N/A we are back with the limited partner podcast this week after our Hiatus last week to hold space for the victims of the terrorist events of 107 both Israeli civilians as well as Palestinian civilians suffering from the war as a first generation Refugee who's fled anti-Semitism in Russia and whose family was murdered by both Adolf Hitler and Joseph Stalin has been deeply disheartening to see the open celebration and Silent approval of war crimes at the highest level of our institutions including my alma mater Harvard University we hear your silence and the silence is deafening with that in mind we must now focus on what is known in Judaism as tuna Lam which roughly translates to Healing the world which means DET traumatizing the innocent victims on both sides of the barbaric acts of terrorism on 107 this week's episode is with Shai Goldman an Israeli American who has worked tirelessly for the star of community since 2001 Shai and I are both personally supporting United hatala a volunteer-based first responder organization in Israel and we ask that you consider doing the same full information and show notes below we now return to the previously recorded N/A episode those are interesting glasses David uh what's a scoop I'll take them off for the podcast actually jcal I just interviewed him a couple weeks ago he put me on this I do know jcal he's supposedly the best moderator in the world that's what I hear his track record is pretty interesting he's pre investor SE investor and front Robin Hood obviously Uber superhuman I do have a jcal story I met Jason when he was doing open Angel Forum when the super Angels were coming about in the micro VCS back in 0708 a lot of folks weren't cutting checks but the super Angels were so he would get together a crew and he called it the open open Angel forum and I was in the room when Uber presented to the group so a lot of people had had a a first look at Uber it was in San Francisco at Pier 38 which was Dog Patch labs and so I do remember this see the Uber pitch at the really preed stage so he helped put that together and a lot of people don't realize that if SF had good taxis there's a good chance that there would be no Uber it's pretty wild how something so local could become so Global kind of the power startups well Shai thanks for coming on uh you've been a super connector since 2001 so you've seen so many cycles you you were at svb at that time and then later 500 startups and today at brex welcome to limited partner podcast well thanks David for the invite and for having me great to be here great to have you on so before we start I did have a mutual friend asked me about the brex campaign the billboard campaign that that famously brex did as an early stage company tell me about that when you know brex went through YC they actually N/A pivoted from a VR startup to what is brex today so went through YC pivoted during uh brex and was ready to launch uh the big campaign for for brex was really out of home billboard advertising and so I believe the first employee non-founder employee was Michael tanom he had worked at Sofi Sofi had uh interesting campaigns at ad of home and so I believe it was his idea uh it maybe blonde as well who was a chief Revenue officer to do an out of home billboard campaign and so they bought all the inventory in San Francisco it was very inexpensive because it very little competition so for around $300,000 they bought every billboard on 101 in SF all the bus shelters every uh billboard available they purchased or rented and that was a massive launch that got them a lot of press a lot of customers and it was relatively inexpensive for a major launch and and the credit card for startups was really the moniter that was used at the time and everyone still remembers that pitch and since that time now you see a lot of startups using out of home and billboards as a way to Market themselves and so brex is really the the first one to do a major campaign of that scale so it's very effective we still use it today for the brex corporate uh we also use it for client shat outs we also do uh free advisory services for clients who want to do major billboard campaigns will do free Consulting for them Henrik who's CEO of brex have said that that campaign that original campaign generated a 100 million in revenue for the business one of the reasons I like that campaign is because of course every venture capitalist believes that they're impervious to biases and that was basically a way to make brex seem much bigger at the time and and a lot of VCS fell for it and ended up growing into this Behemoth that we have with brex today so we'll we'll get back to brex but you've had a really storied career as I mentioned from 2001 starting at svb so you've seen everything uh you were in svb in the 2000s tell me about that N/A experience I joined svb at the nuclear winter which is the sort of 2001 2004 time frame uh people call it that uh because it was post.com it was post 911 and really the valley was was severely impacted from a layoff perspective and Venture activity so I joined in 2001 as Tov was the few companies was actually hiring at that point so I graduated from University and was fortunate enough to get a job so I came in during this nuclear winter where there's very little venture activity Founders really had to bootstrap it probably the toughest Market that I've seen for Founders and so if you made it through the 2001 2005 time frame you came out of it in 2006 in a really good spot because you boot TR the business you've gotten to revenue you weren't well funded and just burning a lot of VC money so is actually an interesting time to build pretty large companies you've been N/A through 2001 2008 now the 2022 downturn how do you compare those three 2001 was was really the hardest from a Founder VC perspective 2008 was pretty shortlived in the sense of there's a lot of Tailwinds with AWS and cloud computing which was new and really lower the cost for Founders there's Facebook apps actually starts building on Facebook until they pulled the plug same thing with Twitter and then the Apple Store in a similar vein very little venture activity in 2008 2009 so Founders did have to really bootstrap and figure out how to fund their business without Venture activity and I'd say this current market relative to the other two is the easiest from a Founder perspective in terms of know there's still Capital available there's still a ton of EC funds that have dry powder you can still get revenue from different sources whether it's B2B or b2c and the subscription and so it's still not easy now but it's easier than the last two downturns from my perspective in terms of those last two downturns how did VCS and how did investors super Angels micro VCS as they used to be called a fair in during those time periods yeah so 2001 N/A to 2005 or so a lot of EC firms imploded they had raised massive funds leading up to 99 2000 do uh Y2K era you know it's really good to study that our history of of tech and so a lot of VC firms imploded VC firms had to reset and figure out what their new focus is going to be many firms didn't make it through the dotom the 2008 is actually I think the most interesting from my perspective because that's really the rise of the micro VC at the time it was called Super Angel these were small funds that are all household names today which we can talk about later but really these small 50100 million funds from my perspective sort of ate the lunch of these Behemoth funds on San Hill Road they're a lot more Scrappy and really made a name for themselves and really changed the game of how you interact with Founders these platform services that really came out of 2008 the blogging the content the value ad those are all things that kind of rose from the 2008 Market it really kind of changed the game in a sense from The Venture perspective it seems like VC has really bifurcated into this artisanal crowd of basically you know the Mike Maples and the Roger arberg of the world and also this late stage platforms like Andre seoa where's VC going the next five years yes so it's it's sort of barbell you know I think that's kind of a continuation what we N/A saw the last five or six years it's either small funds or super large funds and not much in the middle so it's kind of these sub $200 million type funds or Billion Dollar Plus vehicles and and the middle kind of the 200 to billion was sort of The Sweet Spot for Venture for many years and decades and now you're either smaller or larger and so I think there's just a continuation of that a lot of the mega large funds will continue on we've seen them raise new funds this year this vintage so they're in a pretty good spot and I think where the the change is going to happen is zero to 200 well there'll be a lot of new names just similar to 2008 uh there's a whole crew of new VCS that came out during that uh downturn but I think look Ventures is still more and less the the same thing I think the question really is what I've seen right now is Founders who don't want to raise a lot of venture money so really the last I'd say six seven years you saw Founders who aspirationally want to raise a lot of capital multiple rounds and through this downturn I'm running into more Founders you say you know I want to raise a preed or seed round but then get to to revenue and breakout and not be dependent on venture capital and I think that's a healthy thing to do so I think there'll be less companies that want to pursue these Mega rounds and so the question is these large funds that have 1 billion five billion dollar not AUM but current fund size is there enough opportunities for them to actually deploy Capital let me push back on that on my second startup I raised less than 2 million and I had a nice exit and I totally understand that but if I had scaled I would have had to take on a lot of money and the reason for it is that if I wouldn't have done that I was first space compor would have emerged and basically eaten my lunch so we don't operate in a vacuum so how is it that companies even if they're post- revenues how could they possibly compete with a company that has a war chest just being in this market for about 20 years N/A I haven't seen really data that say you know the more money you raise the the better spot you're you're in or that you're actually going to win I'm sure there's anecdotes of that but generally speaking when I see companies raise a lot of money and usually too much money from my perspective there's sort of a lack of discipline of how you spend money because when you have a lot of money in your checking account you actually usually spend it and you have a a two-year Runway and the board wants you to grow grow grow and you have all this capital and it's all about getting more and more revenue and the CAC increases and so I think too much venture capital is a disservice for for most companies and so I think smaller rounds less Capital can put you in the spot to win and maybe you don't become the number one player but if as a Founder you know if you own most of the company and you get to a really nice exit you're actually do much better than raising seven rounds of financing being heav diluted and then only owning you know one five 10% of the company also one of the most underrated trends that I see in the next 5 10 years is AI not because AI is not what everybody is talking about but because AI is going to lead to significant efficiencies within business the verticalization of AI one of my personal thesis is startups will need significantly less capital in the next 5 to 10 years to scale to get past product Market fit and if and when that happens they'll also have access to much less dilutive Capital because once a company is truly de-risk there's access to other forms of capital that I think will be available to startups potentially from the mega funds potentially from a new asset class we're excited to have you on because you are one of the super connectors and emerging managers you're Infamous for your data set what led you to start collecting the N/A information on the emerging manager data set and how do people access it and and where does it stand today I've always been a numbers driven individual even going back to when I was a kid and so for me it's been a way where I'm curious about data and then I want to share it luckily enough I've had access to resources before pitchbook which is it's been around for a long time there was Venture source and so I always had access to these databases that are pretty expensive they have a lot of content but they don't always serve it up to you and so just quering and pulling up you know data I think is interesting and sharing and that's really why I got to where I am today as far as data I also started tracking VC firms are below $200 million in size when uh I was at 500 startups part of my role there I was wearing a lot of hats was really helping portfolio companies think about their next round of financing they've gone through the accelerator now they want to raise that seed round or now they call it preed round and so I would ask the founder to hey go look at this list do some homework come back to me with 10 or 20 firms that you think are good fit for you and let's figure out which ones we can make introductions to and so it was really a resource for my role of 500 for the portfolio companies and then once I left 500 I continue that on and so that's been going on for about 14 15 years now I think it's a great resource and that's where the velocity of new funds are in that size and so we'll continue to to upload that if anyone has a fund they want to add to that please reach out to me um on Twitter and you mentioned the zero to 200 million there's a consensus around some of the top people in the emerging managers that a lot of those up to 50% of those will cease to exist what are your thoughts on that VC funds are just like startups in N/A many ways I mean they're trying something new sometimes they swing a Miss sometimes there's not a lot of discipline which we can talk about later so you're going naturally going to have I think a higher turnover and just like startups go out of business venture funds do and so I think it's always been like that you know when you're starting a venture fund you're you're taking this risk there's a lot of things you can't control like some of the macro and whether LPS are writing checks or not so yes I think we'll have more turn over there and I find it sort of an natural process one of the reasons I started this podcast is to help the industry during a difficult period it may not be 2001 may not be 2008 but it's up there so let's focus a little bit on the positive if 50% of emerging managers will come out of the market that also means 50% of emerging managers will stay in the market what is going to make the emerging managers that succeed succeed there's always a narrative of there's too many VCS out there that's always N/A been the narrative since I started in this community for 20 years the positive thing is there's always an opportunity for a new Venture fund and that's mainly because they're really disrupting the incumbents and the incumbents are usually larger funds that have had some shift in strategy and check size and so there's always a new space to fill in and so as the Venture fund gets larger it gets more challenging to write smaller checks and so it creates an opportunity for a new fund to write smaller checks and be a little more Scrappy when you are the incumbent you get a little more relaxed you don't have as much as that fire in the belly and that this not just for VC firms but for startups and companies or incumbents there's always room for a new entrance and so I think it's true for emerging managers and I'm excited about that what makes them interesting it really depends on what their strategy is and the team makeup and their LP Rolodex I I think to increase your chances of success in Venture it's really important to to be disciplined across many various areas and so it's easier said than done to be disciplined and Venture and it's across a few facets so I think about uh F fund size I think about vintage I think about size of team and strategy or sector focus and what you've seen usually when VC firms have a challenge or collapse or go um out of business it's because they had a substantial shift in one of those four facets and so if you stay in your lane and I'll give you some examples you're going to increase your chance of success as an emerging manager so if you look at some of the firms out there Foundry Collective IA Ventures USV K9 pivot North those are firms that consistently have a similar strategy and so they might have increased their fund sizes a little bit but not drastically the team hasn't changed that much as far as number of investors the sector or strategy hasn't shifted and they're not raising funds backtack years and so what we saw the last three or four years is really a lack of discipline and I'll give you some example one is around vintage you're supposed to be deploying a fund in usually three or four years and that's if you're stay disciplined you sort of stay in that cycle and over the last couple years we saw people raise funds every year that's unnatural and lack of discipline I think the the biggest one is really chasing Subs sectors that are hot and the firms that I mentioned they know the lane that they're in and what they're focusing on and then there's like team size right I I think it's hard to generate 3x DPI in 10 years when your fund sizes get much larger and you have more GPS and you're you're managing more people and so there's a question of like you know does venture scale if that's your goal of 3x DPI in 10 years it's hard to do that when you're a larger fund if you're an emerging manager the my advice would be stay consistent and discipline around vintage fund size team sector and you'll be in a better spot doesn't mean you're going to win or you're going to make it through the other side but I think it's going to make you in a much better spot to Wi hey we'll continue our interview in a moment after a word from our sponsors The Limited partner podcast is proudly sponsored by angelist if you're a N/A Founder investor you'll know angelist builds software that powers the startup aony eony Angelus has recently rolled out a suite of new software products for venture capital and private Equity that are truly gamechanging they digitize and automate all the manual processes that you struggle with in traditional fundraising and operating workflows while providing real-time insights for funds at any stage connecting seamlessly with any back office provider if you're in private markets you'll love Angelus news Suite of software products and for private companies thousands of startups from 4 million to 4 billion valuation have switched to angelist for cap table management it's a modern intelligent Equity management platform that offers Equity assuance Employee Stock management 409a valuations and more I've been a happy investor in angelist for many years and I'm so excited to have them as a presenting sponsor so if you're ready to level up your startup or fund with angelist visit www.angels.com TLP it's angelist TLP to get started back to the show couple things to unpack N/A there I was watching our sister podcast uh Eric torberg turpentine VC uh interview on Mike Maples and he was actually talking about Roger arberg and one of the things that he talked about is Roger arber's discipline in investing in software like business models and win or take most economics I think one of the difficult things about discipline is similarly to diet it's simple but not easy and it's not in a vacuum as you mentioned uh today it's AI two years ago it was crypto 3 years ago it was AR VR it's very difficult to stay uh disciplined in the face of Financial Temptation and I think that's what makes their greates great their ability to be confident in their strategy enough to stay disciplined and part of the things that is implicit in their discipline is their conviction and their own strategy the deeper the conviction the deeper this discipline and a lot of VCS emerging and even established VCS are just following Trends they don't know they might be following sequoia or Benchmark or Floodgate and they don't know why those firms are doing what they're doing when the winds shift they change as well because they're not rooted in their strategy and rooted in their discipline just to add I I did leave a few Venture firms out um bloodgate and and first round capital and and there's there's definitely a good crew there who' stayed pretty disciplin consistent being disciplined is boring in a lot of ways from the outside looking in right because you have to be disciplined over 15 20 years and so for the next 20 years of your life as a emerging manager as a GP you're basically doing the same thing for 20 years with not you know raising much bigger funds and getting the press and adding a bunch of headcount and chasing the shiny object reminds me of a couple quotes one is Jack wellsh used to say when cosos get bored they start doing Acquisitions it's one of the one of the fastest way to to destroy Edge in traditional businesses the other one is Warren Buffett when he used to visit factories he would look at the factory and if the factory was very boring and just humming around he he would be very excited and if there was always some kind of fire or something going on you knew that there was the wrong psychographic of the management that's true for startups I think a lot of the startups that maybe sound boring where there's not a lot of press or drama or heat on the deal and they're not raising a bunch of money all the time and they seem kind of boring but then if you talk to the investors and the employees and the founders of those companies are actually doing really really well they have good margins and un economics and the CAC makes s and LTV and they're actually really really solid businesses so boring is good in our business one N/A counterintuitive advice I have for CEOs that might find it difficult to be very disciplined you know there's a lot of very creative people obviously an extreme example of that is Elon Musk unfortunately not everybody is Elon Musk so very few people could actually pull that off but one advice I have for those kind of entrepreneurs is to actually become a micro VC and have you know a rolling fund you know5 million $10 million to maybe be able to write Small Checks Into other companies it's a little bit counterintuitive because a lot of VCS see that as not being disciplined but it allows entrepreneurs to live vicariously through others so that they're able to stay focused on their business it also gains a lot of knowledge and you're able to learn in parallel instead of waiting for the next startup To Be A Serial entrepreneur so I think depends on the CEO but that could actually work pretty well for a lot of entrepreneurs I think if you could balance investing and deploying Capital while running your business you should especially there's some Alpha there and it's interesting so the question is can you balance all those things I know the job of a Founder talking to them it's it's really challenging from a Time perspective but you're also meeting a lot of interesting people and you know why not back them if you think they're interesting and you know they're not joining your company but you want to invest in them it's all based on an individual if you have a really a strong itch it's better to scratch it and not to sabotage yourself if you don't need to do that it's better not to do it and to focus on your startups in terms of the current landscape you mentioned the 3x DPI which I think is a good Benchmark N/A for a successful fund what do you see among funds that are able to achieve a 3A DPI being a VC is easy but making money and making good money for LPS is extremely hard and so I think a lot of folks are in the camp of deploying capital and that's not the the game of venture it's really returning a lot of capital to your LP and so one is I I think a lot of people have the wrong lens and it's not about deploying capital and sitting on boards is how do you actually make money and the 10 years is important because you know a lot of these funds now are 16 18 years and they're doing multiple extensions and so there's this 10year framework that you know LPS and GPS have agreed to and not too many people can do that in that Set uh parameter of 10 years and 3xt pii I think a lot of it's around um the discipline that I mentioned earlier is important and then there's certainly the conversation around ownership I think it is important to have meaningful ownership in companies if you want to consistently deliver 3x funds can you do three funds of 3x DPI not too many folks have pulled that off you can get not lucky but you can have you know 1% ownership in a company and it's a major major home run and you have a 3X DPI and maybe it's a it's a coinbase or Uber or door Dash or or Airbnb but can you do that consecutively in three funds I think it's hard to do when you have low ownership and so ownership is still really critical if you talk to a lot of EES who have DPI they'll tell you that ownership is is critical now there's another side of the camp that says you know you can generate you know DPI with not having substantial ownership but I'm in the camp of you need to have 10 15 20% in order to be consistent in this business but they're always outliers and you could get a 3X fund without having that one of the most interesting guests N/A that we had was David Clark from vcap he analyzed their returns at vcap from 1986 to 2017 I believe that was the time frame uh over 250 funds uh over 11,000 positions and one of the things that they found is that of all the 3x funds 90% of them have had a fund returner so the the path to a 3X or higher in 90% of cases uh has been to have a fund returner now I would preface that as well they don't do pre-seed and seat so the rules of the game are a little bit different we may have a debate on that there are as you said two camps two very intelligent camps on this very topic I have a personal preference that I will not State here we'll leave it to the debate another interview that we had was with Abe aan and one of the things that he found out was was how important it is to get enough of a distribution of returns in order to get closer to the mean the mean inventure is roughly 50% irr the median is roughly 10% so if you're not indexing the mean as AB othman would say as Jamie Ro would say sampling the mean you're very likely to get the median and the dispersion and venture capital is more greater than any other asset class I totally agree this is all about grand slams and outlaw ERS the business that we're in couple comments on that though the top company that drives the 3x does not look like a super top company generally speaking at the preed round and so I guess some anecdotes of being in the valley when these companies were established Uber even up to the series B there's still questions of whether you know that's a real business or not there ways to get into that deal a lot of firms passed on the A and B round of uber Uber was also available on angelist your anyone on angelist was able to invest in Uber was that their nval Syndicate I think it was before syndicates existed it was just a deal on on angelist and meno was involved the series a uh similarly if you look at Airbnb I remember when they went through YC and seoa invested in them and it was called airbed and breakfast and people were like you know what the hell is seoa doing this is a couch surfing startup couch surfing was actually a startup as well it was a thing that people did around the world and so there's a lot of stories like that it was not going to be clear that they're going to be amazing companies at least for the outsiders maybe the obviously the founders thought so and maybe the initial investor but you're taking a risk and and really the you thing about the Grand Slams are usually ones are not obvious and are usually contrarian bets seems that there's a special factor to the N/A founders ability to be different an ability to be non-conventional I believe the technical term is be unconventionally correct and then have the market catch up to you soon enough to raise the next round that's always the caveat if you're unconventional for too long you're not going to get funded in the next round you mentioned what you look for in startups but what do you look for emerging managers or even emerged managers what is that secret sauce that makes them able to pick out that next Uber the next Airbnb I think it's usually ones and we talked about this earlier is one where you're not chasing the trends like you have a point of view and the point of view usually varies from others in the market you have some unique Insight or maybe you're you're chasing code boring sub sectors to me what stands out with a a GP and emerging manager you know do you have a a unique lens or unique Network or just a unique perspective Ive or you're just an individual that gets into really interesting deals and someone like um like samil at hyack you come from like unconventional backgrounds you have maybe some Venture operating experience you know I also look about the the background of the GP how hungry and Scrappy they are and I don't think there is a natural path to venture that makes you really successful if you look at some of the biggest names driven DPI to LPS they're usually individuals or somewhat Outsiders they didn't work at a major fund didn't have a successful exit there are people who really were Scrappy to get into build fund one had something a unique angle and so I think more LPS should think less about pattern matching and really try to to figure out you know what is the background of the the GP and what's driving them what's motivating them and what unique angles they have speaking of the background unique angles one of the things that really has me N/A scratching my head is that it seems like a lot of the top the Hall of Fame of early stage is littered with generalist investors not Specialists you would think that somebody that's close to the ground maybe an engineer maybe a data scientist or somebody that's really focused on specific space will be the first one to that Alpha why do you think that the generalists are able to capture so much of their early stage home runs this Camp of generalist fors specialist I think you can make money in either camp and so I don't agree with like the dogmatic perspective where you either have to be a generalist or a sector specialist and that's true for again going back to the gp's background I don't think you need to be an operator or founder or GP somewhere else you can make money in many different ways and Venture and I don't think there's a clear path to to 3x DPI and I see examples in both camp camps where you can make a lot of money and so I think with the generalist it's more around do you have the EQ to capture really the best Founders who are diligen in the GP why do you get an allocation why does the founder believe in you and a lot of times the founder picking the GP it's I think the EQ intelligence and unique perspective this is a service business at the end of the day I know the the Limelight generally speaking is on the Venture Community but Venture is a service business if you're a GP and you have that mindset which I don't think majority have this lens of being in the service business uh really you're you're serving the founder in the lp and uh you're doing all you can to be Scrappy to find Founders and help them and not be an and that sort of thing it sounds like we need to study grit and hard work and create a metric for that in GPS not only Founders moving on to the lp community so we've seen a lot of shifts I've seen data that less than a fourth or fifth of funding is going into merging managers today we're in Q4 2023 what do you see on the Battlegrounds of GP fundraising in the lp Community lot people scratch their head of Y LPS aren't leaning into to N/A emerging managers because if you look at the data the data shows you there's Alpha with emerging managers fund one two and three usually sub $200 million in size the data indicates there's elf there although I do appreciate the the seed that the LPS are in if you want a diligence and really understand all the emerging managers you have to meet all emerging managers and that's tough to do when you're only deploying you know one $5 million checks and your checkbook is $200 $300 million and so you can't meet every Emery manager out there and so I think the challenging part of LP when you're dealing with the space is how do you meet everyone and it's really hard to do unless you're only focusing on emerging managers and there are some LPS that do focus and do well here some of the fun of funds and so I think if you're an LP it makes sense to have someone on the team who is only focused on emerging managers because the time it takes to understand who's networked in who is really going to drive Alpha of the 4500 who are the four or five interesting names it's hard to do that part-time while also deploying Capital into establish VCS establish private Equity firms you know maybe hedge funds you know if you're investing the broader private Equity bucket it's really a Time issue and so I think that's the biggest issue of why there isn't a lot of capital from LPS to emerging managers is the time allocation that's needed to really diagnose what's interesting in addition to that you sort of saw the last couple years just like GPS and a lot of Founders were overextended in terms of capital raised either as a fund or as a startup LPS fell into the same camp where LPS were overextended and made too many Investments and now I need to say hey you know what let's stop take a breather we're not writing more checks we're not adding new managers if we are adding new managers maybe one or two names and we're actually cutting back people and so I think everyone got over extended and now everyone's kind of licking their wounds and that includes the the LPS one of the only consensus N/A things that I've learned interviewing a dozen and probably three or four dozen Offline that didn't go on an interview is that the three-year investment period seems to be the best case for everybody for GPS for LPS for startups and deploying heavily has a significantly increased risk to the fund in the franchise without any incremental real benefit the other thing that I'll I'll note on your fund of fund I've said this uh several times and I'll say it again investing in fund to funds inventure Capital over other asset classes makes a lot of sense there is verifiable Alpha in the space and as you mentioned basic first principles thinking if you have a team of six full-time people trying to meet with every emerging manager and VC or emerging manager is 5% of your portfolio of your three-person family office there's literally a 0% chance that you're able to replicate the amount of hard work and diligence that that team will do yeah I have a lens there during my time at Silicon Valley Bank I spent time and was part of the process of the fund to fund so they have they have a great fund to fund the issue with LPS I get where they're coming from but I think it's a a bad lens is they don't want to pay fees on top of fees right so the the GP has their management fee and then the fund of fund they have to make money too and they have you know operating cost and they're charging a fee as well and so LPS get hung up on this idea fees on fees which again if you do the math like you were saying you can either hire a bunch of people or pay the small fee to get Alpha it makes sense to Outsource it to a fund of fund so I I think this lens that LPS have of not investing in the fun of fund because there's fees on top of fees is a bit ridiculous and very shortsighted because it's just a matter of doing math and the alpha is there the data shows that there's Alpha and emerging managers you're not going to hire a team because it's too expensive to your point and so then you start kind of doing it on your on your own you're kind of doing a half-ass job in terms of the fees I'll go out there I hopefully I don't get shot uh next week but the fee structure for Funda funds seems to be roughly around 5% carry up to a 2 and A2 X and roughly 10% carry after that some with catchup some with not to your point it's very reasonable it's out of the entire amount and the management fees tend to be very little so you are paying in many ways for performance so I'm a big fan of the product I actually invest personally and both of course I invest in 10x but I also invest I tried to find Alpha where I could get allocation to like the very very top and I also sometimes invest the fun of fund as well so I do the combination of that because I do want to get the mean but I also want to get the outperformance we'll see if I get the outperformance uh I'm in year eight so I don't yet know you know if you're a N/A limited partner and you're exploring merging managers and you really want to think about that I'm happy to connect with you one-on-one again feel to reach out to me on Twitter through through DM and happy to connect with with all LPS who are exploring emerging managers I think it's a it's an AET class at least that's category that should get more LP money and the question is how do you do it from a Time allocation and dollar perspective first of all I wanted to say thank you for taking the time thank you for letting me Grill you I'm ask tough questions because I think a lot of people want to know and I believe that transparency over the long term will be very good for the industry maybe there's shortterm inefficiencies that somebody could capitalize on but if we are deploying more money into merging managers into merge managers into startups I think it aligns with everything on the highest level even as a public policy in terms of for you what would you like our listeners to know about you Shai and about brex and anything else you'd like to share going back to Twitter it's been a great medium to meet a lot of individuals so always have be a resource to Founders and GPS and LPS in terms of BRS you know our Focus fast growing startups uh all the way to public companies and so I'm focusing on working with Founders at Inception as soon as they incorporate and are looking for a checking account and kind of the credit cards that's where we uh insert ourselves into the relationships so have to connect with Founders who at the earliest time uh in their process even before incorporation happy to be a resource for for all folks well also link the emerging manager link below that chai keeps up as far as I know it's the most up-to-date public database out there if anybody has more please send them my way as well one thing I'll say about Shai is I actually don't know when we met I think it's 2009 or 2010 I know it's one of those two years we've known each other for 14 years but you are one of the true super connectors you put your money where your mouth is in terms of your career you've been building communities for I assume since the early 2000 before I ever met you so uh really appreciate you being such a resource for the community such a resource for startups GPS LPS uh David I appreciate the comments and uh appreciate you also having me on the podcast today thanks for listening to limited partner podcast if you like this 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