Ask Forgiveness, Not Permission: Josh Browder on Building DoNotPay and Investing Like a Founder

0:00Alon Goren: To even get a million from A16Z. So I had breakfast with Mark and you would think a breakfast would be enough to get a million from a firm as big as them. But the answer was no. He said no, we have to have like three more meetings. And then finally I pitched the entire A16Z partnership. And to even get a million back then, Mark Andreessen, Ben Horowitz, Chris Dixon, Scott Kapoor, the entire firm was there, like 20 people. Now a scout of a scout can write like a million dollar check.

0:36Josh Browder: This podcast is for informational purposes only and does not constitute investment advice.

0:42Alon Goren: Please see full disclosures in the show notes and in the end of this episode.

0:47Josh Browder: Welcome to Origins, the podcast that dives deep into the business of venture capital, where we learn how the people behind the capital, both GPs and LPs, make decisions. I'm Nick Turles, partner at Asylum Ventures. My amazing co-host Beezer is out this week. So just me. On this episode, I'm joined by someone who has worn many hats in the last decade. Joshua Browder is the founder and CEO of Do Not Pay and the GP, solo GP, behind Browder Capital, an early stage focused venture firm. What makes Josh's story so compelling is that he's not just the founder of Do Not Pay. He started it in his dorm room at Stanford, actually, even earlier, the summer before.

1:27Josh Browder: But he's also built a truly unique venture firm backing young, early-stage founders just like himself 10 years ago. Let's bring him on.

1:43Josh Browder: Joshua, thank you for doing this with us. Visa is out this week. Thank you so much, Josh, for doing this with me.

1:53Alon Goren: Thank you so much for having me.

1:54Josh Browder: Yeah, I've been a fan of your company, your work from afar. And I would love to hear just a little bit of your backstory, your origin story.

2:04Alon Goren: As you can tell from my accent, I'm originally from England in London. And I moved to the US when I was 18 for school at Stanford. And between the transition of high school and college, I started a company called Do Not Pay, which I still run to this day almost 10 years later. Do Not Pay is the software version of anti-establishment. We've helped millions of people appeal parking tickets, save money on bills, fight companies and the government. And I started it because I'm Mr. Do Not Pay myself. I'm the type of person to wait on hold for three hours just to save$20. And I understand not everyone has the time or the energy to do that themselves.

2:47Alon Goren: and so a company like Do Not Pay is a good solution for them. And so with kind of 10 years in, we're very profitable. We've raised about 20 million from top investors like Andreessen Horowitz and Founders Fund, but we actually have more money than we've raised and we pay dividends to our investors. And so it's like Do Not Pay is not just a company, it's also a kind of mindset as well.

3:12Josh Browder: Could you tell me about the origin story growing up in London? in? Did you imagine being a founder and entrepreneur? Was that in the cards?

3:25Alon Goren: I was joking to one of my friends. I was a CS kid at the peak of being a CS kid, where if you knew now everyone can just do clawed code and stuff. But when I was growing up, if you even knew how to make an iPhone app, you were like the top 1%. And so that's how I got into it. iPhone was really my gateway drug. When I was about 12, 13, I jailbroke my iPhone, which means you override Apple software to get custom themes or custom apps. And I started building and selling custom apps and custom themes. And so that was how I got into it. And then I thought, well, maybe I should start building real apps on the Apple App Store, because the market for real apps is probably bigger than the jailbroken apps.

4:10Alon Goren: And I started selling apps and um i really loved it and what really inspired me about software is you can make something and build it and you don't have to take anyone's permission to do that um i really you didn't want to wait 20 years to get like approvals from various managers to sell something i just wanted to go ahead and do it and i even in my apple developer account registration i guess because it's like uk the kind of kyc was not as good back then they i just registered myself even

4:42Josh Browder: though i was pretty young uh were you supposed to be 18 or something definitely yeah okay got it got it what kind of apps were you building have you heard of a sandwich chain called pret-a-marche

4:53Alon Goren: of course yeah so i built um i know i i love pret-a-marche growing up i would go there every morning before high school and i built the uh pratomage app they didn't have an app back then and um apple noticed the app and actually offered to feature it and once again they sent all these disclaimers like we want to feature your app um do you have a copyright and stuff and just like signed uh he signed everything um but i didn't even get permission from pratomage and it went in the top charts. And they actually sent me a kind of season desist letter, but they didn't realize that there was like a 14 year old behind it.

5:34Alon Goren: And so when they realized there was a 14 year old, they realized it would be terrible PR to kind of sue a 14 year old for an app. And so they actually invited me into the headquarters and they actually made it the official app. So they took off my hands and wow and it taught me about a lesson which is in some instances maybe it's better to ask for forgiveness than permission and it still exists to this day that's an amazing

6:00Josh Browder: story you came to the us were you at stamp you did you you started do not pay as a while you're

6:06Alon Goren: in school as a freshman yeah so i i started coding do not pay in that summer between high school and college where no one really knows what to do with their lives and so that was my kind of summer project and i really didn't expect anyone to use it um i had a rumor among my family and friends that i was the person who could get people out of parking tickets and so everyone was coming out the woodwork messaging me for help with their tickets and i thought just from a practical standpoint i gotta automate this because um i don't have time i'm just like starting out going to like new student orientation i don't have time to like do all these tickets for people and um so So I created it just for like 10 of my friends.

6:49Alon Goren: And one of them was, I guess everyone tries to do things to get into college. And one of them, her project was she was a blogger at the Huffington Post. And she said, can I write a blog post about getting out of my parking ticket with Do Not Pay? And I said, sure. And she wrote her blog post and she's a great writer, but maybe her blog post get like 500 views. This one went internationally viral. like it was on front page of reddit like picked up by cnn bbc and i i was shocked because i went from like 10 people using do not pay to 50 000 people within a week and it was very stressful because i was also in my first week of college and so it was like a crash course into virality and starting a project that got got a lot of traction that i never even expected how did you manage that

7:39Josh Browder: like just personally like were you like oh shit i can't really go to the first classes because i

7:45Alon Goren: have to manage 50 000 new users it was very stressful and actually um three years later that the kind of breaking and this was a constant stress during my stanford times and three years later um just to graduate from stanford you have to take a breadth breadth of requirements and one of them is something called creative expression and i'm a software person so i i don't probably strike you as very creative, which is very true. I'm not very creative. And the easiest way to -

8:15Josh Browder: I don't think that's true for what it's worth, but yeah. I mean, our whole thesis is that founders are creative.

8:22Alon Goren: You're definitely an example. And do not pay. We were doing some other launch and it was going, we're getting hundreds of thousand people in and I needed to scale the service. And I had a choice. Do I go to this dance class to graduate? That's the easiest way to satisfy this requirement or do I work on the service? And that was the tipping point where I decided to take the Teal Fellowship and to kind of take a two-year break. So I actually took the two-year break with like one class pending.

8:51Josh Browder: Oh, wow. Wow. And the entire time company's bootstrapped while you're in school?

8:58Alon Goren: So I'm really motivated by the mission. When I started Do Not Pay, even as it gained traction, I really just hated the government and hated these big companies because no one likes to be ripped off. And I felt like maybe I'm not the most sympathetic person, but the government was really issuing tickets to make money, not necessarily to punish people. And I saw in the work that Do Not Pay was doing, people who are homeless were getting tickets, people who are disabled were getting tickets. And especially with the big companies as well, um they were issuing a lot of these like comcast fees and stuff to make money and so i consider making do not pay a non-profit um just just to like uh kind of a guerrilla warrior software to fight back against this but i um got a dm from mark andreessen um on x and he said do you want to grab breakfast at my house in um atherton and this was like a dream come true because i never really met anyone like that coming from the UK.

10:01Alon Goren: And so I went to breakfast with him and he really changed my whole trajectory because he convinced me that the biggest impact companies in the world are for-profit organizations. The incentive structure of a profit company just pulls people forward so much that you get more done as a for-profit company. And so I raised my pre-seed from A16Z while in school and then raised the seed after I got the fellowship.

10:27Josh Browder: Do you still believe that?

10:29Alon Goren: I believe that even more now. And even on a much, much, much bigger scale, you're seeing that with open AI, with the transition to a for-profit. I think structurally in society, you need to have a for-profit often.

10:43Josh Browder: Walk me through the decision for Teal Fellowship. I mean, it sounds like you had already raised some money. Company, you know, obviously already has product market fit basically since you were 18. It sounds like. I'm curious just to learn more about Tail Fellowship, how you decided to do that. I mean, you obviously could have left school and just worked on the startup. You had raised capital.

11:07Alon Goren: It's a really amazing program. They gave$100 ,000 as a personal grant to the prize winners. And now it's$200 ,000 because they've adjusted it for inflation. And there's no strings attached. They're not taking any equity. They're not forcing you to do something. it really is a non-profit grant. Perhaps that's one of the few impactful non-profits. In any case, for me it was really about the community. So it's between the ages of around 16 years old to 22 years old and you have these peers who are facing the same challenges that I was facing. And I was a bit surprised going into an entrepreneurial place like Stanford you would expect most of the students were doing startups and actually now that's more true but back then a lot of my classmates just wanted to go and work in investment banking go work at big tech at google and facebook um and so i that was a very distinct moment i remember turning to one of my classmates and i needed to hire like someone older because of uh do not pay um we were trying to classify this is before like um the chat gbt era if we were trying to use like bayesian classification to classify buy parking ticket signs and I wanted to hire like a 45 year old machine learning engineer to do it and I couldn't convince him to work for me because I was 19 and I turned to one of my Stanford classmates and I was like how can you convince a 45 year old to work for you and I would imagine that they had no idea because they weren't trying to hire a 45 year old themselves and I thought I need to find people like me who I can turn to and ask these questions.

12:48Alon Goren: And so I took the fellowship and it was absolutely incredible to rely on my peers for all sorts of advice. And the very first, I haven't mentioned this before, but the very first kind of retreat, they made you share rooms. And interestingly, now they don't make you share rooms on the retreat. I guess Peter Thiel has done so well with his investments that you can get your own room. But back then they made you share rooms. And my roommate is the co-founder of a company called Fluidstack. And those are the type of people that it's just amazing to learn from and kind of trade notes with.

13:27Josh Browder: Who were the first hires for Do Not Pay? Who did you convince?

13:31Alon Goren: I think I'm very pro to your fellowship, but one benefit of college is you have a whole pool of talent that you know very well. And so a lot of them were kind of the mission-driven people who would browse reddit at 4 a.m with me and the stanford dorms looking for hacks and so i hired a lot of my stanford classmates um and i actually did convince that 45 year old to join for a

13:54Josh Browder: project you did yeah okay wow um so how long were you just solo i was solo for about six months

14:02Alon Goren: after raising the money um the very first precede i was very scared to even spend a single dollar The money just kind of sat in the bank account. And the reason for that was Do Not Pay had a huge amount of usage, but we had no business model. I think I was so inspired by the Guerrilla Warrior style thing that I didn't even know what the business model was. So I didn't want to spend any money until I realized what the business model would be. And ultimately, we settled on a subscription model working for our users and things like that. But that wasn't clear from the beginning.

14:37Josh Browder: Your story is really interesting. Actually, I first started investing in 2011. And, you know, in that era, it was like, there was a lot more bootstrapping that happened early on in the company's life. Folks tended to, it was harder to raise capital. So, you know, you would typically like, just whatever it took, nights and weekends, and figuring things out. And some of those constraints, I think, forced creativity and very, very rapid learning. I'm curious when you think about the market today and folks raising, you know, huge seed rounds and, you know, on an idea, like how much of that, how much of those constraints do you think were actually like critical to you finding a sustainable success with the company?

15:32Josh Browder: And I'm curious if you would advise other founders to do similar things. And yeah, curious how you think about it in the context of the market today.

15:41Alon Goren: I completely agree with you. The constraints were real. And the people back then building companies really, really believed in what they were doing. To even get a million from A16Z, I had to pitch. So I had breakfast with Mark. And you would think a breakfast would be enough to get a million from a bigger step.

15:58Josh Browder: But the answer was no.

16:00Alon Goren: he said no we have to have like three more meetings and then finally i pitched the entire a16z partnership and to even get a million back then mark andreessen ben horowitz chris dixon scott kapoor the entire phone was there like 20 people like right me to try and they're voting and all this stuff now a scout of a scout can write like a million dollar check um right and so um it's become almost too easy i think there's an article in the stanford review which is like a controversial student publication at Stanford, it's easier to get their thesis. It's easier to get into YC now for a Stanford student than it is to get a job.

16:42Alon Goren: Now, I'm just kind of repackaging their idea. I'm not sure I agree with that or disagree, but it makes you think. And especially now I'm doing a lot of investing, I really kind of index on trying to relive my journey and people that are really in it for life versus just doing a company for the sake of it for the summer.

17:03Josh Browder: One last question on do not pay, just because you mentioned at the beginning, very rare you hear about a company that's profitable, hasn't touched the capital that they've raised and distributes dividends to their investors. Curious what the reaction was from investors, from team, like how you think about that, just because it is unusual in Silicon Valley days or Silicon Valley these days.

17:33Alon Goren: It's a combination of things. I think it's our mindset as both the do not pay mindset, which is like frugality, but also international mindset. Like at least where I come from in the UK, the companies exist to make profit profits and be sustainable. people. And so that was that. And then also the nature of the business. With consumer, the inputs and the outputs don't necessarily correlate. Like with enterprise, if you want to get customers, you have to hire salespeople. With consumers, they either come in or they don't. And for us, about 85 % of our user acquisition is organic. So word of mouth, SEO, and increasingly today, GE, which is by people finding us on the LLMs and earned media as well.

18:20Alon Goren: We're very good with that. And because it's organic, we realize, and the pricing is very affordable for consumers, we didn't want to dump money into paid marketing to acquire a customer that maybe is worth$150, but we have to spend$200 to get them. And so it's a double-edged sword where we wanted to be sustainable, but we also didn't want to dump money to grow unsustainably. And so it happened by accident, but also because of our mindset. So we had all this money and we decided it would be a really nice win for investors to get some money back and also the team as well in kind of like a pari passu way.

19:03Alon Goren: And some of them are still with the company even today after many years and they get dividends.

19:09Josh Browder: I imagine somewhere along the way, I'd love to hear a story or two, uh, that, um, the government, I don't know what companies, but, um, you know, the Verizons of the world, Comcast of the world, uh, you know, want to want, do not pay to obviously not exist. Um, curious if there's a story or two there and how you've managed those relationships over time to

19:35Alon Goren: extent they exist at all yeah it's an arms race between us and the companies and actually this is like a philosophical problem of like concentrated benefit and spread out harm so what i mean by that is like um comcast can charge 10 million people uh ten dollars so they make a hundred million dollars but the people being charged ten dollars um have no incentives so comcast have a huge incentive to kind of stop us and we see that with a lot of the companies we fight so i'll tell you two quick stories one uh adversarial and one positive um the adversarial is um uh robo callers so we built a product that allows consumers to get compensation with the spam calls and even today i get a huge number of spam calls and there's an amazing federal law it's called the Telephone Consumer Protection Act, which allows people to get up to$1 ,500 every time they get a spam call.

20:32Alon Goren: The problem is that people don't know how to enforce their rights under this law because the spammers are using fake names and fake numbers, and you don't even really know who's calling you when they give you the spam call. And so at Do Not Pay, we built this trap. And the way trap works is it's a special do not pay fintech credit card and when they try and sell you something you can say i'm very interested um here's my here's my credit card and it's not your real credit card it's a do not pay card and when the the scammer or spammer tries to charge the card through the payment network it gets their business name address all the details and it uses that to track them down and send them the demand letter for the cash compensation and the spammer's absolutely hate this.

21:21Alon Goren: I can imagine.

21:22Josh Browder: I mean, that is brilliant. And it's gone to the point where

21:25Alon Goren: I've seen screenshots of telegram groups where like people are saying, if the first four digits of the card start with the do not pays that we use for our fintech product, do not just hang up the phone and never call this person again because they'll get you. And so I think actually, even though maybe the consumers uh the spammers are avoiding the do not pay customers now um and they probably won't get the compensation at least they're not being spammed um so that's the adversarial story that the positive story um is um when we were launching so we're doing parking tickets city by city early on because it's different in every city and when we launched in los angeles the head of the um parking ticket bureau was interviewed by npr and npr said um what do you think of a service I do not pay?

22:17Alon Goren: And this was better spin than even I could have come up with. And the head of the parking ticket bureau said, we actually like a service I do not pay because whenever it comes from service like that, at least we can quickly tell whether the appeal was legit or not. People write such gibberish in their parking ticket appeals. At least it's a standardized format. And I think moving forward like 10 years later in the LLM era, perhaps that that's very true today with kind of customer service and llms they can actually make an efficient world for everyone um like airline tickets the cost of an airline ticket 10 to 20 is actually customer service related so if you wipe that to like one percent with ai then it actually reduces prices and it's a positive sum for both the big companies and the consumer so

23:03Josh Browder: that's kind of the positive spin story yep you have a venture fund a venture firm uh broader capital and I'm curious how that started, how you manage both, both running a company and also building a venture firm. I don't know how much you can share, but it's not just angel investing. You seem to take it very, very seriously and do a great job. So I'm curious how that came to be and how you manage both efforts?

23:36Alon Goren: So maybe this reflects about, I love investing at heart, but I actually won my Teal Fellowship prize money. The money just hit the account. And there's a tradition within the Teal Fellowship where the fellows actually help out with selecting the next class in various capacities. And so they asked for my help evaluating a candidate. And I met this candidate it and i was instantly blown away by by how amazing he was um and and so i thought i gotta try and invest in him um and um so i i took all of my teal fellowship money and invested in him at the kind of free pre-seed um wow and um that company and he changed the name a few times it stayed the same entity, but it was owner.com.

24:30Alon Goren: You read about on X, like the first investor in OpenAI or the first investor in Anthropic, they're up X percent. And I look at my owner investment, and I'm like the multiple on that investment beats even those kind of Anthropic-style investors. And it taught me a really valuable lesson, which is it really pays to be early. and so i i've refined my strategy i've raised um four funds now but the current model is i only do what i call pre-precede first check-in and it's a very high depth models um and i take one person at a time move them into my spare bedroom um go all in to help them i've got one staying with me right now um he's not in my apartment right right right now um and use all my often move them to San Francisco, if they're not from the US, put their visa on my credit card, use all of my social capital to introduce them to people.

25:29Alon Goren: And then they raise an institutional seed. And then I move on to the next one. And I'm lucky I've done that with a few and they've become multi-billion dollar companies. So I'm really excited. Amazing.

25:41Josh Browder: How do you decide to start Browder Capital?

25:44Alon Goren: Well, just from a practical standpoint, I wasn't winning any more 100K prizes. and this was before this was before the scout fund this before do not pay was paying dividends and the scout fund mania you see today and so i thought i want to keep this going and and kind of raise more money um but i actually started broader capital by accident i was doing like these like 5k personal checks like once every four months or something and there was one company i did that in um it was actually my uh um someone at stanford one of my classmates And as you know, when safes convert, all investors in the safes and also the price round that follows gets a full disclosure of who came in at what price.

26:27Alon Goren: And so I did one of these small personal checks and the company was graduating and raising their price round. And one of the investors in the price round kind of saw my name and saw the valuation I got in at. and they reached out to me i guess they're very very kind of high high um hustle and paying attention to these details and said wow it's very impressive that you you did this please send me some more of these next time you see them and i said and i think life really just comes down to like one or two split second decisions and i hadn't even thought about this before this call but i said well actually i'm raising a fund if you're interested and i just decided on the call to raise the fund.

27:07Alon Goren: And he said, I'm in for 200K. And once you get the first 200K, everyone comes in. And so that was my first 2.5 million fund, how I got started and gradually scaled up from there.

27:24Josh Browder: How do you settle on this model of working really closely with one founder at a time? I mean, I can sort of understand how it makes sense. Was that like a time constraint thing? And how do you manage running a company and also spending so much time with founders that you work with?

27:45Alon Goren: I really love lots of different types of investing. I think there's so many ways to win. But for me, I really love to relive my founder journey. Actually, in the seed round of Do Not Pay, I got 19 rejections before I got my first seed investor for the real$3 million seed round for Do Not Pay. pay and kind of working through that traumatized me so much that um i like to help founders avoid the kind of delays that i i faced and so i do it just for a real love of the game um i would do it for free don't tell anyone that but it's just so fun to watch people's dreams come true um and actually the person who's staying with me just graduated they raised their seed and so they're moving out the next few days and it's just so nice to like see people's dreams come true um In terms of running the company and the fund, I actually think it helps both.

28:42Alon Goren: So I'll give you kind of two concrete examples. On the do not pay front, I actually learned about SEO and all of these organic acquisition strategies from that very first owner.com investment. The founder is very, very good with marketing. And after I made the investment, we were riffing about that. And I thought I got to do this for do not pay. And that actually has generated tens of millions of revenue for us just from kind of that inspiration. So it helps to kind of have a pulse check on what the best entrepreneurs are doing. And then on the investing side, founders love to work with other founders, especially these like college dropout precedes.

29:25Alon Goren: They really respect other founders and it's less so about kind of traditional money managers. and if I were a founder, I would love to take money from another founder versus a professional investor, at least when I was just starting out.

29:40Josh Browder: What have been the biggest learnings in the last few years investing?

29:44Alon Goren: I think one of my biggest mistakes has been, as investors and entrepreneurs, our imagination can run wild about what the company can do in an adjacent space, but the idea really has to always come from the entrepreneur. So I have a policy. I do not suggest anything they should work on, which might sound crazy. I say, it's your job to build the product and get customers. I will help with everything else, fundraising, getting your team, all of that stuff. But I'm not going to tell you what to build. And the reason for that is my biggest thing I focus on when investing is grit. And if the idea doesn't come from that, that almost discounts the grit score by 10 % because it should have come from them.

30:29Alon Goren: They should have been so obsessed that it came from them. And so I actually think IQ is overrated. I think you need beyond average, kind of above average smart people, but the kind of stampede of people going to these math competition winners and stuff, and those can make great investments, I think is misguided. I think I would rather any day of the week taste someone who will never give up no matter what, because if you have someone who's smart, who will never give up, of course, they're going to have some level of success.

31:00Josh Browder: How do you pick and choose even who you consider as part of the potential orbit? And where do you find the grit? And how do you evaluate that, especially for a really young person?

31:14Alon Goren: So I've seen thousands of these through helping out with the Teal Fellowship alone. I've evaluated over a thousand people just through that. And then tens of thousands more through through like parties and various investing over the past six years. And there's like a Supreme court quote, you know, when you see it. So it's very difficult to quantify exactly. But so the first thing I do is like, before I even meet them is like speed of responsiveness. Like, you know, let's meet 10 PM tonight. And if they say no, I'm two weeks, I'm traveling or something. You couldn't even tell just by the logistics.

31:49Alon Goren: Okay. So then you go to the meeting and then everything they say, I kind of ask for immediate validation on like, okay, so they say, oftentimes they might even have some revenue or users. So they say, I have 5 ,000 a month in revenue. I'm like, let's pull up your revenue count or Stripe dashboard right now. I want to go through it. And then the dodgy ones get really nervous and like, oh, I don't have the Stripe app on my phone. What serious entrepreneur doesn't have the Stripe app on their phone using Stripe? And then once you kind of, you build this staircase of like, okay, they're not dishonest.

32:24Alon Goren: That's good. Then I look for a top 1 % skill or something in their childhood that they've demonstrated. So with the very first Teal Fellowship money investment I made with Adam Guild, he was building and selling Minecraft servers. And that was very lucrative for him. And you see waves as entrepreneurs. With my wave, it was like jailbreaking then there was minecraft servers then it's like competitive drone racing then it's uh selling sneaker bots sneakers yeah all these different things and um we live in such a noisy world like you said they need to be able to distribute a product and so um you look for evidence of that then um i kind of look at their strategy and um i i asked them what's your goal next three months, three weeks, three days.

33:18Alon Goren: And a kind of D minus answer to that would be, I want to get a partnership with OpenAI or Anthropics, some vague nonsense like that. A kind of A answer to that question would be, well, on Wednesday, I'm meeting a dentist in Milwaukee to try and sell them the$500 a month thing or something like that. And so you want people who are really tactical and and then i kind of take them through my my program and um invest in them um one thing that i'm really cautious of though right now and i think we touched on this at the dinner is the problem with today's generation of entrepreneurs is they're using chat gpt deep research and cord research um on this very podcast so they're taking everything So they say to chat GPT Deep Research, prepare me a script for Joshua Browder.

34:09Alon Goren: And it's taking everything from this podcast and they're going to use it against me as kind of an arms race to try and meet the filter when they don't actually meet the filter. So maybe they'll say something like, oh, I was doing Minecraft in my teenage years because the AI told them to say that from this podcast. And so, but because I'm a founder myself and because I've seen so many of them, I can still tell whether they're fake or not. But kind of ideological fraud is on the rise.

34:41Josh Browder: You know, there's a lot of new fund and firm managers that listen to Origin. And, you know, the first fund sounds like was very organic. Someone was like, hey, I'd love to invest in you. You sort of use that. That's very clever. I'm curious how you've approached fundraising for broader capital over the last four funds. Lessons learned there, maybe similarities and differences compared to raising capital for do not pay.

35:09Alon Goren: So my fourth fund, I have zero reserves. And that was a lesson I've learned over time. So for my earlier funds, one of my funds, I put in 15 % of the fund into owner. um obviously the very first investment into owner was a personal investment but i thought i'm going to double down and put 15 of the fund in the series a which is a great investment given that it's a unicorn now but i realized that the opportunity cost of that investment given the valuations i go in at is like 40 precedes and and so um i decided on my fourth fund to have no reserves and i also decided to really max out the depth um with i guess the similarities is I try and be different in everything I do in life.

35:54Alon Goren: Like we do not pay. There aren't that many companies I do not pay where it's like this like rogue help consumers style software. And same with Browder Capital. I think there's a lot of funds out there. But what I'm trying to do is like a one person YC or a one person HF0, both because it's one GP, me, and also one person at a time. And there aren't that many people doing that. And I think the depth is really exciting.

36:21Josh Browder: How have you approached raising capital? Is it from the same people in the first fund? I think you have some institutional investors. I'm curious how that came about. And also how you got LPs comfortable, both investing the firm and also running a company.

36:40Alon Goren: So my first three funds, it was really just kind of leading GPs, like individuals in the Bay Area and my friends like Adam Guild is an investor in my fund when he became successful. But my fourth fund, I said, I'm going to finally go institutional. Now there are like amazing institutions that I work with like Sequoia and Sandana and lots of other great folks, anchors of my fourth fund. And it's a lot easier to work with institutions because there's a higher dollar per what per kind of engagement um and so um i still have my amazing lps from my first three funds and my fourth fund but i've tried to go more institutional over time questions on still running

37:22Josh Browder: a company like i i know i know you know some of the institutional lps over time have gotten more comfortable with this uh yes division um and maybe i i think sandana has like a specific program actually even or dedicated I'm not sure if it's a dedicated pool of capital but investing in uh folks that are running firms and also running companies that seems rare I I assume you had some conversations along the way where they're like uh or maybe they perceive you as less serious

37:52Alon Goren: as an investor because of it I'm curious okay so I'm biased but I think if the person is not running a company then that that raises questions in and of itself so um I think that recently I'm really lucky people have paved the way um for institutional lps to become more comfortable with kind of operator gps like lockheed groom is a great example physical intelligence is like a 10 billion dollar company but he um he has an amazing investment track record as well um the founder mercury is another one and dylan field is actually a great example um he has a fund um yep jack jack jack allman many others and and so um they've kind of paved the way and i I think the question one has to answer is, will the company kind of consume everything?

38:39Alon Goren: And if I was starting out with do not pay and my service were crashing, it would definitely be the wrong time to be investing because I wouldn't even have time for the dance class, let alone to invest. But now we're kind of not going to run out of money in three months because it's profitable, so it's a lot more stable. And you see that a lot with all the other. And so I think once it's stable, it reduces the concern a lot.

39:03Josh Browder: advice for other founders or other young managers that are thinking about starting their own thing

39:11Alon Goren: definitely start a company um even though there's a lot of companies right now i think building something has been the most rewarding thing ever and i see a lot of my friends they're like should i do a fund or a company i always say try and do the company um why do you think people are

39:28Josh Browder: deciding between one or the other?

39:30Alon Goren: I think on the surface, being an investor can seem glamorous to some people, but in reality, the stars are really the entrepreneurs. And I think that's really why I love my entrepreneurial energy and still running Do Not Pay when I work with these pre-seed founders. One of my favorite sayings in life is that there's three types of people, those who make it happen those who watch it happen and those who wonder what happened and i think i worry that investing is like closer to the second or even the third category and so it's really good to be as close close to it as possible um so it is surprising that they would consider both given that they're different jobs we talked about 10 years earlier where do you see yourself 10 years out honestly i i'm i'm just trying to get through the next three weeks i have I have so many.

40:21Alon Goren: I'm trying to get someone a Series A here and do all these deals. Actually, just before this Riverside conversation, I closed a deal on Zoom. So I was very happy they're moving to the Bay Area.

40:33Josh Browder: Amazing.

40:34Alon Goren: And one thing I'll say is that one of my really successful companies has actually been Riverside. So it's amazing that we're on Riverside. Oh, really? Oh, cool.

40:43Josh Browder: Cool. It was a great product. Okay, last question, and then we'll wrap. Are you ever going to go back to the dance class and finish? Get your degree.

40:58Alon Goren: No comment.

41:01Josh Browder: It's one class. I assume you could do it anytime, right?

41:06Alon Goren: We'll never know. Okay.

41:08Josh Browder: Cool. Cool. Joshua, thank you so much. This was an absolute pleasure. Yeah. Mad respect for you and do not pay. and all you do for founders. So this was really fun and appreciate you taking the time. Thank you so much. Thanks for listening to Origins, the show where we discuss the venture ecosystem through the lens of myself, Ajipe, and Beezer and LP. Please rate and review the podcast. Take a minute, go do it, please. It's super helpful for other folks looking for venture insights to find our show. You can also keep an eye out for more by following myself and Beezer, who couldn't join me today, unfortunately, as well as OpenLP on X and LinkedIn.

41:53Josh Browder: I'm Nick Churls, and we'll be back soon. Thanks for listening.

42:17Josh Browder: an offer, solicitation of an offer, public advertisement or recommendation to buy or sell any investment or other specific product. Information is based on sources believed to be reliable, but no warranty is given as to accuracy or completeness, and it should not be relied upon. Alternative investments are speculative, involve complex instruments, and carry a high degree of risk. Investments and strategies discussed may fluctuate in value and may not be suitable for all investors. Listeners should make their own independent investment decisions. No funds are being discussed on this podcast.