a VC, if they're lucky enough to be on their cap table, what they should be looking for, what characteristics, what things are green flags, red flags?

32:58Because again, a lot of these founders have never done this before. And it's such a new process. Yeah, I would definitely. This might be a little flubby, like I would definitely think about like, why do you want this person? Like, what role are they going to play for you in this company? Like beyond just capital, obviously. And then I would like kind of ask yourself the things that indicate if you would work well with them or not? Like, would you feel comfortable giving them feedback? Like, if you thought they weren't being very helpful as a board member, would you be like, would you talk to them about that?

33:22Do you think they would adjust if you did that? Do you feel comfortable with them advocating for you? Like, this person is also going to be running around in the universe talking about your company. Do you think they understand your company well enough to do that? Like, do you think they'll say the right things to people? Do you think they'll talk to the right people? Like, how do you feel about the idea of them bitching your company? And like, even more high level than that, just like, how do you feel after talking to them? Because like, there's some smart people that you talk to them and you walk away being like, this was great.

33:44I learned so much stuff. It was really fun. And there's some sort of people where like I walk away from talking to them and I'm like, I feel dumb. I don't think I'm, hmm, that wasn't good. And so you want to like always walk away from this, hopefully, like with that person making you feel better. Yeah. It's oddly vibes based. It's like there's a lot of vibes that go into it in a weird way, but I'm a kind of a vibes person, but I still feel like there's vibes in that you just kind of feel and you're exactly right. You have to feel good talking with them, meeting with them, texting them when things are going wrong, asking for feedback, giving them feedback.

34:17Those are all things that you kind of feel and I think in your gut a little bit. Yeah. Would you want to hire this person and have them like, obviously, I'm going to be your office every day. But like if you were thinking about it from that perspective, is it like the same choice? Yeah, that's that's really good advice. Are there any mistakes that you see founders make kind of in this process? Because, again, it may be even said differently if you want to slide it in there for building momentum, building some of that FOMO. Any advice on how founders can do that, but then also where you see the biggest mistakes in trying to do that during this part of the process?

34:47Yeah, the part, the one that comes up, it's not super often, but occasionally that I always feel bad about, is founders sometimes misread early customer signals where like I'll make an introduction. And like generally if I'm introducing someone, like they're going to be nice to you. Like they're not going to be cruel, but like there's a big difference between like, oh, that's an interesting idea. And can I buy that? like there's a huge range there and so i think founders sometimes will read like a pleasant conversation as being like that was great diligence and they should definitely do it because this customer said it was a cool idea which is like it's not going to get there and so i think that can kind of create a rough point when you don't actually get there even after making those conversations i think the other one is just like the fomo art is hard right you can't push people too hard because like people will like like i think a thing that can go wrong is like i might like someone and then I'll be like they'll be like oh well we're deciding on Friday and I'm like oh like I can move by Friday like when I really want to but like when I look at like the calculation here and the type of diligence I want to do it maybe it's a new network or whatever it is like I'm not going to do it by Friday and then they're like wait wait wait never mind you can have longer and I'm like oh so it wasn't really Friday and like that kind of definitely I think that's an unforced error yeah it's the hey we're closing on Friday and then I get an email next week or two weeks where it's like we have more allocation all of a sudden or we've extended the timeline and to think through more.

36:07And it's tough to lose that. And sometimes it's true. And to your point earlier about customers giving mixed signals, I think VCs are even worse at giving mixed signals. So founders can sometimes take an excited VC meeting because VCs always want to feel excited about what you're doing as super strong signal. And then they're going to be like, Ellen, this VC, they loved it. They're definitely writing a term sheet. And then you could text that VC and they're like, oh no, we're passing tomorrow. And it's like they met one junior investor started a giant, like, yeah, it's like a whole thing. Yeah.

36:39That's definitely also a mistake that happens. Yes. It is tough. It is really tough. I imagine. It's like the job for investors, like they want you to like them. Like it is kind of salesy. Like we're all selling a commodity product. And so like the investors want you to like them. And I think the hard part too is a lot of these investors, if there are multi-stage, they also don't want to burn the bridge. Maybe they can't get there now, but they maybe write a check at seed or series A. And that's the problem, I think, with multi-stage is it's really tough to get funding from them, but also to get really honest answers from them because they want to keep their cards open for the whole lifetime of your journey, which can be difficult if you get really good feedback.

37:18All right, let's go into the last bit, which is after the fundraise. It feels really exciting. You celebrate for five seconds, but there's this weird shift that happens, I feel like, where founders go from fundraising mode to back to building mode. Any feedback that you would give founders that just closed around and how they can kind of snap back into building mode? What should they focus on for the first week after, three months after? Because it is a transition, I feel like. Yeah, especially depending on how long the round takes. I would definitely say one I see, which I love, is many of the teams we work at Inception, they have everyone lined up to go.

37:53And so it's basically like I wire the money and they hire six people that week. And then it's like everybody's starting together, which I love. And I definitely the people who I've seen do that, who kind of like have that forethought to play in the slate of people and they know the slate of people they want to have. Those companies really do execute. It tends to go very well. So I kind of like that. the other part of it is like I think it's really easy once you raise venture capital and get distracted and like the game of like I have a startup and I'm being a founder and it's like playing a character on TV basically like a little bit like I'm doing the thing and I'm like I don't actually care if you do anything other than build a thing that really matters that people want and like if you don't go to all the parties like you know what you're going to be just fine it'll be fine if you build a thing that people want and it's growing very quickly and everyone is excited about it people are going to give you money they're not going to go why weren't you at the whatever whatever meet up on Tuesday of whatever year?

38:47Like no one cares. And so I think it's like very tempting to like try to think about too many things and trying to get them right. And I'm kind of like everything else can be kind of bad as long as you do like the one thing that matters. Yeah. The other thing, too, that I always see happen is that as soon as you close around and it's made public, that's actually when VCs actually come out of the woodwork. And now all of a sudden they're like, is your round still open? Could I slip in a check? And as a founder after, you know, especially if it was a long, grueling process to feel wanted for a little bit can be a huge distraction because now you're starting to think, oh, should I open up more money?

39:18Should I do that? You open the door a little bit, though, and then you're kind of back in the fundraising process. But it is funny where the thing that you just spent months doing, it was really hard, for some reason starts to feel easy right away after. And I'm convinced that it's the universe just like trying to trick you into pure failure. Oh, I don't know if it's trying to trick you into failure. I actually think that's the thing about fundraising that's so funny. And when it is actually fundraising, when I was a founder, while I was fundraising, I was like, this is the worst thing ever. I hate fundraising.

39:45I never want to do this ever again. And then we would close around. And the next week, I would just be at home and I would be like, fundraising is great. And my husband would be like, this isn't true. Like, you don't like it. What is going on? So it's like a very special type of like, oh, I just finished. Now I feel great. Therefore, it must have been great, even though it's not. But that's what I mean is that I think you're right. But if you have other VCs that try to pull you back into it, you forget very easily where it's just like all of a sudden you're like, oh, wait, yeah, I can go back and fundraise another million or something, but then it distracts you another three months and it's never as long or short as it takes.

40:20And yeah, it can be stressful. I think you definitely shouldn't. I feel like the way I would scope it is like, if someone emails you that you do genuinely want to work with on the next one, I would cap it at no more than three to five conversations. And you can do three to five conversations in the first three months after you fundraise and then not anymore until you're finishing. Yeah. Any advice you give founders on the relationship and, you know, investor updates or how you think or founders should think about the ongoing communication relationship with VCs, especially at the very early stage?

40:51I feel like it's that time is funny in startups where there'll be times where you don't really need to talk to your investors that much because you're just kind of heads down executing on something. And then there will be times where your investors are high leverage and you want to spend more time. And I think that's OK. And so I would definitely think of it as you don't want your investors to feel uncertain like where did the money go what are they doing what is happening like you need to have like enough of a relationship that people have a sense of what's going on I don't have a strong opinion on what format that takes I think like if you have chosen to do a round where you have a lot of angels and a lot of people you want to keep in the loop on like more public facing things like I think those should definitely be email updates but for like a lead investor that you're collaborating with all the time I don't necessarily need an email if we're texting every day because like I'll kind of like have the state of the company in my head as well and so I would definitely think even more is like, okay, if I could pick one thing a founder should do after this, it's they, you should have an idea of what is actually feasible and useful for an investor to do for you and make sure they have that thing in their head.

41:46And that can be like starting to talk about your market space with other later stage investors without even mentioning your company exists, but just like queuing up like, hey, this space is kind of starting to go if it's inception. It can be like, oh, I'm specifically looking for customers at this profile. If you run into someone with this job title or like I saw you're going to this event, can you like make this connection to this person for me but like have like tactical things that people can actually help you with and that'll probably be more useful than being like we're building things customers like just be really specific and you're right that it's something that you can kind of just let the vcs almost marinate a little bit so they can kind of think about it over it's not something like i need your help hiring this person now like go off and find me a head of sales and then it's like oh okay well okay but if it's just ongoing yeah help me find you know yeah you could be like oh like maybe and maybe it's like six months earlier where it's like oh like after this next milestone i think that's where i'm going to bring in a great head of sales if you start running across people that you think are great that i should know to start like building my understanding what great looks like in this role like then you've just given me something where every conversation i walk into with a great head of sales like i'll kind of have you in the back of my head agreed what are the biggest reasons you see a lot of companies especially at the very earliest stages my guess is you see a lot of companies that don't even make it past to the next round or they they fizzle out early.

43:00What are the biggest reasons why you see that so that founders can, again, try to embed themselves in some of these common reasons why they may not make it even just to the next round? I mean, like, I think very unsatisfying for founders, but like sometimes the market hypothesis is just wrong. And like that is the nature of venture capital where you're like, that thing happens a lot more than people think. It's just like out of your control. Yeah. People are like, oh, well, like I had this disagreement or like we didn't build this feature in time. And I'm like, I don't know. Like it just wasn't there.

43:27And like, I think a lot of times the answer is like it just wasn't there. Yeah, timing. You just didn't as cliche as it is like the YC advice of you just didn't build something people want that ties into market. It ties into execution. It's all these different pieces. But yeah, sometimes you're right. It's a boring answer. Or I guess the other one is kind of what I was saying before, where it's like founders get distracted on all the things that don't matter. It's like another one hiring too quickly. Yeah. Hiring, playing startup, managing all these people you've hired. Like you shouldn't Like the first six, if you have to manage the first five people in an early stage startup team, something is wrong.

44:02All right. Last bit. Any advice, you know, speech that you would give founders that are in the middle of the fundraising process right now? They're just getting started or in the thick of it. Any any final words that you'd like to say to them? It'll be fun after you're done. That's so true. Hopefully. But then the work kind of does begin. It was fun. But yeah, it is fun. You're right. You're right. Ellen, thank you so much. Where can folks continue to follow you, continue to follow along with Bold Start and follow both journeys there? Yeah, Bold Start. We're boldstart.bc. I think we're at Bold Start.bc everywhere.

44:35I am Ellen Chiza pretty much everywhere on the Internet. I'm very easy to find. You can also email me at ellen at boldstart.bc. I love it. This was awesome. Thank you. Thank you very much. You lived up to the expectation I had of having very honest feedback. Definitely no textbook feedback here, which was great. So thank you for being on. Anytime. Thanks for having me.