Courtney Reum on Venture Capital, AI Hype & Smart Wealth Building 📈 E163

0:05Dan Fleyshman:Ladies and gentlemen, welcome to a special edition of the Money Mondays podcast. We cover three core topics, how to make money, how to invest money, how to give it away to charity. As you guys know, this podcast is designed to be under 40 minutes, around 34 to 38 minutes for your listening pleasure because the average workout is 45 minutes, the average commute to work is 45 minutes. So we'll keep this episode short and sweet for you because we have what's called a 93 % listen-through rate. We stay top 50 podcasts in the world because of our listen-through rate helps us on the charts and you help us on the charts.

0:35Dan Fleyshman:Liking, commenting, subscribing, and sharing. As we dive in, you got to keep in mind, when you're listening to these podcasts, it's not just for you. You might hear from someone that can help someone that's your friend, family, or follower from your past, present, or future. This episode might help you six months from now, two years from now. you might be sitting there thinking I should forward this episode to my friend because of the important person that's on this episode. So without further ado, Courtney Reum, give us a quick two minute bio so we get straight to the money.

1:04Courtney Reum:Two minute bio. Let's see. Chicago born and raised, moved to New York when I was 18. I'm now a reformed Goldman Sachs investment banker. Originally cut my chops working on consumer acquisitions, things like Procter & Gamble, Gillette's merger, helped take Under Armour public, was around all these brands and people that were really contagious, I'm sure we can get into. And it made me think if they can do it, I don't know if I can. So let's find out. So now almost 20 years ago, left that with my younger brother, Carter, who's been my business partner for 20 years. We have been starting things since in the form of everything from a venture capital firm to a bunch of our own things as entrepreneurs.

1:42Courtney Reum:And now we kind of have a little hybrid investor entrepreneur. We have a family office and then a venture firm called M13.

1:51Dan Fleyshman:So M13 gets emails coming in, people pitching. They see you in an elevator. They're pitching you in the elevator. Every way someone's trying to pitch you, what are the first few things to immediately say no? Like this is not something I want to invest into.

2:05Courtney Reum:Well, I mean, from a thesis point of view, like everyone else, we're doing a lot of AI at the moment. So I think part of it's that, you know, we've changed our thesis a lot for M13, meaning we did a lot of consumer. then we were around for the direct to consumer boom then that became consumer technology now it kind of became general technology of which some has a consumer facing angle so i think a big part of it is actually just staying on your thesis but i think it's i think it's that and then you know when you meet people i'm impressed how many people are not succinct and don't get to the point and then other people where you're just like there's something about him or her where i'm going to listen more or they feel like they're galvanizing something and that at least piques my interest.

2:46Courtney Reum:Doesn't get a check, but it keeps the door open. Yep.

2:49Dan Fleyshman:What are things that you're like, you know what? I actually want to go deeper on this and hear it talk to my team. Like I actually like this. Are there certain words or certain concepts or certain things that make you want to invest in something or someone?

3:01Courtney Reum:Um, I think as it relates to the person I'm now believer, the days of, you know, the Travis at Uber, I'll break through walls. Like, you know, what is it? Move fast and break things mindset. I don't know if that's totally gone, but I think now I really look for, we all have pattern recognition, but also bias where it's like, this person reminds me of me. Oh, I bet they'd be great. Oh, I bet they could build a$10 million company. I think it's important to go, this person might be really different from me, but I see all the traits they have that could lead to a really successful company. So I, on the person side, I love the soft things that are harder to test for.

3:37Courtney Reum:You know, you start to kind of see how they deal with a little adversity, a little grit. Those are the things that I think are missing with most founders, right? Because as you know, it can look like up into the right, but it's more like a zigzaggy line. And so I love the founders who say, here's what I'm good at, but here's what I'm not good at. And therefore, here's what I'm building. Here's what I'm hiring, who's I'm surrounding. It's like being a president, at least in theory, you can't do everything. So you have to hire great people in your cabinet and lieutenants and all that. And I think I look for that in the people and then in the idea, you know, so much.

4:07Courtney Reum:I'd say today though, I almost look for things like when someone starts telling me they're an AI company, but I'm like, you're not only not an AI company, you're a company that's not even a data company. You have some data that you may or may not know how to use. Like that, that kind of is the immediate turnoff when everyone just says, oh, dot AI. And I'm like, but you're not an AI company. Right.

4:25Dan Fleyshman:So there's a lot of companies that are raising at different stages. Some of them are raising a seed round when they're first getting their idea going. Some are raising their series A, like, you know, between one and$10 million range. And then some of them are series B, like I want 10 to$50 million CD, et cetera. Did you evolve over time of what companies you wanted to invest into? And what would you say you land now that what stage do you like of a company?

4:48Courtney Reum:Yeah. Well, the great news is, is that I actually think, uh, I kind of have something for everyone these days. Meaning if I like, uh, the person and the, where the company is at, I can probably find a place for it. Meaning, uh, as we were talking off camera, cause we haven't seen each other in a second, I'm newly married. Right. So my wife and I, I'd love to circle back to like we're just kind of starting to do some investing together right and so she likes to do very early checks things like she's focused on women's health and beauty so something to go there for our family office really we have total flexibility and we've written you know small mid eight figure checks to you know seven figure checks and we have a lot of flexibility where we go there.

5:31Courtney Reum:And then for M13, it's pretty much bigger seed in series A. So the good news is I would always show something to M13 first if there'd be a conflict. If they're like, it's too early or other people agree it's not a fit right now, sometimes I write a personal check into something and then we can track it for M13. And then every now and then it's good when some of my partners aren't on board with what I'm doing to just go, you know what, I'm just going to put a flyer in this just so we can talk about later. There's one of these new-ish fantasy sports betting apps we decided not to do as a firm i put in 100k personally and it's marked it 19x in three years and we're like yeah we could have used that one on the on the table their portfolio

6:10Dan Fleyshman:so for the founders that are listening that are out there how do they approach a vc firm how do they get the attention because you get bombarded by hundreds of options throughout the year especially as you guys and your firm have gotten more and more famous and done more and more deals your name is on the radar right so people go to m13 and they're applying how do you filter through Like what can make them stand out so that a VC firm will listen to them?

6:30Courtney Reum:I think it's harder and harder because as you know, like the, the cost of ideas is, is really cheap. The execution is dear. And like, I literally just yesterday was, this isn't even meant to sound like a brag, but was like going to our IT firm going, I need you to keep tightening the spam filters. Cause it used to be, I'd maybe get like 50 cold outreaches today. Now it's like easily over a hundred. And so it's like a day. I mean, and so it's like to just even look at that and say, oh, this is spam, market a spam or delete it. I mean, it just takes so much time. It's hard to have an assistant do because occasionally there's something in there that looks like spam and it's not.

7:04Courtney Reum:Diamond in the rough. And then you never know, you know, when someone's like, I have a friend who has, do you want to get the introduction in my head? I'm thinking, heck no, but you never know. And occasionally it does happen. So you kind of have to stay open-minded. So I think that's a long way of saying, I will be honest, it is pretty hard to just, as they say, it's not hard to get someone's email these days. I can tell you Tim Cook's email. It's hard to get Tim Cook to reply. he's never replied to me right so i think you have to and and we i'm sure like most people as sad as it is it is very hard to expect someone i don't know from a background i don't know maybe with an idea i don't know to hit my inbox and me to just take a look at that that would be a tough use of time so really trying to find either some mutual touch point or a unique way to get in touch i mean this is this is kind of an analog example but like back in the day as emails taking off i I remember this guy who's a real well-known entrepreneur and he was trying to land sales accounts and he would send FedExes to everyone to get their attention.

8:00Courtney Reum:Why his theory, and again, this is like 2000, so bear with me. But he's like, if I was sending you a FedEx and it was still novel enough, it was something where chances are a lot of people's assistants didn't open it or even if it was 50-50, a much better shot that the boss opens his own FedEx because it was new. And he's like, I would just keep sending someone to FedEx every week till they replied. And they're like, okay, I got it. I'll take a meeting. And he's like, oh, no problem. I was just kind of warming up. And I do think I like to call it pleasantly persistent. I think everyone has to find their way to be pleasantly persistent.

8:35Courtney Reum:And if you want it badly enough and you really think it's the right fit, but it's also too many people kind of shoot their shot with like, I'm like, and so what? Like trying to, I don't know, either connect it back to the value prop, the win-win, why this fits with our firm's thesis, why I'd make a great angel investor. Sometimes people lack that and it's not always obvious at first glance. It might be obvious to them, but I'm just meeting them and hearing about it for the first time. So it's all those little nuances.

9:03Dan Fleyshman:So on the personal side, there's also a huge amount of options, real estate, stock market, cryptocurrency, cash flowing business. How do you decide for yourself, what else to consider investing into?

9:15Courtney Reum:Yeah, it's a really interesting time for you to ask me that question because my brother and I've been business partners for almost 20 years. We have obviously started the same things, invested in the same thing. So it was kind of easy to keep our money pooled. Now we're starting to change a little in that I just got married. He's been married for about four years. He has a couple of kids. So maybe our needs change, maybe our, you know, kind of monthly, yearly nuts change. So I think we're in the process of exploring that, meaning, I don't know, our late father used to always be like, diversification for the sake of diversification isn't good.

9:51Courtney Reum:You know, that's how you end up in stuff you don't know and whatever else. And I think there's truth to that, but there's also, like anything, risk appetite, right? And so for the last almost 20 years, starting when my brother and I had very little money compared to now, we had a very much a barbell approach. We were in tons of illiquid private things, different companies we started, different things we invested. And then there was like what I would call just enough money sitting aside for the rainy day, where if it all disappeared that 90%, the 10 % would give us enough to rebuild. And that was great.

10:21Courtney Reum:And I'll say, over the last 12 years, my brother and I's personal IRR return has averaged 44 % annually. Whoa. And let me tell you, like, if you knew where we started and where we're at now, the power of compounding is a very powerful thing. 44 % over 12 years has changed the trajectory of my life by, like, many, many zeros. And I think it's important, though, to also, right at this moment you're asking me this, I'm realizing that the risks I took, which I'm glad I did, and thankfully on the whole they paid off, are not the same risks I want to take. Because the risks I had to take to get here are not the same risks I want to take to preserve capital.

11:00Courtney Reum:and still grow it, of course, but just not take the risk, whatever it is, to have a 44 % IRR. I'd be very happy with something in the, this is where my brother and I are divergent. He's probably pretty maverick and he still wants maybe not 44%, but he wants 20s.

11:13Dan Fleyshman:I was like,

11:13Courtney Reum:you look how many few things have net 20 % IRR. It's like, I'd be happy with like low teens, somewhat set in, forget it. So I think I'm in the process of going, we should have hedges against this or that, or have some, we have very little that's like monthly income cash generating. you could teach me a lot about real estate other than personal properties i own which have kind of stacked up we have no other real estate as an investment so i think we're in the process of doing that as we get more liquidity we all grew up thinking it's rude to talk about money

11:44Dan Fleyshman:you talk about it so bluntly which is my whole passion which is the whole reason i do this podcast is be able to have real life discussions where it's not rude we we need to talk about what happens if my friend borrows 400 bucks and doesn't pay me back what how do you tell your kid what to do what if your 17 year old wants to lease a car or should they rent a car buy a car like we think it's rude to ask about salaries why is it rude to ask about salary what if you don't tell your kid who's 22 years old that you should get paid 60 grand they get paid 45 now they're on the hamster wheel for an extra 60 years until they get to 60 when they should have actually got that from the beginning like we got to have these discussions was that something that happened in the household like when did you feel like okay we can have a blunt discussion about money yeah

12:24Courtney Reum:Yeah. I think my parents, and especially my father, who I referenced, he was really good about, as you said, like, I think we're roughly the same. I mean, no one's teaching financial literacy, right? So he wasn't trying to teach me financial literacy in the sense that like, I, you know, went to Columbia and Harvard and you do case studies and balance sheets, but just going, those are the things that they can teach you at an MBA. What they don't even teach you is like, how much of my disposable income should go to rent? I mean, now people are talking about that. But when I was a kid, I mean, even when I was in my first apartment, no one talked about it.

12:55Courtney Reum:So I think my parents taught us enough to have an idea, but they were a little bit of that generation where I would have no clue how much we did or didn't have growing up. I would know that like, oh, our house is a little bigger, a little smaller than Johnny's. I would know we can afford to go to a nice dinner once a week, but just kind of understand that directionally. Yeah, I think so much has changed, right? We live in even parenting styles. I don't think you can live in, my parents were kind of really loving, but in that benevolent dictator sort of way. I don't think you can be as much of an authoritarian now.

13:25Courtney Reum:I think you just have to be very open with your kids. So this is just one of those. But I think to answer your question directly, the person who said to me, it really stuck with me is we have some businesses with Tony Robbins, including a longevity startup called Life Force. And so obviously, as he would say, proximity is power. And when I'm around some of his stuff, he just said it quite simply. My goal was always to help people live their best lives and whatever else you ascribe to Tony. But then he wrote a bunch of books on taking control of your financial future because it was great that I helped you do your dream job or do this or leave this or change this habit.

13:57Courtney Reum:But now if I don't help you think about how to manage your money, it could all be for not. And that really resonated.

14:03Dan Fleyshman:So as you go through your journey, you've watched the evolution of things that are now we're in the AI world. How important is it for people to add AI into their life, whether it's their business or their personal life?

14:16Courtney Reum:I think it's really important because, um, ironically I invest in tech as a profession, but in my personal life, I can be a bit of a Luddite in the sense that I'm a little bit risk averse to the, to the change. I have an iPhone 13. It works just fine. I need to about change it because nobody, no Uber drivers have the right adapter. So it's stuff like that where I'm like, but my phone works just fine for what I do. I think AI is different. I think it's that not everyone has to be like this super embracing of it. But I mean, even personally already, the fact that chat GPT is running commercials just for the tab of chat GPT health tells you how powerful they think this could be.

14:57Courtney Reum:So if you need a more selfish reason that I doubt there is one, but I don't think you have to be like understanding how LLMs work at a deep level. But I think if you don't play with these things a little, start to train, watch the little power of it, you'll just feel like you woke up one day and you live in a world you don't even recognize because it's so incremental, but incremental every day that adds up to just a tidal wave behind this little wave.

15:22Dan Fleyshman:Let's talk about the charity side of the podcast. Why do you think it's important for brands to consider to have a charity component into their brand for their employees, customers, clients, vendors, et cetera, to see? Yeah.

15:34Courtney Reum:I mean, I think the days of they're not taking political stands or what you stand for or what your give back is, I think, you know, people demand more from their brands and there's all the legacy examples of cool companies like a Patagonia who was the first to show you here is actually how your sheep started out and where we did this and the supply chain. So I'm very much into that side of things. So I love that kind of, you know, supply chain transparency and different things like that. But I think, you know, you know how it is just kind of culture 101. Like a job is not enough for most people anymore.

16:06Courtney Reum:When you see unemployment rates, not even here, but you go to places like China and it can be as high as like 20 percent. It's because they're just not engaged. They want more than just a paycheck and to work, you know, that that what is it? Nine, nine, six, nine to nine, six days a week. you can't do that unless you're connected and you want you want uh your product or your brand or you believe in what you're doing so i think first it's always the internal bringing along people who are mission driven i'm i'm a big triple bottom line guy right do well by doing good or like people planet profits whatever colloquialism you want to use i just think it's so important because it it doesn't matter it's like working out it doesn't matter whether you're doing it for like vanity reasons or just general health, it all goes toward the greater good.

16:51Courtney Reum:And chances are, if you connect it genuinely, your product or company will do better and you'll have better culture and you'll have more evangelism among your customers. So it helps everything.

17:03Dan Fleyshman:Would you like to have children? I do.

17:06Courtney Reum:I'm sure my wife will listen to this because she knows I was coming over. So that is on the roadmap in the not too distant future. Start working on 2026.