Amy Saper of Uncork Capital on how startups should embrace constraints to foster creativity, and her learnings from being at Accel, X, Uber, and Stripe

0:00Welcome back to another episode of Venture Unlocked, the podcast that takes you behind the scenes of the business of venture capital. I'm Samir Khaji, and today we welcome Amy Saper, partner at Uncork Capital, where she invests in seed stage B2B SaaS and fintech companies. Before joining Uncork in 2023, Amy spent time as an operator at companies like Twitter and Stripe and also worked at Excel Partners. Today, Uncork has nearly a billion dollars in assets under management and recently closed two sets of funds, Uncork 7, a$200 million fund dedicated to seed stage investing, and Uncork Plus 3, a$200 million opportunity fund for breakout companies.

0:41During our conversation, Amy discussed her transition from being an operator to a VC, the learnings that she transferred over, and her view of why capital constraints foster creativity. This was a fun episode, so let's get right into it. In the fast-paced world of startups, every decision counts. And for venture-backed startups, choosing the right banking partner can make all the difference. That's why you need to consider Grasshopper Bank. Nationally chartered and headquartered in New York City, Grasshopper Bank is a client-first digital bank built to serve the business and innovation economy, combining the best of banking technology and years of industry expertise to deliver best-in-class experiences with trusted security and unparalleled support.

1:22Join the ranks of forward-thinking entrepreneurs who love their digital platform by applying online in as little as five minutes from any device today at www.grasshopper.bank. Grasshopper, where banking meets innovation. Samir Kaji is the CEO and co-founder of Allocate. Allocate and Venture Unlocked are independent of each other. Any statements or references made by Samir or his guests regarding third parties, investments, or securities are solely their views and opinions and are not intended as investment advice or an endorsement of such parties or securities by Samir, his guests, or Allocate.

1:57Allocate or its clients may maintain relationships with or investment positions in guests, third parties, or securities mentioned in this podcast. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Amy, it's so great to see you and thanks for being on today. Thanks for having me. I want to start off with going through your history because you've had a really interesting history at multiple really interesting operating companies, Twitter, Stripe, and ultimately you went into VC. And the first question I always ask people that work at these great companies and work within the industry, why make the change from working at companies to VC?

2:36So maybe you can go through that background. So when born and raised in Silicon Valley, I kind of grew up around technology and I knew that I wanted to be a part of the startup world in some capacity. And I really fell in love with the entrepreneurial ecosystem as an undergrad at Stanford. I was able to join a program called the Mayfield Fellows Program. I know you've actually had a number of other Mayfield Fellows in the podcast. Maybe you're familiar. It's a work study program that really exposes you to every aspect of the entrepreneurial ecosystem. And that's how I ended up at Twitter for my Mayfield Fellows internship.

3:09Started talking to the team when they were probably 150 or so people pre-revenue. First joined as an intern and converted to full-time. And Twitter had actually never hired a non-engineering intern before. So I had to write an email to then COO Dick Costolo outlining what I saw as the opportunities and how I thought I could contribute as a 21-year-old with effectively no work experience. And I'm very grateful that he took a chance on me. I'm still considering one of my closest mentors and advisors to this day. But over the course of four years, I got to wear a ton of hats. And I think you'll notice some common themes.

3:47I wrote a lot of my own job descriptions. So I just kind of threw myself at problems and opportunities I saw. I never paid a ton of attention to my job title or prior experience. And so this was everything from helping build APIs and SDKs for developers, helping small businesses use Twitter, launching new digital commerce products, which a fun fact there is actually how I met my husband. We teamed up on a Hack Week team. He was also working on Twitter at the time and won Hack Week and launched new commerce products. I got to oversee the launch of Twitter's business in 15 emerging markets and moved halfway across the world to Dubai and Singapore.

4:25And it was just an incredible journey going from kind of 200 to 4 ,000 employees, pre-revenue to a public company. Went back to the Bay Area to go to GSB, worked at Uber while I was there. And in my second year, I met John and Patrick Collison, so the founders of Stripe. I remember walking around the mission in San Francisco with Patrick, and I was just struck by his ability to both predict the future of commerce and sort of where Stripe needed to be based on where the market was moving and where he saw things going 10 years from now. And the very short term, which is that Stripe's desktop view of the dashboard was terrible and everyone kept complaining about it.

5:05And I thought that combination of kind of the 10 ,000 foot view and the 10 inch view, if you will, was so rare and something that I really look for in founders today. So I had the opportunity to join Stripe in this really unique role where I was the second marketing hire. We had maybe three product managers. I got to work directly for John Collison, and it was sort of a hybrid product management, product marketing role across Stripe's suite of APIs. So working directly with engineering teams and launching products for marketplaces, subscription businesses, and so forth. And I learned so much over the course of three years there that informs the way that I think today about business models, customer problems, how marketing and products should work together, how to think from first principles.

5:46And one of my favorite parts of my role at Stripe was getting to dive into these different business models, whether subscription businesses like Slack, marketplaces like Lyft or Shopify. And I started angel investing at Stripe as peers from my various networks, founded companies and sought out advice. So I realized that venture was a way to tie together those two things, my love of learning about new products and business models and forging those deep relationships with founders and others in the industry. And so I had the opportunity to move over to the venture side of things, having first learned that this was even a job as a Mayfield fellow back at Stanford, joined Excel as an early stage partner.

6:27It was just an unbelievable first experience in venture. So I spent four years there and got to lead investments in seed and series A companies ranging from AI-enabled applications like Gamma and Logicalope that changed the way people work to embedded fintech companies like Beam that are kind of bringing modern fintech tools to legacy industries, digital health companies like Sprinter and Well Theory that changed the way patients receive care today. But I realized over the course of my time there that I'm a startup person at my core. My heart is really in the earliest stages of company building.

7:02And from a cultural perspective, I just thought that maybe I was better suited for a smaller, leaner, more entrepreneurial firm environment. And I'd heard about Uncork through a number of different connections. A founder friend from business school who was now growth stage, but Uncork had led his seed. And he mentioned Jeff Clavier was the most useful board member he'd ever had. We had a shared investment where Uncork led the seed and Excel led the Series A. I had another close friend who was on a board with my partner, Andy Loughlin. And I heard that they were looking for a fifth partner. They reached out and it just seemed like the perfect fit.

7:38So I joined five months ago this past September, and I'm really loving it. I found this balance between a platform that has a real legacy and a strong reputation behind it with this more entrepreneurial approach to firm building that really resonated with me. So here I'm focused on SeedStage, B2B apps, and API-first companies, as well as B2B FinTech. Yeah, and it's hard to believe that Uncork has actually been around for as long as it Jeff being one of the first true seed stage firms out there, I think it's almost 20 years ago now, mainly his own capital at the beginning. And of course, the franchise has grown.

8:15Congrats on the most recent set of funds. I want to unpack a few things that you mentioned. I do want to talk about the culture of a firm and sort of juxtapose a little bit between working at a firm and working in a company. I had somebody that you worked with before, Adam Bain, on the podcast recently. And Adam is very much similar to, you know, early days at Twitter, helped grow the revenues from zero to a couple billion dollars, was there with Dick. And he actually drew a lot of these insights and thoughts of how he wanted to build a firm with Dick from his interactions with Bill Campbell and how they run their firm and what they think about.

8:55and one of the things I talked to him about is the similarities and in some cases, dissimilarities of working at a startup company that's growing in a startup firm. Now, both of the firms that you joined had been around for a while, of course, Excel being a longtime brand firm and Uncork being one of the first seed stage firms. But now that you've been in the business for four and a half years on the investing side as an institutional investor, maybe you can juxtapose a little bit between the experiences at Stripe and Twitter and what similarities are in running a venture firm? Yeah, no, I think there's a I think there are a lot of really interesting parallels between culture at various companies and culture and kind of operating principles and how you structure yourself as a venture firm.

9:43A couple of things come to mind. First is everything really comes down to serving your customers and aligning the whole company to do so. So in both instances, there might be multiple types of customers. At Stripe, perhaps that was startups versus late-stage companies or marketplaces versus subscription businesses. At venture firms, that might be your new founders that you're hoping to form new relationships with, as well as your growth stage founders that you've been working with for some time. And in addition, your other investors that you work with, your LPs. But really, at the end of the day, it comes down to your founders and your LPs?

10:19And are you building a great product or service and really delivering on what you have set out to deliver and aligning kind of the goals of the organization with what types of behaviors get rewarded, how you choose who to hire? So I think at the end of the day, that kind of customer orientation, if you will, is fairly shared and it just kind of represents itself in different ways. I think one of the more interesting comparisons, if you will, that I've been paying a lot of attention to lately is this tension between balancing kind of growth and expansion with specialization and sticking to your core, watching for scope creep, if you will.

11:00I think in the last couple of years, in particular in the pandemic era tech boom, a lot of companies and a lot of venture firms really expanded their products, the size of their team, the scope of, you know, the types of focus areas or stages that they might invest in. And I think we're starting to see that shift a little bit as companies realize that, hey, resources might be tighter and figuring out how you win in a competitive environment means sticking to your true competitive advantage and what you're really, really best at. And so there's no one right way to do that. But I think the challenge to keep in mind is making sure that you have a strategic rationale behind those reasons to expand your suite of products or your fund size or your focus.

11:51And so I do think that that's an area to pay attention to that we'll see movement here. Some obvious examples, meaning growth stage funds might be retreating from seed, for example. Certain funds we've seen kind of realign their sector focus areas. And we're seeing similar things with companies as well, you know, shutting off business lines and trying to sort of stay focused. And I think that's related to sort of the overarching theme of leaning into your competitive advantage. So if you're at a startup or a smaller fund, often that's your ability to move faster, create alignment more easily if you're focused on, you know, one key product or geo.

12:28So for Umpcork, that's North American-based seed stage technology companies. Like startups versus incumbents, I think smaller firms are better able to pivot and evolve their strategy and use speed as our advantage. In a deal process, we don't have a complex voting structure or the need to wait for a Monday partner meeting to make a decision. A startup doesn't have to wait for the biannual product road mapping two-week-long process with 75 decision makers. If they identify an opportunity, they can spin up a team and go tackle that. And then larger multi-stage firms and larger companies have their own advantages.

13:04But I think being really cognizant about that and leaning into that is something that I pay a ton of attention to. I'm a firm believer. There's no good cultures or bad cultures. I think Twitter, Uber, and Stripe, Excel, Uncork, they all had very strong cultures that were very distinct. And I think that I learned there are different things that I've taken away from each of those cultures that I think can be really productive. And, you know, conversely, things, elements from all of those cultures that maybe I think could be left behind. And so I think the same thing is true, whether you're building a company or a venture firm.

13:41I want to extend that analogy because I really do like the analogy of sticking with your core and certainly when money was easy to come by, and it was easy to come by for most of the 2010s. Of course, the last few years of the peak period and really peaking in 2021, people were able to raise money either as a company or as a firm. And at the company level, you were given a lot of capital because the supply was there. And oftentimes you were forced to either expand quicker than you were ready for, meaning different geos, different products, when you may not have had real product market fit or you were chasing revenue at the expense of unit economics.

14:21And at the fund level, we saw this too. Many firms were raising bigger and bigger firms, funds rather, they were doing SPVs, they were doing opportunity funds, and the capital was there. And it was really a function of adopting almost the business model of your funder versus what is right for you. When you think about that aspect of it, how do you know when it is time to expand scope or expand a product or when it's too preliminary? Because it's so easy to get caught into it when capital is there. So maybe talk a little bit about the Uncorked strategy because you did recently raise the seed stage fund, which is$200 million, and then you have the growth stage.

15:03I'd love to hear how you thought about it and how the team thought about this is the right strategy. And although we're expanding maybe the fund size, it's the right thing for us to do in staying within our focus and where we can win consistently. I think to the point around how did we decide on our fund strategy? And again, I will admit that I joined post-fundraise, so I was able to kind of have conversations through the team. And what really struck me about Uncork's strategy was it was really this nice balance of a fund size that supported our ability to be the lead investors and the first call, which was really critical to me.

15:40It was one of my favorite parts of my role at Excel. There are a number of different ways to to be an investor, but being the first phone call whenever anything good or bad happens at any time or day of the week is both a responsibility and an opportunity that I think is really exciting. And so having the fund size to support the larger rounds that are happening at the seed stage was critical. We wanted to be able to be in the most competitive deals in the best companies. companies and as our you know the average seed might have been 500k a decade ago now it's probably more like three or five million we need to be able to write those bigger checks we want to be at all the best companies and so i think our our round size reflects that and then similarly it does take companies a long time to to go public or achieve their ultimate liquidity event and so we really want it to be able to maintain our ownership over time and so having both the 200 million dollar seed fund and$200 million opportunity fund enables us to do that.

16:39And that balance was something that really appealed to me. I saw similarities, obviously on a smaller scale, with how Excel thought about partnering with founders at the multi-stage level. So no matter where you enter, whether it's seed A, B, growth or beyond, and being able to stick with founders for Uncork, we are often the first check, but then we'll stick with the company all the way through till their ultimate exit. Yeah, there's a lot there. And some of those things probably deserve a little bit more deeper conversation on the macro side. And whether it's the lengthening time companies are staying private and getting to an ultimate exit, the rising size of a seed round, and then of course, difficulty of getting downstream financing are all real right now.

17:27but right now I'd like to kind of focus on this concept of product market fit within a company you as an entrepreneur you know when you have product market fit not only are people willing to pay for your product but they're asking for it you're starting to see a real scale and you're now reaching a point where you're very clear that there is a viable business model In the world of venture capital with so many different firms, it takes a while to really understand if you have product market fit with the founders. Are you providing something meaningfully differentiated than other firms that allow you to see and win and build the right type of reputation that allows for long-term success?

18:10And given the fact that you can now look at your operating background and now you've been in venture, I'm really curious to know how you think about product market fit within a venture firm and what really is needed from a delivery standpoint to get true product market fit with the founders you work with. The way that I think about it is, you know, it's true that venture is becoming more crowded. I think Seed is incredibly crowded overall. Just like the founders are aligning their product or service with their customers, a VC has to align the ways that we provide value to our founders. And I think that for every VC, that is very, very different.

18:51And I think that it relates to your ability to both win the competitive deals and then also support them moving forward. So for me, when I'm trying to get into those competitive situations, it stems typically first from my network. I'm a very network-driven investor. So most of the investments I've done to date have been either first or second degree connections from my existing networks. I think three of the investments I let at Excel had a co-founder from Stripe, for example. And if not, they're likely an intro from a founder or operator that I've worked with. So I think the way that you get connected to the founder really helps.

19:29I, it by no means a celebrity VC, I don't tweet a ton, trying to blog a little bit more, but I really prefer to keep the spotlight on the founders I work with and not me as an investor. So this feels authentic to who I am. But it means if we've never worked together, you might not know my value add and how I show up for my portfolio. So I try to do this in multiple ways. I think in the earliest days, it tends to be customer intros, engineer intros, maybe angel investor ideas. and actually got feedback recently from a founder that I ended up not working with, but spent a bunch of time with who was surprised that I offered three customer intros and then sent them the same day.

20:08It turns out that saying what you're going to do and then delivering it goes a long way in this industry. I also like to show, not tell when it comes to value ads. I connect prospective founders with my existing founders who will underscore how I help tactically and have specific examples of ways that I've done that. They'll say that I'm always on and available no matter the time of day, the day of week. If I'm on vacation, if a founder needs me, I'm there. I think founders put their entire lives into their companies and their jobs are so much harder than ours. So I feel a responsibility to be as available as I can for my founders.

20:45I think the last thing that I'll say on product market fit is every VC has their own perspective, their own background in terms of what they're looking for. For me, I really gravitate towards technical founders that have a unique perspective on a market or customer problem. Ideally, they've worked directly in that area, who maybe are lighter on the go-to-market or storytelling side of things, because those are areas that I feel I can really complement them. And I think one of the benefits of leaning into your unique product market fit as an investor is it enables you to think outside the box or hunt outside the usual circles.

21:24So when I reflect on my ability to identify and source and win the kind of non-consensus deals, I think it's often because it's a setup that just really works for my unique background and characteristics. So there's my non-negotiables around what I'm looking for, which I mentioned, the high levels of technical abilities, their experience in the market. I have to be able to squint and see a really big market and have alignment with the founder and where things are moving. But I really invest in slope and not wide intercept. So I think certain things can be coached, like go-to-market chops, storytelling abilities.

22:07it's essential for founders to learn how to become great storytellers, but I don't think they need to have those skills from day one. John and Patrick did found Stripe with a mission to increase the GDP of the internet. I think the first tagline was like the new standard and online payments for developers or something that was not particularly catchy or inspiring. But they got better over time. And I think storytelling, defining your ICP and excruciating detail, those happen to be areas that I love and I have a ton of experience in. So founders don't have those skills. I'm able to test for a founder's ability to take feedback and iterate.

22:45And it really comes down to their rate of experimentation, not just with their products, but with all parts of their business. So if I can get comfortable with their slope, I don't care as much about the Y intercept. So for me, product market fit means identifying a founder and a team and a market and a product that fits my certain areas of focus, B2B apps, API-first companies, B2B fintech, with those sets of characteristics and areas where I think that my background and skillset can be uniquely complementary. I find that when I put myself in those scenarios, I'm both better able to win the deal and better able to really help them moving forward.

23:28Each founder, of course, and each founding team is going to have their unique strengths and weaknesses and figuring out where you can play coach and helping them get to that next level is obviously very important. You mentioned some of the non-negotiables, right? You have non-negotiables, then you have the negotiables. And in today's world, of course, while the seed rounds have gone up three to five million, what's also happened is the difficulty of raising that next round of capital at Series A, the goalposts have moved, the bar is higher, there's less capital. One of the things that stood out to me when I was looking at your background and thinking back on the Twitter days is I think it was Biz Stone said something around, when you have capital constraints or constraints in any way, it can launch creativity.

24:10And we're in a capital constrained market. Maybe unpack that a little bit, because I know that's something you also hold near and dear to your heart in terms of running a fund or helping founders. But how do you see these capital constraints actually helping founders in today's world? I'm a firm believer that constraints inspire creativity. You know, as you mentioned, this was one of BizStone, co-founder of Twitter, one of his favorite mantras. And at Twitter, it stems, you know, very literally from the fact that Twitter, that tweets used to be sent only via SMS. And back when Twitter was founded, SMS could only be 140 characters.

24:47140 character limit was stemmed from a very real constraint. But even once tweets started to be sent from mobile apps and desktop and that SMS constraint no longer existed, we found that maintaining that 140 character limit really encouraged people to think more thoughtfully around the message that they were trying to put out. And so I think that that sort of philosophy can be applied in lots of different ways. And one of the best ways I think startups have to compete is to stay laser focused on their core differentiators. So I'm ruthless about goal setting with my founders and I'll tie back anything strategic or resource related question to the goals that we've set.

25:26I think particularly in market environments like this, it's really important. I loved Frank Slootman's book, Amp It Up. Have you read that one? It's something, I've got to butcher the quote, but something to the effect of narrow the focus, increase the intensity. And I think this is one of the best ways a startup can compete. More often than not, I see startups taking on too many responsibilities, hiring too many people, expanding their product suite too quickly, when in fact, they can actually move faster by staying more focused. And so I think that's one of the unintended upsides of a slightly more challenging economic environment is that it's forcing founders to make these hard trade-offs earlier on and really figure out if they have product market fit, to question whether or not they really need to hire as big of a team as they do.

26:22And so I think leaning into those constraints, narrowing the focus, increasing the intensity can be really, really valuable. And honestly, I think that that's something that I mentioned, the creative constraints inspired by Twitter. I think Stripe at the era that I was there also did this primarily through headcount. So I wish I had, we used to share this graph that would plot Stripe's headcount growth relative to revenue compared to our peer set of companies. And Stripe was always an order of magnitude smaller from a headcount perspective. And so I think that that has a couple of implications.