Michael Gibson | 1517

0:00Pitch, pitch, pass, iterated fast. Story beats data when the storyline's vast. Visions, the ignition, but the numbers steer the ride. Conviction and precision watch investors collide.

0:09Michael Gibson: Hey, everybody. Welcome to another episode of Fundraising, a podcast where we interview early stage investors and ask them all the questions that you as a fundraising founder want to know about the fundraising process. And today I have a very special guest, Michael Gibson, the general partner and co-founder of 1517. And we're excited to dive into the thesis and what you are doing very uniquely at the early stage on the investing side. Part of that coming from, as you were one of the co-founders of the Thiel Fellowship with Peter Thiel back in, that must have been over a decade ago, 2010. Yeah, 2010.

0:46Michael Gibson: 2010. Yeah. It's amazing that that program has been on that long. Incredible. Incredible. Incredible. But like I said, I don't like to ramble too much about it. I'd love to pitch it over to you. Could you give a brief overview of what you are building at 1517, the types of companies you're looking for, your strategy, check size, anything like that? Okay, well, yeah, it starts coming out of the Teal Fellowship. Ran that program for nearly five years with co-founder of my current fund. We saw amazing things come out of the fellowship for those who need their memory jogged. There were two conditions for the Teal Fellowship.

1:21You had to be 19 and under to apply, and you had to drop out of college if you were enrolled in order to receive the grant. So we worked with 20 people a year. And now in retrospect, it's pretty wild what came out of those years. We ran the program. We helped launch Ethereum in 2014, Figma 2012. Chris Ola, one of our 2012 fellows, not during his fellowship, but afterwards became a co-founder of Anthropic. So Danielle and I, Danielle Streckman, my co-founder, we worked on the Teal Fellowship. So we thought, geez, we could be making investments. We have a thesis here. We have developed a sort of sense of what the play looks like on campus and among younger people.

2:03That turns into startups. That turns into really big things. And so we started our fund 1517. were named after the year of the Protestant Reformation because we think the modern university is the equivalent of the church of the 16th century that was selling these pieces of paper called an indulgence. You can save your soul from hell by buying an indulgence. And so likewise, we think the diploma is the modern indulgence. It's Yale or fail. You go to hell if you don't have a BA. We think that's BS. And so, yeah, we launched our fund to back people without credentials. I will just add, we do from time to time, because the whole point is to accelerate progress.

2:43We think there's been stagnation outside of computers and IT. And so, you know, one of the bottlenecks in stagnation, I think, is getting people to the frontier as fast as possible. And so from time to time, though, we will break our thesis. We will invest in some mad scientists, but it's got to be like sci-fi way out there. But, you know, something like 90 % of our investments

3:05Michael Gibson: are in, you know, at least one founder doesn't have a degree. We are a pre-seed fund, Angel Pre-Seed, so happy to be the first money in. Sometimes we'll do a$100K check if, you know, someone has, you know, some short-term milestones they think they can hit, an experiment they need to run. That'll prove a concept out. But the main event for us is about a million-dollar check, you know, just a solid pre-seed round. By that point, there's usually a team. There's usually, you know, some kind of work if it's like in enterprise SaaS or something like that. You know, maybe some initial pilot customers or users, if it's more on the R &D heavy deep tech, at least some kind of rational plan for hitting tech milestones that we can get on board with.

3:47But yeah, as I mentioned, we love being the first money in and helping people get started. I think that's where we're the best at what we do.

3:54Michael Gibson: I love that. I love, love that thesis. I've also been kind of an advocate of maybe a disadvocate of folks attending university if they truly do want to build stuff like this. But I'm curious, over the last decade or even since 2010, have you noticed any changes from the university side in maybe they're getting better at supporting some of these founders? Have they gotten worse? Is it just kind of the same? And then maybe a second part to that is as it seems as though on the venture side, so many of the dollars are shifting into hardware, be it deep tech, certainly robotics, AI kind of being a category of that.

4:33Michael Gibson: If it's not just pure SaaS, we talked about atom computing kind of before this as well, which falls roughly into that quantum AI side. Are colleges getting better or worse? How much better is that problem right now? Yeah, in some ways they've gotten better, in some ways they've gotten worse. When we started the fellowship in 2010, God, it was a heresy that we said, you know, you might not want to go to school. We were lampooned. We were criticized. Now I would say it's pretty mainstream. So, you know, I guess we were part of that, you know, giving legitimacy to that path. And more and more people have taken it.

5:06I think colleges also, I mean, they were starting their own programs. But I think over the 2010s, they really kicked in the high gear, devoting more resources at business schools or undergraduate studies to create, you know, entrepreneurship centers, clubs and so on. I think all that stuff can be helpful. You know, most of the time, though, if it's run by administrators, it tends to be pretty lame. I find the best programs on campus are really the student run organizations. They just have more soul in the game, sometimes skin, you know, and there are more of them, I think. So it's some blend of the schools doing more.

5:41And then also the students themselves just using the resources they can at the school, which is great. Where the schools have not done well are just the basics where it's like, OK, tuition is up. People are spending more money than ever. So each year it gets more expensive if, you know, there's an opportunity cost to staying in school as opposed to moving on an idea. So that in somewhat in a bad sense is worse. You know, so I don't know, you know, schools. Oh, the other piece I find, especially with engineers and people who build, is they arrive on campus with pretty hardcore skills. And then, you know, these universities will make them take classes.

6:16They don't let you test out of things. It's like you got to pay to take. If you're a CS major at MIT, you have to take certain required courses, no matter how gifted or skilled you are. So that I find, you know, a lot of younger people have expressed frustration to me about that. And then the other thing is just like the development of AI, for instance, is like the cutting edge stuff is not didn't come out of universities, not really in the last decade, really. And so I think younger people also want to be closer to where the action is and just as in private companies. So, yeah, so it's a mix.

6:48Michael Gibson: We see that oftentimes on the on the defense side and certainly with the primes. historically, you would think of going to NASA or going to work at a Boeing if you were an exceptional engineer that wanted to work on the most cutting edge pieces of technology. Labs in certain universities were that way as well. But you're right over the last couple of decades, it seems like that's gone more on the private side. So if you are a top 1%, even top 10 % engineer, you're less likely to probably go to some of those companies. Yeah. I mean, there's only one organization capable of creating Starship, you know, and that level of advanced rocketry.

7:27So where are you going to get that education? You can't get it at Purdue, you know, which is one of the best aerospace programs out there. So I think that's certainly the trend we're seeing. You know, part of this is like the pinnacle, I would say, is like Demis Asabas was a, I think he has a PhD in neuroscience, but nevertheless won the Nobel Prize in chemistry for AlphaFold, he and one of his teammates. I think it's unusual that a venture-backed startup won a Nobel Prize, basically, that I think I can't, you know, maybe in bio, maybe a pharma, I'd have to look it up, but it's pretty unusual.

8:03Maybe William Shockley, I guess. Shockley Semiconductors. I don't know. But I think we're going to start to see more of this in the years to come in other areas because of what we're talking about, which is like these private companies now are able to use a few million dollars and, you know, and then scaffold it out series A-B where it's almost good enough to do that basic science research. They have enough resources and they can move fast enough where maybe, you know, and we'll start to see some advances on the frontier of hardcore science. It'll be exciting. We're going to see some AIs that are breaking.

8:36Michael Gibson: Well, that too, yeah. Who wins the Nobel if it's an AI? I mean, I know, right. We're seeing that with math, right? The AIs solving these theorems or proofs. You know, what I see among younger people especially is the autodidacts are accelerating their learning. They come to us ready to talk, some cutting edge. And this isn't in AI or software engineering. This is in chemistry, hardware, fusion, whatever. It's just so clear that they're advancing much quicker than people a decade ago. And it'll continue to accelerate. Before we get into the fundraising process, a few more questions that founders have submitted to get to know you and the fund a little bit more.

9:17Michael Gibson: What were you doing before maybe even the Teal Fellowship? So obviously the Teal Fellowship going into the fund makes sense. What were you doing before that? What got you into this line of work? Man, I always say I have no business being in this business. I love it. Yeah, I thought I was going to be a professor of philosophy. I was working on a doctorate at Oxford studying moral and ancient philosophy. You know, it was a subject matter. You know, deep questions about what is justice and how should we live. very stimulating and exciting to this day to talk about these things. If being a professor was just like talking about free will in a pub at Oxford, I'd probably still be there.

9:56Michael Gibson: But no, I wanted to be a writer always. I thought it'd be a great day job to be a professor in the meantime. I was very, there was mimicry involved. My favorite poet is T.S. Eliot. On the back of the book, you know, in the little author bio that they have under a picture. When I was like 18, I saw Elliot had a PhD in philosophy from Harvard. So, you know, my younger self was like, oh, you know, if Elliot did it, you know, maybe there's, I could follow that path. Not the brightest choice, but that's what I did. So I went into those studies. I dropped out, finally hitting the point where I was like, look, I don't want to be a professor.

10:35And I, you know, it just so happened my girlfriend was in school at Harvard in Boston. And so I moved there from England and got a job at MIT. There was a magazine they put out called Tech Technology Review, Tech Review for short. And, you know, I just got it. I had some experience as a writer at different newspapers, magazines, and got this job as editorial assistant to begin and then writing.

10:58Michael Gibson: And it was just like baptism by fire into science and tech journalism. Did that for a couple of years and learned a lot. So it was like through that where I met Peter Thiel. And, you know, so it's like a lot of luck in these things. Like just, you know, he was teaching a class at Stanford Law School and we got along philosophically. So he asked me, he said, hey, you want to come on and be basically, you know, glorified TA for the course. Meantime, help out on the research team at the hedge fund. And I thought, geez, OK, you know, this is interesting. I'll do it. That's incredible. Yeah. And then the first day of work, I showed up and, you know, the night before Peter had come up with this idea behind the fellowship.

11:36So it's my first day of work, get pulled in. We have to make an announcement, TechCrunch craziness, big carnival. So yeah, like this, like, hey, I'm in grad school, I'm writing for TechReview. And now all of a sudden I'm in the deep into the heart of Silicon Valley. Like that couldn't, I could not have planned that. I mean, the through line through it all though is, I guess I am, you know, philosophically

11:58Michael Gibson: very interested in, you know, ideas about freedom and autonomy and, you know, that can apply to things like the government and the laws, but it can also apply to, you know, the way we live our lives, the pressures we face, the choices people make, and what, you know, the sorts of obstacles that get in their way. And so if I think of the fellowship, it really is a liberation project, you know, to free people up to pursue their passions and their projects instead of, you know, getting, it's not like a coercive government program, but nevertheless, there is this sort of monolithic view about what success looks like in America and that it was like only through the college track.

12:36And so, you know, I do see it as a little bit of culture jamming, you know, liberation project as well.

12:42Michael Gibson: Yeah. And 1517 obviously carries that forward in the exact same way as well, which is great. Next question. What is your favorite part about the job and being a VC and what is your least favorite part about the job? man i mean the most exciting thing is just to we are at the the what the the spark the explosion the the the beginning the heartbeat of cowboy american capitalism you meet people who have ideas a prototype maybe i mean it's literally a garage and then we get to see that company turn into something real a product people use employees hired with health care plans and then eventually, you know, millions, if not billions in sales.

13:25That is so surreal. It is so wild. It's like seeing the Beatles in the bar in Germany and then like, you know, five years later, they're at the top of the charts. So that I just find so thrilling. And to feel that you play, you know, it's not a decisive, but certainly an instrumental central role in helping them achieve that is really fulfilling and inspiring. So that's number one for me. And part of that would be also like, How do we help advance society? How do we move to the next level? And if we have a hand in that, you know, thrilling as well. So then the hardest part is just the amount of work it takes.

14:02You know, we we there's something where I think I saw this in journalism, actually, where, you know, very few reporters left the building. They just like sitting in their chair, taking phone calls, get a quote or two. But like, you know, the hardcore journalists would go out there and do some reporting. And I feel like VC is very similar where you got to get out. You got to meet people. We do a ton of recruiting on campuses or in cities across America. That involves coffee meetings, campus appearances, talks with students. And it just it takes time and you got to hit the road. It's it's now I've met over the years.

14:37I've met some scouts in sports and basketball and baseball. And, you know, it very much is the life of the scout in those games where you got to you hear about a linebacker in West Texas. You got to go out there and see the game. So to me, that can be hard as I get older. You know, traveling all the time gets gets more and more effortful, it feels like. But but then it's worth it because of those highs that we get to see.

15:01Michael Gibson: It's yeah, it's not always easy, especially the earlier you are. The amount of time, you know, it's one in a thousand type of odds that you have to play through to find that. spark, as you mentioned. So it's not all easy. What are some of the areas right now, if there are sectors, problems, or things that get you the most excited? Do you have anything right now that kind of stands out? I'm super excited about, yeah, hardware, robotics, aerial technology, drones of different kinds. I think we're going to see new forms of energy. I'm excited about space, The lunar economy, even orbital economy or defense in space is kind of interesting.

15:42I mean, we're approaching sci-fi territory here. And then we're starting to see advances in bio. Bio is just such a long road. There's so many obstacles, regulatory hurdles or whatever. But we are starting to see solid shots on goal for big diseases like cancer or trying to repair the brain. So if you can read about it in a sci-fi novel, that's the type of thing that gets me going.

16:05Michael Gibson: Yeah, I love it. Last question here before we jump into the fundraising process. Why should founders pick you and or 1517 to be on their cap table? We've accumulated a little bit of wisdom over the years. It's funny. I can't. The joke is like given the track record of the Teal Fellowship. It's like maybe I was a better investor then than I am now. I don't know. You know, I've got to be, it's like, I've read all the books. I've listened to the podcasts. I've worked with a lot of founders, but we did a great job when I knew less. So that's kind of weird. So you got to admit there's just a lot of luck to it.

16:37You know, but what I do think we have picked up some, some know-how in terms of like helping you start a company, but by far, what I wanted to say by far, the most valuable thing we have to add as a fund is just our community of founders and experts we know and other, you know, investors, you know, just over the years, we've just made lots of connections. And so it's a joke is like, we say a lot of our job is we just know a guy. You come to us, you know, you have some issue and we're like, oh, we know a guy. And it turns out, you know, in our network, we do. So, you know, I think we're a very welcoming community because we're so early and we're approachable and, you know, hopefully fun to work with.

17:16I find that as companies grow and mature, they tend to like to come back to us as a sounding board for higher stakes, later stage decisions. As the company grows, a board is going to be formed, different governance structures in place, that and the stakes are much higher. Okay, you're going to come back to your angel pre-seed investors to talk through the board psychology and how you want the next meeting to go. Because one, we know what's, you know, the history of the company, but two, it's like, hey, you worked with us in the past and you trust us. So I think, you know, those relationships are really strong.

17:47I think our companies enjoy that.

17:49Michael Gibson: And then the other thing is we're willing to move fast and early. You know, a lot of investors take a lot of time to make their decisions. And what's worse sometimes is they're opaque about that or slow, you know, the long, slow, maybe. We pride ourselves on moving fast and being clear. You might not get the answer you want, but at least you have one. So working with us is, yeah, hopefully a good experience in terms of speed. Yeah. I always tell founders, remind them, especially if you're very early, one of the most valuable things that a fund like yourselves can offer is conviction and support when no one else is giving it.

18:23Michael Gibson: And it's one of the strongest value adds that I think gets the least amount of credit for early stage funds. You feel like you have to do even more than that. But honestly, the fact that you can support and have conviction in a founder before anybody else does is going to be the most valuable thing that a company... It goes a long way. If we meet someone who is, you know, without a college degree, you know, underground degree, and they're working on a really, you know, hard problem, you know, come to us and we back you. It's a huge source of a spirit lift. It's a boost to the morale for sure. And the fact that we will be open and take the meeting or whatever, I think it goes a long way.

19:05So, you know, the door's always open. We do make investments. I don't want to rule out enterprise SaaS, you know, come to us. But on the other hand, if you know, there are very few early investors, I think, in those really hard ideas. Yep. Absolutely right. All right.

19:21Michael Gibson: Let's jump into the fundraising process. I mentioned earlier, we split it into three parts. The first is getting in the room. A lot of people listening, they've never raised capital before. They've never started a company before. What should they do at the very beginning of this process? Any feedback or advice? And what should they do on the CRM, the index? Should they just create a list of funds that they should reach out to? How should they make that list? What is the very first thing that they should do when they go, I want to raise capital? How do I get in front of the right VCs? Yeah. I guess you got to figure out what you are as a company.

19:51So that, you know, that's like, don't just like look up VCs in general. Top pre-seed funds.

19:56Michael Gibson: Yeah. Yeah. Really try to segment the funds you want to focus on because, you know, if you are a space tech company. There are a lot of space tech funds out there. And it's so funny to me. I mentioned our, you know, Teal Fellowship background, the, you know, we want to back people without credentials. It was so funny. I just had an email exchange last week where this young man, I said, hey, do you have a college degree or a team? And he's like, yeah, I'm getting my degree. And I think it's important. Everyone gets their degree. And my teammates have a degree. I was like, dude, have you seen our website?

20:28Michael Gibson: Yeah. Do some homework. So just do some basic homework on the types of funds you should target. Think about what stage you're at. I think that's really important. You know, focus on that pre-seed angel level. Even before then, you can't leave out the accelerator programs. I think they're worth looking at applying for just because it is, it can be an infusion of money early before you really have any big milestones. You know, those all have fairly clear and legible points of entry. There are some funds like us that we have a contact form. You know, we do read it. I think this is pretty rare among funds because they tend to be, you know, just inaccessible, tough to get to.

21:10But, you know, there's some front doors out there. You want to find them. Let's see what else in the early... I mean, BoostVC. There are others out there, I think, where it might be easier than others to approach. And I think you should be able to turn them up. What I would say is geography matters. You know, You do want to spend time in an ecosystem of one kind or another, whether it's Silicon Valley, the Gundo, Austin. You want to be near the companies that are building the future or the sector you're in. You want to be near the investors. You want to be a part of these conversations. And the reason I say that is it's like a lot of know-how is passed around.

21:52And then on top of that, a lot of intros. You might meet people who know people. This happens much more easily at a coffee shop than it does, let's say, over X in DMs. It's like just not as friendly. It's just a colder approach. There are also events. There are on ramps into the startup world in these tech hubs. And by that, I mean there are meetups. There are parties. There are places where there aren't gatekeepers, where you can find people who are working in startups or at investment funds. You got to put in this work. It's just part of the business. And another part of this that I would add is that I think is not a hack, but something people should think about is like, you know, a lot of investors like like us, we have a point of view.

22:36We have a philosophy that tends to take us to other types of events where it may not be a startup event. It may be something like, you know, what is the, you know, we hosted events once where, you know, this woman was trying to persuade us all. And she was very controversial because we, it's like she was trying to convince us that it is better to have never existed at all.

22:58Michael Gibson: Right. This philosopher. So we had this woman come talk. The room was full of like some investors and startup founders and other engineers. But we're there to like argue with a philosopher. You want to find events like this because it creates a situation where, you know, it brings together people from the industry, but they're not there to talk about the industry. And I think it's a way to, you know, quickly develop relationships and find interesting people. So for me in the early days, I was, you know, part of the early seasteading movement. In a sense, this is how I met Peter Thiel. This was the crazy idea to build towns on the ocean.

23:34You know, the tech now was never there, but the vision was. And it brought together like really weird people who also happened to, you know, build tech companies and make investments. You know, I think one of the weird things about SBF is that he was such a successful investor because he tapped into this. Like he was terrible at what he was deliberately consciously doing. But his his like side hustle of just investing in effective altruists and people concerned about the existential threat of A.I. turned out to be a tremendous investment portfolio. And so I think you could have gotten investments and there are other investors, not him.

24:13And that, okay, if you have this Venn diagram of interests of like effective altruism, you know, fear of existential AI, and then you also happen to be building something, it's like those investors will support you. So that's one of those things I think people should pay more attention to that doesn't get talked about is like find common interests that aren't in the tech industry, but draw the tech industry in. So those are like the early on ramps of like before you've raised a dollar from anyone. The last, like you want to get warm intros. It's really hard to meet investors with cold intros. You know, give it a shot, but the hit percentage is going to be pretty low.

24:50Michael Gibson: So and everything that you just mentioned, all those on ramps are how you ultimately build those warm introductions. Yeah, right. That's right. I think that's the best way to go about it. Or, you know, maybe you have friends of friends to like hit up your LinkedIn. You just you got that's what we did. We raised a fund. You know, we're in the same situation. And when we first started, we hit our our network of friends and just kept asking around. What about the pitch deck memos? Even if you have these warm introductions or it's going to you, is there anything in those early materials that you're gravitating towards?

25:24Michael Gibson: So for founders that are reaching out to early stage pre-seed, we see pitch decks all the time and half the time they're focusing on what I think is all the wrong things. So I ask you, what are the right things? What are the things that you are looking for in those early materials before you've even met with them? You know, I guess this speaks to the in-person. I love meeting people first and getting to know them a little bit, just getting their vibe, hearing how passionate they are about something. It's just way more compelling to me and useful as an investor because what's going to turn our minds, where we are, our evaluation is going to be in large part based on the team and who you are as a founder.

26:07And the things we're looking for are things like social emotional intelligence. You know, we have a trait we look for we call hyperfluency, which is someone's ability to speak forwards and backwards about their industry, where their business sits within that, why past efforts have failed, why theirs are going to succeed. You know, when it comes to explaining really technical things, using concise, clear language that can be understood, scaling, you know, scaffolding it up to be able to talk to an industry expert, but then coming back down to talk to us, the dumb Labradors. You know, these communication skills are something we really look for.

26:43There's an energy. You know, Danielle calls it dog fighting to get off a leash energy. We want to be the person who snaps your leash off. So it's like we've got to feel that urgency in you. And all of this is very difficult, if not impossible, to communicate over email, pitch deck, memo, and so on. So ideally, you know, that's why it is important to get to meet people in person. When it comes to the pitch deck itself, I would say, you know, we don't put a lot of weight on the professional appearance of the deck. Good design is good, but it's not going to be decisive. I just always think of, you know, Peter Thiel used to talk about how terrible Mark Zuckerberg's pitch was for Facebook.

27:26You know, he, I guess in the movie, if you've seen The Social Network, I guess has some of it wrong, some of it right. But, you know, there were other people in the room. It was Reid Hoffman who introduced Mark to Peter and Sean Parker came and so on. But apparently, like, Zuckerberg is, like, not even talking in this pitch. He's, like, staring at the ground. Halfway through the pitch, Zuckerberg suddenly wakes up and starts pitching a different idea called Wirehog, file sharing service.

27:51Michael Gibson: So it's like, you know, Peter's like, you know. That's a red flag usually. The bad pitch is like, you want to, you know, you don't want, like, appearances to hide substance. And sometimes you see that with professional material. And you don't want a bad presentation to get in the way of substance. But the point is like you want to lead with what's important. And that's what matters to us as investors. But when it comes to the pitch deck itself, I think, you know, there are a lot of books out there. We have a blog post called the Anti-Pitch Playbook. You can search for it. 1517. That's one of my favorites.

28:26We say anti-pitch because it's like, yeah, you don't want to be too slick. You don't want to just rely on this like shark tank 30-minute meeting to incept someone. But, you know, I do find pitch decks useful and it's a good exercise to go through them. You know, there's fairly standard outlines out there. I would say really think about using those outlines, like stick to the beats that matter. We need to know the company. We need to know the problem. We need to know how you solve it. We need to know the team. You know, these are pretty straightforward. You know, don't get too clever in trying to, like, re, you know, innovate with some literary form.

29:04Like, you know, we need a sonnet. We're asking for a sonnet. There are 10 ,000 different ways Shakespeare could write a sonnet. All of them are good. Don't worry.

29:12Michael Gibson: We want it. So, yeah, so I think I think they're pretty fairly standard outlines out there. You don't want to, you know, I'm an old man about some of the stuff. You don't want it to be too long. I think, you know, 15, 20 slides tops. And then in terms of the emails, I think I would hesitate. What I've noticed lately is a trend of using AI to make it overly. It's like a fake personal email. So really focus on that homework you did about who these funds are. if you're getting that warm intro, know the person, you know, that the affordable material that you're sending to your friend, make sure you're like, Hey, you know, Jimmy, I'm excited to meet you to talk about the company, but keep it short, simple and sweet.

29:57Let's see what else. I think that's pretty good.

30:00Michael Gibson: Yeah, that's, that's incredible. That was a lot of good feedback. I love kind of what you hinted at. And I'm kind of curious, the next phase of the fundraising process we typically get into is that initial meeting and what you're looking for. You put, you put it perfectly with letting that leash off the dog and you want to feel that, in this case, the dog is pulling and the energy is there and you feel that pull. And so you're letting it loose, so to speak. How often from the investments, from a high level, is that the order that you're going in, that you're meeting the founders in one way, shape, or form before really diving into something maybe equivalent to a pitch deck?

30:32Michael Gibson: Maybe you still get it, but you briefly look through it. I would say that's the ideal situation. Somehow I've known this person in some way for a month or two. And yeah, we've got some vibes from different meetings, not even related to a pitch necessarily. That would be great because then I just have more information and they have more information about me. Sometimes you're stuck in a situation where you don't know them. Where what we do, we, yeah, we have a process. I think it's, what I will say is this. There used to be a adage in the industry that like, if you want advice, ask for money, but if you want money, ask for advice.

31:09I would say that's toast. Everyone knows you're asking for money. So just be clear. I would love to pitch you. It's okay. You could say that. For us, it's clear. It's like, hey, we want to set up a pitch meeting. The first pass could be just like a call with me or a meeting with me. What I'm going to go over is the ideas basically that are in the outline of that deck. I want to learn more about the person behind the idea. And what I'm asking during that meeting or after that meeting to myself is, do we want to go deeper? The question is not yes or no on investment. It's do we want to go deeper?

31:45So coming out of that meeting, I'm going to take it to my team. We have a couple meetings a week and sometimes I'll say, hey, I want to set up a deeper pitch call next step in the process. Sometimes we talk it over as a team. Should we take the call? Should we go deeper? Hopefully we have an answer quick on this. If it's a no, we, and I think it's, I wish our industry was better at this, but we'll say no and we'll try to give some reasons. I mean, they're not always like the best, but we're just trying to make a judgment call based on very little information. But we wanna be clear like, hey, you should focus your time on other investors, not on us.

32:23If it's a yes, okay, now in the next meeting, we might have, well, more of my team will probably have a subject matter expert if it's technical. That would be someone who's probably a founder in our network in a similar space or just someone else we know over the years. And then at the, you know, all told, we might ask follow-up questions after that meeting. But all told, that process shouldn't take more than two weeks. And at the end of that, you'll have an answer. If it's a no, again, we'll let you know. If it's a yes, okay, great. We'll, you know, we'll start. We'll make an offer. There could be some negotiation on terms.

32:58We just use safes like everyone else in the industry at this stage. But if we work together, then, yeah, sort of the things we mentioned before about what we can do to help you out will start kicking into effect. But for us, I think it's OK. We're deliberately transparent because we think it's helpful. I think it's OK for founders in these situations with other investors to ask investors, hey, what's your process on this? You know, what kind of timeline do you have? I think all too often investors are just totally secretive about their process. They don't want to admit that, you know, maybe they're kicking the can because, you know, they're waiting for some piece of information that they think will change their mind.

33:38Or maybe they don't want to lead and they're waiting for someone else to make the move. I like hate all this shit. You know, it's just great if you can ask, hey, what's your process on this? And they should be able to say something similar to what I said. Hey, it takes two weeks. You'll have an answer. You know, we can't say yes to everything. So I'm sorry if it doesn't work out. But, you know, here's the terms of how we're going to move forward. that I think that would help the industry a lot. Yep.

34:01Michael Gibson: I think that founders forget sometimes that they are in many ways, like it doesn't work without them. They have a lot of leverage and a lot of the power and they should ask those questions. And it's not rude. You can ask them in a rude way, but it's not rude to take control of your fundraising process. And I think VCs, good VCs are understanding of that and want to work with you and make sure that it's fluent on both sides. Yeah. One thing, one question I feel like founders sometimes ask that I'm not sure it helps is, you know, they will ask like, hey, what doubts do you have about this at the end of the meeting?

34:37Or what are your concerns off the top of your head? And sort of what I've found over the years is I just really haven't, you know, it's like because you're just you haven't dug in yet. So, you know, you're put on the spot and you just might say something and it's not even material. So, you know, that question, I'm not sure is helpful. I feel like process questions are good. And then down the road, you can get into the nitty gritty. Like, we'll ask the question like, hey, what did you mean when you said you could trap an atom or whatever? Yeah. You know, I think, you know, that question, you know, maybe find a different way to or just wait for the response when you get it.

35:16Michael Gibson: We're kind of bleeding into the third phase a little bit with somewhat of the diligence process. I love that you have a very clear diligence process. A lot of funds don't. And you mentioned it can be a long maybe or it goes into ghosting territory kind of at that point. Yeah. What should founders do as they're in this kind of final phase where it feels like you're herding cats? You're trying to build momentum. You're trying to have a little bit of FOMO. You want investors to treat you with the respect and prioritization that you feel like you deserve. But it's a fine line. Any feedback you give to founders as they're kind of navigating that territory?

35:50You know, what I like to see are just updates. So, and, and, you know, don't even ask. Yeah. So it's like at the end of the night, let's say you're hitting a fundraising period. It's going to be a six week process. You know, at the end of every week, if you're sending an email with some updates, I think that's fine. I mean, maybe it's less frequent, could be two weeks. If it's like just updates on the business, I mean, that can be good too.

36:12Michael Gibson: Absolutely. And those little updates, and they may include like, hey, this investor's in, that investor's in. I think that for the investors who are on the fence that might be leaning a little bit towards yes, I think that can go a long way. I think when it comes to the final end, you've got to, I think you just got to develop a intuitive fingertips feel for who's on the fence. Are they leaning? No. Are they leaning? Yes. For the people on the fence who are like leaning towards. Yes. I think as you approach that, like final close, you can start to, yeah, start to use like more direct language, direct asks, you know, and I don't like, don't hype up the FOMO, but just say who's in the round and what the, you know, the timeline.

36:55Michael Gibson: is that you're working on. If you want to use sort of alpha, you know, take action language. Great. I've seen that work. It's worked in our case. You know, I told this big time investor, Ari Emanuel, because he's known to be vulgar and to be brusque. I said, Ari, it's fuck or walk. Are you in or out? And he was like, send me the docs. I'm in. I love that. So it's like, you got to get a feel for that. What I think is like, can be hard is like, you know, especially for generating that first lead, you know, the first person investor to make a commitment is always the hardest. And it's going to be really hard to use psychological FOMO tactics to make that happen.

37:32You know, try to, if you're going to learn about sales and persuasion, you got to internalize those principles so deep that people don't know you're using them. Because if you are too, if the tell is too strong that you're trying to manipulate someone, it's just a real turnoff.

37:50Michael Gibson: You know, I had this startup team tell me that they were using Robert Green's 50 laws of power or something on this other investor. I was like, are you stupid? Did you just tell me, your investor, that you're learning how to manipulate other investors? It's a little better than that. So do not. Yeah. It's like if you're going to, there are tactics out there, right? They work, but you got to be good at them. You got to internalize them. So I don't know how you get that practice, but just think about that yeah sometimes i feel like it's just the it has to be authentic like if you have fomo the fomo has to be authentic i love your your thought of writing updates i've seen founders do this like keep writing those updates without an ask until a vc will tell you like you know what hey sorry we're done like we're not exactly but then also eventually if you keep sending those updates hopefully one of those updates does have a legitimate hey we've officially gotten to that Last phase, we're planning on closing in a couple of weeks.

38:49Michael Gibson: We'd love to get some final answers. Sorry to come off that, whatever it might be. But, you know, just keep top of mind. And then you do eventually, hopefully, have real FOMO where you can say, you know, you have the interest. You are closing. It works when you actually have it. Yeah, that's really well said. It can backfire when you don't. That's really well said. Well, maybe one layer I'll add on top now that we're in this age of like AI, especially in the inbox or people are using Claude, is you just have to assume, too, that, you know, those updates are actually better now because Claude is sort of ingesting them.

39:23And when your investor asks Claude what's happening with this company, it'll have, you know, the information to tell this person. I think as a piece of warning, too, we've sort of been debating this as a fund. I think when it comes to us and when it comes to, you know, startups is like, I guess everyone should just assume that, you know, partners are uploading your deck or emails to some AI system. I assume everything I send is now being uploaded into that. So just, yeah, think about that. I mean, if you do have a molecule you've invented and you're worried about the IP, maybe just, you know, ask about, you know, these things are sensitive.

39:59So, you know, just user beware. But I do think it is helpful to create this timeline. And AI is going to help people now even more with that. They'll say, oh, wow, look at this substantial progress.

40:11Michael Gibson: I want to talk a little bit about after the round is closed, because you've invested in some incredible companies and have learned probably a lot from these founders that have broken through. So let's say that they've closed the round. Everybody's celebrating. They're now in this kind of first real company phase. What advice would you give the founders in the first three to six months after they closed their round? What have you seen work well with some of these other amazing companies? I know, I mean, Loom, we talked about Atom Computing. You have different sectors and industries, and you've seen what works.

40:39Michael Gibson: What have some of those founders done well in the early stages after they've closed their rounds? For the pre-seed round, what I'd like to see, we'll set up meetings every about two months or so just to check in. I think, you know, for the more successful founders, treat those meetings as like mock board meetings because it's going to start to prepare you for the more formal meetings that you'll have after seed, but certainly series A. And what those meetings are about is just checking in over the last quarter. What didn't work? What were the milestones we wanted to hit? Did we hit them? What's next?

41:14I think it's just bringing organization and direction to the company. So, you know, there are going to be dark nights of the soul. There are going to be really hard times. I think the best founders have to get used to being exposed or being vulnerable and I guess an emotional way, but also in the sense of like, you've got to see this company as a set, a group working to solve a set of problems. And sometimes I think founders get trapped into thinking like, you know, if they don't share this information, maybe they'll solve it themselves first or, you know, it's not something they're proud of or whatever.

41:48But like if we all have the information, then, you know, then we can we can find solutions. I really do like I can be more life coachy here than anywhere else. I think in this and working with companies, which is like startups are the great revealer, you know, in a nine to five job with a tidy job description. and a little cubicle, you can hide behind your small set of responsibilities. You get those done, you know, you're in good shape. With a startup, you've got to do everything. And it's going to expose all your weaknesses and vulnerabilities in totality. So it's like, let's say you hate conflict and having difficult conversations.

42:28Well, guess what? You're going to have them every day. Let's say you hate being wrong. Well, guess what? You will be wrong every day and the world will not care. Let's say you hate dealing with the media or making hires, or it's like you have nowhere to hide with this startup. Now that is going to be a lot of self-knowledge that you'll gain in running a company than you would get in that nine to five. But the next step is the challenging piece and the life coach, which is like, you have to take that self-knowledge and turn it into self-transformation. Either you have to shore up those weaknesses or find someone else to bear the weight of them and delegate.

43:02But if one thing you can't do is ignore them, Otherwise, you will fail. So what I will say is, yeah, the best founders in the early stages are like, you got to face the ugly. You got to be willing to talk to your investors about things and be honest with yourself. You got to track reality. And if reality is going a different way, don't be don't be afraid of that.

43:21Michael Gibson: And who you become through this process, you know, win or lose, succeed or fail will be worth more than gold. You know, it's just incredible what I've seen independently of financial outcomes. That seemed like that was an incredible kind of tear to end on, I think, because that was a that was a great piece of feedback and advice, not only for founders that are building something later in the stage of their companies, but even in the fundraising process. Everything that you just mentioned is is important as you're going through the the dark time of the soul for fundraising, which can feel like that oftentimes, too.

43:51Michael Gibson: Totally. So I agree that the person that you will become through all of those trials in every phase of it, what you come out on the other end is is incredible. And it goes back to the earlier phase of what you were saying. We have the best job in the world because we get to witness those transformations firsthand. And then as those transformations obviously go on to change the world, which is great. Yeah, it's really inspiring. It really is. Yeah. Well, Michael, this was great. Thank you so much for being on. Incredible advice today, all packed into a nice little package. Where can folks continue to follow you and 1517 and keep on with that journey?

44:27Yeah, I mentioned we have a website if you want to reach out. really accessible. And then on Twitter, I'm William underscore Blake, the poet. So I mentioned I was a tech journalist. I signed up for Twitter when it started. I thought it was for haikus. So my generic name, Michael Gibson, was, you know, quickly taken. So I went with that one. But yeah, I'm on IX, Daniel Strackman's on IX. You can find us there. Nice.

44:51Michael Gibson: Amazing. Well, thank you again for being on. I'm sure we will hopefully see each other in person sometime soon. We were just tracking that you live in Colorado part of the time. I'm in Colorado. Hopefully we'll see each other in person sometime soon. Okay, Matt, thanks for having me on. Appreciate it. Bye.