Shardul Shah, Partner at Index Ventures, was one of the first checks into Wiz — the Israeli cybersecurity company Google acquired for $32 billion. It wasn't luck. It was a decade-long relationship with the founders, a willingness to wire money on conviction alone, and a philosophy that treats risk calculus as a fool's errand.In this conversation, Eric sits down with Shardul to unpack how the Wiz deal actually came together, what Google really bought for $32 billion, and why mid-sized acquisitions almost always fail. They get into how Index thinks about doubling down across funds, why Shardul refuses to invest in a founder he's only met over Zoom, and what he saw in the Wiz founders a decade before anyone else was paying attention.They also talk about what's next — the categories Shardul is hunting, the founders he's already betting on, and why he thinks everything that happened with Wiz should stretch every entrepreneur's sense of what's possible.Eric Newcomer covers the inner workings of startups and venture capital. Subscribe for interviews with the people building and funding the next generation of tech.
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Acquisitions to be successful, my view is they should be small
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or they should be large like middle sized.
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Acquisitions are the most difficult for both sides to be
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successful. I have drunk the kool-aid of Wiz
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more than anyone on the planet, right?
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And so to then say I'm going to switch to iced tea is super
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hard, right? What's the way for somebody to
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sort of break into being in your awareness?
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Well, I'm not everyone's cup of tea.
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Am I crazy? Yes, sort of.
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I don't know. When Google announced it was
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buying Wiz for $32 billion, one name quietly became the talk of
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venture capital. Shardul Shaw, partner at Index
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Ventures, was one of the first checks into Wiz.
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And it wasn't luck. It was pattern recognition.
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Shardul has spent nearly 2 decades at Index building a
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reputation for finding the right founders before anyone else
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does. Datadog.
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Duo, Security Coalition. The list speaks for itself.
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Today we get into the Google Wiz deal, his human first approach
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to spotting the next generation of great founders and where he's
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looking for his next big bet. I'm Eric Newcomer, the author of
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Newcomer, the subsect that tracks the inner workings of
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startups and venture capital. Follow me and my team's writing
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at newcomer.co. And without further ado, here is
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my conversation with Shardul, one of the top venture
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capitalists in the Business Today.
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All right, super excited. This is a big week for you.
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I'm here with Shardul Shaw in the Newcomer Podcast.
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Thank you for joining me. Thanks for having me man.
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Did. So we're here, you know, in
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part, I guess it's we should have like, you know, party hats
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and stuff. Google's $32 billion acquisition
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of Wiz, the cyber Israeli cyber security startup.
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Clear, the checks cleared this week.
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Is that right? Yeah, closed on Wednesday.
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Yeah, and index and you are. You're the largest investor
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shareholder, right? Yeah, and so for the party hat,
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I'd prefer a Cerebral Valley cap.
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I mean, we could have been matching at least.
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Yeah, so I guess for for people just paying attention, like
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explain you know why Google is spending all this money to buy
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Wiz in the first place. Yeah, look, the the best
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companies are always bought, not sold, right?
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And, and it starts with the founding team.
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It it's a remarkable run over six years, but it took over 20
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for this to happen. The founders have had so much
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trust. They're such different
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personalities that when they came together to create Wiz,
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they created a culture that could move so fast in a existing
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category and really disrupt the market.
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So I think ultimately what you're acquiring, whether it's a
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small, medium or large acquisition, at the core is a
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group of people and a culture that comes with it.
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One person close to Google, when this announcement first came out
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mentioned to me, it was just like, in a world of AI, cyber
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attacks are going to become even more likely.
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Obviously, we need to be very aware of cyber security.
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In some ways, this deal is a sense that like Google needs to
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be ready if there is like a major massive cyber attack, if
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they need to defend their customers, obviously it's an
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offering that they can provide cloud customers.
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I mean, now, you know, since the steel closed, now we're at war
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with Iran and that's obviously increasing the risk of
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cybersecurity. So like explain, you know, where
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Wiz sits in terms of cyber defense, why and why Google
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would want and what what they're really.
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Delivering the customers, I think you nailed that.
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There's a a cloud tailwind, right?
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More and more workloads are going to the cloud.
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We've been on this transition for over a decade.
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Finally, for example, over the last five years, the pharma
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industry has moved all of their data to the cloud.
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Second, there is a security tailwind, right?
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There's more need to secure against risks for large and
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small businesses across the world and the amount of risk is
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varied. I'll come back to that in a
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second. And then third is AI right to
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everyone knows we live in an AI era and with more AI workloads,
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there is a demand for more security on the back of those 3
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tailwinds. It just so happens with is at
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the center and like that's not by luck, right?
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They've been intentionally crafting their business to be
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there. They started with a platform
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that serve large enterprises from the get go.
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And so it's really complementary with all of the resources and
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the AI infrastructure that Google has.
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So take me back to the beginning.
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I mean you what I think I was reading this was the Claude
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synopsis, so hopefully this is correct.
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But what you they stood you up for 45 minutes, the founder
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before your first meeting or what?
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What were you? What did you see when you first
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when Wiz was first on your radar and why?
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How? It felt like, have have you been
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to an Indian wedding? Not a not a huge Indian wedding.
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I've I've been to a 50% Indian wedding now that I yeah.
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OK, so this story is like 50% true.
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Like irrespective of the size, right, People are fashionably on
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time. Yeah.
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And so my reception of Asaf being a few minutes late was he
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was on time. So Claude's got it wrong and
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turns. Out you were not offended by the
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you, is it? No.
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And and I think a lot of individuals have had a similar
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experience with ASAF, but you know, what started late really
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escalated because in 72 hours we had a term sheet signed ASAF and
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I had this unusual kind of chemistry and click from the
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first moment that we met. I can't really like I can't
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explain it right and you can't like prepare for that.
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All VCs are salespeople. I'm not the best as you know,
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but you can great VC. Definitely at this point with
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Datadog and Wiz, we'll talk about that.
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But you're saying not you don't see yourself as a salesperson?
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Well, I think salespeople can be really prepared, but you can't
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prepare for serendipity, right? And so sometimes you just click
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with someone and it was both professional and personal.
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And we're finding ourselves completing each other's
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sentences. And so that was the first, that
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was the first moment for me. It was on the back of another
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friendship I had with Michael Sholoff.
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Michael was the, at the time, he was the founder of Lacun
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Security. Lacun, is this a pretty deep cut
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into Greek mythology that clearly Claude didn't tell you
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about, but I encourage you to look up afterwards.
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He's this like priest involved in the Trojan Horror Story.
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So Michael, who became a friend of mine, I invested in his
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company. I didn't know anything about
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security. And so he's like, I've got to
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make use of Shardul as a board member.
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So he sent me hunting for customer relationships and help
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building out his management team.
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Again, accidentally, Michael and I became friends after Fanny and
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he had their first kid. I, I was on the I was on the top
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three of of folks who got a phone call right because we
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really cared about each other. And so Michael by pure chance
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introduced me to Asaf and Asaf and I by pure chance clicked.
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Fast forward a decade, Asaf calls me on my birthday and he's
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like, hey, let's go and. It was much time for the deal.
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It was. It was done.
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It was clear like that this was going to be like it's you and
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Sequoia are doing the first round, right?
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Gilly, Doug Leoni. Well, no, Gilly, Doug Leoni and
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I all joined the board at the first round.
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And so when Asaf called, he's like, let's like we're working,
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we're working on a new company, let's go.
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I was like, I'm in. He's like, do you want to hear
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what we're doing? And I was like, it's a detail,
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which is a true story. And a week after we had wired
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the money, we were together in San Francisco, he said, hey,
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sure. We pivoted.
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I was like, OK, great. Like we didn't write a memo
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anyway. Like what, what are we working
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on? And, and and so there was the,
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the only, the only thing to invest in was like belief in the
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founders. And again, we had this the
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benefit of having a front row seat 10 years ago.
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So we knew their character. We knew the lessons they had
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learned within Microsoft after they sold the Adalim.
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And as a consequence, we knew how they were thinking about
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building a a culture and a platform from the gecko.
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How much do you remember? How much money you put in right
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at the beginning? No, I I couldn't give you dates.
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I couldn't give you numbers. It was like us.
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It was like, I imagine it was small relative to the overall
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investment over time. Yeah, exactly it, it was like a
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a standard seed investment. Later that year it was a we we
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led the series. A a few months later, we let Co
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led the next round and then like we kept going and, and so over
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time we broke a lot of rules, right.
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We invested out of four funds, which is the first time we've
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done that in in index's history. First time that many funds or
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across funds? First time that many funds with
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Datadog, for example, we'd also invested across funds with a
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number of. I realize this used to be out of
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vogue and venture, and now everyone's concluded you have to
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double down on your winners to succeed, right?
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I think it's more complicated. So let's see if I, if I break it
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down in the, in the industry, one of the things that's unusual
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about index is we have one team across strategies.
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So like many other large firms, we have a seed fund, a venture
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fund and a growth fund, right? But most other firms have
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specialization, which makes a lot of sense.
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Like, people who think about early stage risk are often
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different than those who think about late stage risk.
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And so for those businesses, often doubling down requires
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like convincing a different group of people, right?
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And they have a different apparatus to make decisions.
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And that's not all bad, right? Because when?
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When? Holds you, it makes you honest.
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It's like somebody else has to review and say, are we doubling
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down on sort? Of a bad investment.
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It's it's like a type of check and balance and it's a type of
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specialization that ought to support like high quality
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judgement calls. So it's a, it's a way of doing
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business doesn't work at index. At index every time we've had a
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silo, it hasn't worked. So we converged, I think in
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2010, we converged our venture and growth teams into a single
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team. So all of us are responsible for
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all of our distinct fund strategies all over the world,
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globally, yeah. Because that's another area
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where firms also divide it up sometimes about.
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Yeah, absolutely. And we can come back to like why
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that's super hard and why we're like unusual in that dimension.
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And it's not for everyone. This is not like a pitch on like
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redesign your venture firm like it's just our culture supports
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one team across GI. Do you have?
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Given that you don't have separate growth investors, does
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that make you more reluctant to do this sort of multi fund so
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within? Within index it it's it's so
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personality driven, right? So for me, in order to develop
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deeper conviction time, I require contacts, right?
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So I spend a lot of time with the management team.
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I really like have a log into the product and I'm testing it
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frequently. I spend time with the go to
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market team. I spend time with the marketing
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team without crossing the boundaries of a board member
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kind of getting involved. And fortunately I'm not an
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operator, so I can't really tell anybody what to do.
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But I can learn a lot from contacts for a company that
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helps because I can make high quality judgement calls on like
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who to recruit, when and how and why, which can change the
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trajectory of businesses. But for index, it gives me more
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context now Second, as a personality, when I'm in the
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sausage making, I see the warts, right?
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And so as optimistic as I am as a natural born venture
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capitalist of a fair amount of skepticism, right?
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And as a consequence, I can get really close to warts.
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And when I see flaws, I really study them.
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So no, it's not easy for me to develop deeper conviction over
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time. It's it's actually really
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challenging right you? Understand what the potential
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risks are of the business. No.
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That's actually not true. I think far more about the
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opportunity in the upside than risk calculus.
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I actually think it's a fool's errand to to, you know, try to
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attempt risk calculus. I think it's overweighted in our
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industry, right? And it's like human nature, it
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make the. Bet you have to see sort of the
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big upsides, but I I thought you were saying by seeing the
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awards, that's that's what gives you this sort of yeah, but.
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When, like when you imagine if, if you start to see blemishes in
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the room and they start attracting your attention, all
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of a sudden it's harder to see beauty, right?
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So it, it can be more difficult and challenging to see the whole
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picture when you're attracted to awards because you want to talk
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about problems to fix them, right?
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So it's hard for me. However, the, the good news
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about index is I don't make any decisions.
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It's it's a true partnership. And as a consequence, at every
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single phase, we're having debates, right?
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We debated the market, we debated the product, we debated
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the quality of the execution and attraction.
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We debated gross margins, we debated strategy.
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We debated so many things. And very few of our investment
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decisions were actually unanimous.
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What does that tell you? It tells you we have a culture
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that promotes dissent because we want to get to the highest
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quality judgement calls. We shouldn't confuse like the
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judgement calls that we serially made with the outcome.
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Like that doesn't mean the judgement calls were right.
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But we went as a group into really high quality judgement
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calls, which unlocks the ability to double down against
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conviction. And you can see there were like
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the some of the best firms on the planet with the best minds
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that took a different view. They were not like wrong.
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They just took a different view. Right was.
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There so you end up in the largest position even though
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there are three investors there Yeah absolutely right so that's
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key So what was the next key decision like was there a
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particular round or when do you think you really like put more
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money in a way that others might have missed or that you're
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you're proud of every single. One right?
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Just like. Continuing.
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Yeah, well. So so the Series A, what's the
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context that maybe I rotated against?
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There were two key customers, one of the two I had introduced
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and the the buyer at that company is a he'll remain
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unnamed, but he's an intellectual snob, right?
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And, and he doesn't do any, do me any favors, right?
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So when he made $1 purchase order decision in four
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weeks and sent me a voice message that sounded like a
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country song, I had distinct asymmetric information.
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And I read into the qualitative of that signal more than the
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quantitative #2. Soon after that company received
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like conventional wisdom, which is like, hey founders, you guys
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have sold some, some customers, right?
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That's great. Now you should hire a couple
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sales people, right to see if we can scale the apparatus of the
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business and right place, right time.
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There's an individual Colin Jones.
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He was previously at Duo Security, a company I had
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happened to invest in many years prior.
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And I knew Colin Jones's mentor Jim Sib and I knew Sib's mentor,
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Zac Urlacher. Urlacher is now a venture
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partner with Index. Sib had joined another one of
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our companies subsequently and I knew both Urlacher and Sib were
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telling CJ don't join a company. Pre product market fit the way
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to define pre product market. If it is $10 million of revenue,
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I was like CJ they are wrong. Asaf was being told hire 2 sales
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people and I was like Asaf that is wrong.
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And so I got involved and CJ joined, right.
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That gave us asymmetric information because we need the
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personalities that unlocked the next round of financing.
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I continue to spend a huge amount of time with, you know,
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Kostick and, and, and AMI Ludwick.
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AMI is this like genius who lives in the future, right?
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And it's so challenging to talk to him because he's, he's like
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always, right? But it's like Socratic and he's
00:16:22
like trying to lead you to truth because he's such a teacher.
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What's what's? His role, What's he do?
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He's ACTO. OK.
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And Kosticka is world class product, right?
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Like top 2-3 product leaders I've ever come across.
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He's able to shape a promise that is current that he will
00:16:43
deliver on. He's also challenging.
00:16:46
And so there's there's constantly tension between the
00:16:49
two. And when I started talking to
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them in depth about what the product road map and what the
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product vision would be, the opportunity that was present for
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Wiz just kept expanding. And so my view of what was
00:17:03
possible for the business continued to grow.
00:17:05
So we had to get more involved and, and like I can keep going
00:17:10
with like individuals like Dolly Rajeek who have been trying to
00:17:13
recruit for a decade when he joined the company, the impact
00:17:17
he made on the business or Fossil Merchant who literally
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had introduced us off 2 years before he joined.
00:17:24
Like I, I knew the inflections of the business, the.
00:17:28
I'm going to stay on Wiz, but I want to digress for one second
00:17:30
for sure. I mean, you're clearly like, I'm
00:17:33
convinced, like a scholar of the people like has this, has this
00:17:36
like a sort of philosophy of really just like analyzing the
00:17:39
team ever LED you like a stray or like, I imagine it's tempting
00:17:43
to be like, these are great people, the numbers.
00:17:46
They don't say what the people should or like what, yeah.
00:17:50
What do you do in sort of other investments where you've have
00:17:52
you found this sort of disconnect between the people
00:17:55
and the money, you know? Where where I've I've been wrong
00:17:59
and I'm most insecure is making judgements of people over Zoom.
00:18:05
I think I have a really hard time finding connection and like
00:18:10
feeling someone over Zoom. And it's reciprocal, I think.
00:18:13
I mean, I think the first time we were on together, it was over
00:18:15
Zoom. This is way more fun, right?
00:18:17
Yeah. Exactly.
00:18:18
You sort of, yeah. And I, I think it's like body
00:18:21
language, it's micro expressions.
00:18:24
I have more comfort with pregnant pauses and like space
00:18:28
in a room. And so it's very interesting
00:18:31
Craddock for me. I have partners who are
00:18:33
phenomenal at like reading people over Zoom.
00:18:36
And so I don't make decisions now like I won't, I won't invest
00:18:40
in a founder over Zoom. An example, Asaf introduced me
00:18:44
to someone. Actually, I met them on Thursday
00:18:46
morning over Zoom. And I was like, guys, you know,
00:18:49
there's something here, but I don't make decisions over Zoom.
00:18:52
And I had some health stuff going on in the family.
00:18:55
So they were like, we're on the next flight.
00:18:58
And I was like, whoa. And they're going through Italy.
00:19:01
I'm like, I could just buy you a better flight.
00:19:02
And they're already in air. And so they land in New York
00:19:06
City. And 6:00 AM on Saturday we start
00:19:10
with a walk around Central Park. We hang out, lunch, you know,
00:19:16
drinks, etcetera. 2:00 AM we finish at Mckittrick Hotel.
00:19:19
Oh my God. I don't know if you've been.
00:19:20
To is that. What?
00:19:21
Isn't that where they used to do the those live shows?
00:19:24
The am I crazy? Yes.
00:19:26
Sort of. I don't know, but you are.
00:19:28
Crazy, but I'm not sure. About this story I'm thinking.
00:19:31
Of sleep no more. But Oh yeah, no.
00:19:32
That's totally that is that is I thought that.
00:19:34
Was called the Mckittrick. Maybe I'm.
00:19:37
Mckittrick hotel became sleep no more that I would not recommend
00:19:42
as like founder dating or like dating in real life.
00:19:44
Don't even talk. It'd be terrible.
00:19:45
Just found new dating dude my. Wife was so creeped out when I
00:19:48
took her there. I mean, for some people it's
00:19:51
like a it's a terrific experience.
00:19:54
Not your not not my scene. Yeah, but it's shut down now.
00:19:57
Kit trick, what I'm referring to, OK, has this incredible,
00:20:00
like Speakeasy bar, OK, where you walk up and they don't have
00:20:03
a menu and you tell them the direction of the drink that you
00:20:06
walk. OK, OK.
00:20:07
And then you walk next door and you you get into this like full
00:20:11
laundromat and you walk through the laundromat to get to the
00:20:16
like basically a mahjong parlor in the back, which has an
00:20:19
incredible mood and ambiance. And you get to see five
00:20:22
different. I think it's about 5 different.
00:20:24
Acts of close up magic through the night.
00:20:27
So I'm a nerd. I love you guys.
00:20:29
Love magic I. Absolutely do this is 1.
00:20:32
Of the things I definitely know about Index, you were like
00:20:34
magicians at parties. I love it at our.
00:20:36
Opening at our office opening in New York, I insisted that we
00:20:40
have a magician from Mckittrick come over.
00:20:43
So we finished the night at 2:00 AM at Mckittrick, my favorite
00:20:48
place perhaps on earth. And we shake hands on working
00:20:52
together, right? The day of the next day, we talk
00:20:56
about numbers, like, what is the deal?
00:20:58
Yeah. The next day, I tell my partners
00:21:00
I've done this right? And I ask for forgiveness, not
00:21:03
permission. And like, I think approximately
00:21:05
2 two weeks later, the company actually incorporates.
00:21:08
And what company is this? It's still in style.
00:21:11
Wow, it's the next one people should be chasing.
00:21:13
If if a founder gets you to be out till 2:00 AM, they're gonna
00:21:16
get your money. They're like, what, what, what
00:21:19
time in the day? You're like, this wouldn't still
00:21:21
be going on. If he's not, he's not ready to
00:21:23
check. Like I I want to learn that from
00:21:26
Olivier A a dated dog. He told me about the concept of
00:21:30
a no battery. Okay, right, So like at the
00:21:32
beginning of the day, your no battery is completely full.
00:21:36
By the end of the day, it's like wiped out.
00:21:38
So the way to get money for me, you try to get.
00:21:40
Information at the end of the day.
00:21:41
Exactly, exactly. Just keep talking.
00:21:43
To me, and eventually I just can't.
00:21:45
I can't hold it. So, so we're, we're sort of
00:21:48
telling the Wiz story. We, we learned the lesson of
00:21:51
like, you know, keep investing and sort of the firm deciding on
00:21:55
conviction. Like I guess another key point
00:21:57
in the company's history, which maybe you fit in as a board
00:22:00
member, I don't actually know, is sort of the will they won't
00:22:03
they with Google and sort of like, oh, do they go public?
00:22:06
Do they sell at a lower price? Like what?
00:22:08
What can you share about sort of that decision and how you
00:22:11
thought about things? Yeah.
00:22:13
You know, at a high level I've been on both sides right on on
00:22:17
supporting Wiz, for example, with acquisitions, supporting
00:22:20
Datadog with acquisitions, supporting Coalition with
00:22:23
acquisitions. And on the other side, 10 plus
00:22:27
companies of mine have been acquired by other businesses,
00:22:30
Duo by Cisco Signal Sciences by Fastly and and and and many
00:22:34
more, right. So I've seen both sides.
00:22:37
I, I think for acquisitions to be successful, my view is they
00:22:42
should be small or they should be large.
00:22:44
Like middle sized acquisitions are the most difficult for both
00:22:48
sides to be successful, right? And I think it's really
00:22:52
important for there to be a shared concept of success,
00:22:56
right. So small, small and large is
00:22:58
kind of the most important zip code to plan mid size.
00:23:02
Just because people don't get excited and they just walk away
00:23:05
or I'm trying to understand, you're asking what are the
00:23:07
common reasons that mid size yields fail or how come?
00:23:12
Yeah. So the most common reasons are
00:23:14
like integration #2 is notation. Enough to the company or
00:23:19
exactly? It's neither here nor there,
00:23:20
right? So it doesn't reserve the does
00:23:23
receive, excuse me, the, the TLC needed to make it successful #2
00:23:28
because it's neither small nor large, the acquired entity
00:23:33
doesn't have the space to make an impact, right?
00:23:36
Those are the two most common failure modes.
00:23:38
And, and so as you can tell, it's more human psychology than
00:23:42
like how does the product fit into the, you know, the, the
00:23:45
strategy. So small and large is #1 #2 I,
00:23:50
I, I learned this from Roy Resnick, who's one of the other
00:23:54
Co founders of, of Wiz a decade ago at Adelum.
00:23:59
One of his mentors is a is who's now passed is Zohar Zisopel.
00:24:05
A, a legend in like the early tech scene of Israel.
00:24:09
And when Adelum had an acquisition offer from
00:24:12
Microsoft, the first question Zohar asked the founders was,
00:24:16
what do you want to do? And I actually think it's a
00:24:19
profound, profoundly important question.
00:24:22
And I do subsequently tell founders what I think.
00:24:27
But the first question is always what do you want to do?
00:24:29
What? I mean, you know, Datadog is
00:24:32
public, you know, that's your one of your other huge
00:24:34
investments. It's I just checked, it's like
00:24:37
44 billion right now or something.
00:24:39
I have to check. Yeah, 4044.
00:24:42
I mean, at some level, yeah. It's, I mean, it's bigger than
00:24:45
the price we're talking about with Wiz, but I assume you make
00:24:48
more money off, I don't know how much you're still letting things
00:24:51
ride with data Datadog, but you know, a clean acquisition, you
00:24:54
get paid in cash as a venture capitalist.
00:24:56
That's a very desirable outcome. Or how do you think about the
00:25:00
advice that VCs give of, you know, go public, go the distance
00:25:03
versus everybody getting paid is, you know, a a great outcome.
00:25:07
Oh. I so I don't think about
00:25:09
optimizing exit like obviously from a fiduciary standpoint, as
00:25:13
a board member, one of your responsibilities is to try to
00:25:16
maximize shareholder value. So you see, you think about
00:25:19
that, but I wouldn't confuse that with the shareholder
00:25:22
interest of in what period of time, how much return do you
00:25:26
generate? I think that's you have to be
00:25:28
used as a founder. You should be really
00:25:30
conscientious if a partner, an investor, a board member that
00:25:36
you involve cannot distinguish the two.
00:25:40
I'm not sure I can, so you have to dumb that down a little bit
00:25:43
for me. What do you say as a board?
00:25:44
Member, I'm responsible for everybody, OK, right.
00:25:47
As a shareholder, I'm responsible for myself, right?
00:25:50
Different OK, So you, you have to be able to acknowledge like
00:25:57
your own interest and what's in in the collective interest.
00:26:01
But it's it's which is speaking to one part of your question,
00:26:06
right. One part of your question is
00:26:07
like, well, for your, for the investor, like it can, it can
00:26:10
look very different. You know, part of I think the
00:26:16
job of an investor board member is to push entrepreneurs past
00:26:21
their limits, right? And remove anything that's in
00:26:26
the way to really experience the fullness of ambition and even
00:26:32
sometimes, you know, kind of bring the goal posts further
00:26:37
apart. And so the same has been true
00:26:40
for for Datadog, right? Like years ago, they actually
00:26:45
years ago we we talked about like a billion in revenue as a
00:26:49
far off milestone. Right now we're talking about
00:26:53
like a completely different level of revenue as a achievable
00:26:58
milestone. So you're constantly kind of
00:27:02
pushing where the company can be, whether it's AM and a or an
00:27:07
IPO is more of like a moment versus a strategic, you know,
00:27:11
direction to push ambition. Does that make?
00:27:13
Sense it does, but they're also, you know, there's subtlety to it
00:27:16
in that. So it's like, OK, you, you're
00:27:19
like a shareholder, you're a board member.
00:27:21
You also, you know, I imagine being an index and like a you're
00:27:25
playing a repeat game. So even as a shareholder with
00:27:28
LP's, you're like, listen, doing great by founders and like
00:27:31
honoring the founder of vision in some ways is also in our like
00:27:34
fiduciary interest. So you have that sort of
00:27:37
complicated calculus. They're like the founders
00:27:41
themselves have like how much more do I want to keep working
00:27:43
on this versus exit? And then they also have the sort
00:27:46
of obligation of like, well, is this so much a better deal?
00:27:49
I mean, it's just is do you try to turn this into like a math
00:27:52
calculus or like how much is it pretty soft?
00:27:55
This sort of oh, how much more is this than I would have
00:27:58
thought first? How much do I want to do it?
00:28:00
You try and turn that into numbers or you just sort of live
00:28:02
in this sort of soft squishy thing it.
00:28:05
It, it does depend on the relationship with each
00:28:07
entrepreneur. So last year, there's one
00:28:11
entrepreneur who's got a terrific business that's growing
00:28:13
super well that was, was attracting acquisition interest.
00:28:18
And I was like, Hey, ask yourself 2 questions.
00:28:20
Like 1. Can you 10X your company and #2
00:28:25
do you have the stamina to do so?
00:28:28
If the answer to both questions is no, you should probably sell,
00:28:32
right? If the answer to the first one
00:28:34
is yes and the second one is no, maybe we think about building,
00:28:38
you know, a succession plan. If the answer to both is yes,
00:28:42
what are we even talking? Stop wasting my time.
00:28:43
Interesting. And those were.
00:28:44
Sincere. It wasn't like, oh, I'm leading
00:28:46
him to what I want. You were like, it depends on
00:28:48
which one. Well.
00:28:50
It can be, it can still be a conversation, right?
00:28:53
Which is like you sort of have a.
00:28:54
Theory, of which it is. The starting point is like,
00:28:57
well, what is again? What do you think?
00:28:59
Like, OK, you think it can be 10X, right?
00:29:03
Like let's talk about that. What what is the plan to like
00:29:05
10X? And I might disagree and say
00:29:07
like, well, I don't think the opportunity is here.
00:29:09
I think it's there or at you're staying at 10X.
00:29:12
That sounds to me like 50X, right?
00:29:15
So it's still a conversation, but the starting point is like
00:29:18
it's AI think it's a sincere and useful framework.
00:29:21
If someone does not see the opportunity, right, then it's
00:29:25
like, OK, we need to like search for the opportunity.
00:29:29
Like it's a again, it's always a conversation in terms of
00:29:32
stamina. It it's so introspective, right?
00:29:35
Like, you know, we, we debate like how much is our job to
00:29:40
listen to and not to put an intention, but how much of our
00:29:43
job is to inspire entrepreneurs? Super interesting question,
00:29:48
right? When someone doesn't have
00:29:50
energy, what do you do right? And I think you have to like see
00:29:56
the whole person. And that's why to me, it's
00:29:58
really important to understand someone's flaws, right?
00:30:01
And and have context and have like a real relationship so that
00:30:05
I can be more objective about. Have you had founders who lost
00:30:09
steam that you were able to resuscitate?
00:30:11
Or it feels like once they've sort of lost the energy, it's
00:30:14
like, OK, we need to change gears.
00:30:17
That's a really interesting question.
00:30:19
I'll have to think about that. OK, Yeah, the.
00:30:22
All right. So I mean people care about this
00:30:26
for a lot of reasons with the money being so large is
00:30:28
obviously a piece of it. What's it like?
00:30:31
So it's $32 billion sale, right? It is cash.
00:30:35
What does that? And is 2.8 billion the number
00:30:39
coming to index? No, I don't think we've talked
00:30:42
about it. I I saw is that the larger
00:30:44
numbers, larger numbers that we're talking about the?
00:30:48
All that money, it goes into a bunch of different bank accounts
00:30:52
or it first goes into like one bank account and then you
00:30:55
disperse it. So yeah. 32 billion gets sent in
00:31:02
a number of a number into a number of different places.
00:31:05
We have, you know, a group of limited partners, largely great
00:31:10
causes, right, that receive distributions.
00:31:15
We have a team including inside of index rather that receives
00:31:22
distribution. So ultimately, there's lots of
00:31:24
so it goes. To like if you're some
00:31:26
foundation isn't limited partner in an index, they get it sort of
00:31:30
directly. You get sort of the carry or
00:31:32
whatever the fund and so it goes.
00:31:35
You're not like routing. It's not like some billions of
00:31:38
billions comes into one pool. You should probably talk to Jan
00:31:43
or Martin about like payment. Infrastructure like money flows
00:31:46
and it's just fascinating that it's like I have an employee
00:31:49
much smaller scale, you know, it's like she just started, she
00:31:52
wired, you know, the 70K. It's just funny, like the actual
00:31:54
money movement when it gets so large, like I have friends in
00:31:58
private equity, you know, they'll send the actual check
00:32:00
and it's like you got to like make sure I think it's.
00:32:03
A really relevant question, but like, I was at I went to
00:32:06
Carbone's last night, OK. And I'm.
00:32:08
I'm with a colleague of mine from San Francisco who had flown
00:32:11
in and we're having dinner with an entrepreneur and I'm.
00:32:14
And it's her first time at Carbone.
00:32:16
I'm like, what do you think? She's like, it's great.
00:32:17
This neighborhood's really cool. And I'm like, I have no idea
00:32:19
what neighborhood we're in. She's like, sure, do it.
00:32:21
We're in Greenwich Village. And I was like, OK, cool.
00:32:24
Where is that? I've lived in New York for the
00:32:26
last four years. Yeah.
00:32:27
I'm explaining this to one of my other partners.
00:32:29
This morning. OK.
00:32:31
And she's like, is this consistent for you, like across
00:32:35
countries and geographies? Like do you know if you're
00:32:38
flying out of JFK, Newark or LaGuardia?
00:32:41
I'm like, I don't like I just take the Uber and I get to the
00:32:45
airport and I find my gate like it.
00:32:48
It drives Jan crazy because he's maniacal about knowing like
00:32:52
every single flight alternative and uses FlightAware to like
00:32:55
pinpoint which flight is his on the way to the airport.
00:32:58
But the logistics? I I live in your world as well,
00:33:02
or I'm not proud of this. I'm like geographically inept,
00:33:06
but I think it speaks to like sometimes like logistics and
00:33:09
movements are are are just not very interesting to me.
00:33:12
And and so similarly like how the money flows.
00:33:14
Like we got a great team that, you know, watches and and makes
00:33:18
sure it's appropriately handled and I trust them.
00:33:21
But did you? I've been to.
00:33:24
I went to Carbone one time. We went too late at night and,
00:33:29
you know, it's so it's hard to get into.
00:33:30
So then I was like, all right, like we got to really make the
00:33:32
most of it. We way over ordered.
00:33:34
We treated I Lilia is probably my favorite restaurant.
00:33:37
Have you ever been to Lilia? And like, that's like small
00:33:39
place of town. So we ordered Carbone as if it
00:33:42
was Lilia. So we had like, my wife and I
00:33:43
had way too much food at the end of the night.
00:33:45
We had like, espresso martinis. I literally thought I was gonna
00:33:49
like have a heart attack over that meal.
00:33:51
It was like the IT was just like the most.
00:33:53
It was, you know, yeah, gluttony to the point of real like
00:33:56
suffering over. Yeah.
00:33:58
Did you? But do you?
00:33:59
Do you like Carbone? Do you like I love the spicy?
00:34:01
Rigatoni yeah it's A and the dessert, like the the the way
00:34:05
they demonstrated right is is hard to resist that was the.
00:34:09
Other element, it was my birthday and they didn't bring
00:34:12
the first dessert with a candle and so then my wife was like,
00:34:15
oh, it's his birthday. Anyway, yeah.
00:34:19
Are you celebrating a lot or was your birthday September 7th?
00:34:22
Yeah, noted the candle's. Coming your way.
00:34:28
What is it? Can you say?
00:34:30
How do you stay motivated after like such a huge exit?
00:34:34
It's all. About the next relationship, OK,
00:34:37
We don't think in terms of deals by the way, right.
00:34:39
Like I think most of the industry is geared around deals.
00:34:43
They talk about like the number of deals, the amount per deal,
00:34:46
like they talk about chasing the next deal.
00:34:50
We think in terms of relationship that the next
00:34:53
relationship that we build depth in is the most important
00:34:57
relationship. And that will lead to accessing,
00:35:01
assessing, winning, supporting and exiting great investments
00:35:05
that generate terrific returns for LP's.
00:35:08
But what's motivating is like it's all about the people,
00:35:11
right? And so I just go back to the
00:35:14
this impossible art of, you know, studying, you know, people
00:35:19
like human beings. I'm less of a sociologist and
00:35:21
anthropologist than like a psychologist.
00:35:24
Yeah. But it's like there's nothing
00:35:26
better. It's it's the most fun.
00:35:27
How did I have? If I'm a start up founder, how
00:35:31
do I sort of get on your mind or like how do I sort of start this
00:35:34
relationship where like it needs to be?
00:35:37
I was at a company that you respect through somebody you
00:35:39
know, or like what's what's the way for somebody to sort of
00:35:42
break into being in your awareness?
00:35:45
Well. I'm not everyone's cup of tea,
00:35:47
right? So it it should not be
00:35:49
everyone's mission statement to like get into my awareness.
00:35:53
The fastest path right is through a warm introduction
00:35:57
right, right. Think I don't know how you met
00:35:58
your wife but like we went to. College together.
00:36:01
Yeah. I I.
00:36:01
Went to high school together with my wife.
00:36:04
I took her to homecoming. And so, you know, it just so
00:36:07
happened we had the same last name, not because we're second
00:36:09
cousins or anything, but you know, we, we had lockers next to
00:36:12
each other. So we knew each other for our
00:36:13
lifetime. But when a friend introduces a
00:36:16
friend, you, you just have many more priors.
00:36:19
You likely you're more likely to have shared values and alignment
00:36:23
around a range of different opportunities in the world.
00:36:26
And and so there's it's easier, I think, to find connection,
00:36:29
right, going back to how Michael connected me with this off.
00:36:32
And so it's it's not for me in terms of like being efficient,
00:36:36
right? Cold e-mail me cold LinkedIn me
00:36:38
like I, I like I'm on it. But a warm introduction is, is
00:36:44
the most efficient path. And, and it, it's, it's usually
00:36:47
also the best way for someone to figure out if they even want to
00:36:50
spend time with me. Like, you know, again, most
00:36:53
venture capitalists are terrific salespeople.
00:36:56
The the best thing an entrepreneur can do is
00:36:59
reference, right? So go talk to entrepreneurs that
00:37:03
I've worked with, Like hear, hear what like.
00:37:06
What their side of the story is and then decide like, do you
00:37:09
actually want an introduction to me or or to anyone else totally
00:37:13
changing gears. What, what categories are you
00:37:16
hunting for now? Like you've sold a cybersecurity
00:37:19
startup. Does that mean, oh, I'm free, I
00:37:20
can do the category again, like reinvent it?
00:37:23
Like what? What are you chasing right?
00:37:25
Like in terms of themes, like what?
00:37:27
Are you really looking for it? Yeah, I'll try to.
00:37:29
Parse it into two dimensions. One, obviously we're in the AI
00:37:35
era and everything is related to AI and so I think it's a really
00:37:40
relevant question to think about what categories are interesting.
00:37:43
I'm not a top down thinker. Like it's just not my skill set.
00:37:47
I'm a bottoms up person like and as a consequence, I start with
00:37:51
the people when I met June at simile, right, which is aiming
00:37:56
to simulate. Yeah, you wrote about so like
00:37:59
he's he's got the imagination to simulate the entire planet, yet
00:38:03
he's so focused on delivering value to fortune one hundreds
00:38:06
like in the second sentence and he's talking me through like
00:38:09
Pocs and MO us and different terms like that contradiction in
00:38:14
June was so compelling and then it got like there's so much
00:38:21
depth to the portrait when I learned more about him as a
00:38:25
studio artist, but also his Co founders, Percy and and Michael.
00:38:29
And then I learned even more when I spent a significant
00:38:33
amount of time with Lanie and then he pulled in Mihika, who
00:38:35
we've known for years. And so like the enrichment of my
00:38:40
enthusiasm or on simile starts with the people.
00:38:43
And it just so happens I think it's going to dominate a
00:38:45
category because they have moral authority When when I invested
00:38:49
in Parag at parallel. I don't know if you've had a
00:38:52
conversation with him yet. Yeah, yeah.
00:38:54
He announced one of his stations on stage right, But I.
00:38:57
Wasn't sure if you guys were like one-on-one.
00:38:59
Yet actually I think yes, at a dinner.
00:39:01
I've no, I don't know. We haven't like hung out, but
00:39:03
I've spent time with him so. Prague's amazing.
00:39:06
I love him. When we invested like first we
00:39:11
went on a walk, right? And it was supposed to be 45
00:39:13
minutes instead. Instead it was like an hour and
00:39:15
a half, two hours. And I was like, I don't know
00:39:17
what's going on, but we just like clicked.
00:39:21
I asked him like, how do you learn?
00:39:23
And he's like through adversarial conversation.
00:39:26
And I was like, I can do that. And so we've, we've had a
00:39:30
phenomenal relationship, but leading up to our investment, I
00:39:35
did a lot of references. I, I, I hadn't known him as
00:39:37
like, you know, beyond the, the celebrity of like CTO of
00:39:40
Twitter, CTO of Twitter, like I, I didn't know the human being.
00:39:43
And so I did a huge amount of like referencing, including
00:39:46
talking to his wife when I wrote the memo internally.
00:39:50
There's nothing about his business because he didn't even
00:39:53
know what he was going to work on.
00:39:55
So it's just like 5 pages about notes on Prague full conviction.
00:39:59
We invest together with Vinod and and and Josh in the first
00:40:03
round and and then I, I, Josh a couple minutes ago at.
00:40:08
First round, OK. In the first.
00:40:10
Round at first round, yes. It's a commercial for Josh.
00:40:14
I do. I'm a big fan of both.
00:40:15
But after we invest the wires in the bank, I I ask Prague, I'm
00:40:20
like, hey, like, why'd you let me in?
00:40:23
Like we've known each other for six months.
00:40:26
You've had relationships for a decade, right?
00:40:28
So like, how did I receive this honor?
00:40:31
And he's like, sure, duel, like you made it so painful.
00:40:34
And he's like, if you take an easy decision this seriously, I
00:40:38
want you on my side. We subsequently Co led the
00:40:43
Series A with Mamoon and now he's working on web search for
00:40:47
AI agents right. And as the world has become
00:40:51
agent 1st and agentic web search is such a natural requirement
00:40:56
for the best companies in the world.
00:40:58
And so the company has taken off.
00:41:00
But sincerely, it wasn't a category.
00:41:03
It wasn't like a story. I'm.
00:41:05
Following the people. I'm not chasing categories.
00:41:07
Yeah, I don't know. How now the inverse, the second
00:41:10
part of your question, which is like, are you going to do
00:41:11
something else in cloud security?
00:41:13
You know, it's something I, I, I worry about like I've, I've had
00:41:17
so much, I've had such a front row seat that what I think is
00:41:22
the market leading company in cloud security that I'm actually
00:41:25
riddled with bias. So I'm not sure I can be
00:41:29
objective in taking a view on who can.
00:41:35
Now you're like too much of the expert.
00:41:37
You're like, I'm used to trusting that the founder is the
00:41:39
expert. Now you've developed expert.
00:41:41
It's not, it's not expertise, it's bias.
00:41:44
OK, Like I have drunk the kool-aid of Wiz more than anyone
00:41:49
on the planet, right? And so to then say I'm gonna
00:41:52
switch to iced tea is super hard, right?
00:41:55
So the beauty of Index again is we it's a partnership model
00:41:59
right there, super talented investors like Johanvi, who's
00:42:03
also focused on security that can compliment me, right?
00:42:07
And so is there more opportunity in and around cloud security?
00:42:11
Maybe, right. Am I going to be the biggest
00:42:14
bull on competing against Wiz? Absolutely not.
00:42:18
What? Yeah.
00:42:18
What did what did you want index to be?
00:42:22
I don't know in 20 years or like what's we're, we're in such an
00:42:25
odd time in venture. You know, the mega firms like
00:42:28
keep getting bigger. Like there are firms clearly
00:42:31
pursuing sort of AUM and and dollars that they're managing.
00:42:36
Like how do you think about sort of that trend and how much is
00:42:39
index chasing sort of scale of capital and like how do you
00:42:42
really want to distinguish the firm over the next couple
00:42:46
decades? So the.
00:42:47
The core of index is. It's like a machine, right?
00:42:54
We create a culture that can recruit, nurture and develop
00:43:03
great people, meaning investors, right?
00:43:06
And strategists like we can do that with our team.
00:43:09
The consequence is we can attract and nurture and develop
00:43:14
greatness in entrepreneurs. I want to make that machine more
00:43:21
and more effective and outlive me.
00:43:24
That's the most important thing Now, the consequence, I believe,
00:43:29
of raising more and more capital.
00:43:31
It's it's like supply, demand. I'm, I'm a youth Chicago
00:43:34
economist. Like, I get it, right, public
00:43:37
market investors can't access private market companies, right?
00:43:41
You've written about this and therefore the Russell 2000 is
00:43:43
now these private companies. And to get access to that, you
00:43:47
can, you know, invest in, in, in mega funds.
00:43:49
That's part of the the like. Thrive.
00:43:51
I mean, with the rumors, they're like telling on a Brewer, stay
00:43:53
private. Like we we'll just keep doing
00:43:56
rounds. You know, there's like, almost
00:43:57
even even the investors who might want to see an exit seem
00:44:00
to be encouraging founders to say private in certain ways.
00:44:04
Yeah, I don't know. Yeah, that's.
00:44:06
Interesting, but that's. Interesting.
00:44:08
It, it, we can talk about that, but there's a, there's a place
00:44:13
in the world for that, right? And I totally have respect for
00:44:16
individuals who see their business model as like AUM
00:44:20
collection, right? Like respect and and there's an
00:44:23
opportunity and you should go chase that.
00:44:24
I think for us to succeed in attracting, developing and
00:44:29
building greatness. It's about the craft, right?
00:44:33
It's about a the focus on the individuals internally and the
00:44:37
entrepreneurs that we recruit. And so not scaling it is is kind
00:44:41
of the point. But it what what is the fund
00:44:48
size right now or we have like? A few 100 million seed fund, a
00:44:52
billion dollar venture fund, $2 billion growth fund.
00:44:54
So we're like large enough to be really relevant across multiple
00:44:58
stages to some of the best companies in the world, right?
00:45:01
But I think focus, sufficiently focus to attend to the craft.
00:45:06
Have you? Do you do SP VS on top of it or?
00:45:09
I have not I I'm not a fan of SP VS personally.
00:45:14
It's like it's confusing to me, you know?
00:45:17
Like is it my main business or not is how I think about it.
00:45:20
If yes, then like I have high conviction.
00:45:23
I want to invest, set up my main funds.
00:45:27
The SPV is like, well, I've gotten access, right.
00:45:30
Should I monetize it right and make some economics off of it
00:45:33
that that's like how it feels? And so it's like it's it's
00:45:37
satisfying, like, and I don't mean this pejoratively, but it
00:45:41
like it satisfies the greed in me, right, right, more than the
00:45:44
artist in me, right. So I'm in service of the artist,
00:45:46
right? I think that might, yeah.
00:45:51
I think that's one of the challenges covering venture
00:45:53
capital overall. It's like sometimes it's like
00:45:55
it's a money game. On some level.
00:45:57
You're like, oh, shouldn't you be optimizing for the money?
00:46:00
But then there is sort of this aspiration of like, oh, there's,
00:46:03
there's still an art to it. And like that's sort of like the
00:46:06
crass way to make money. But there's an argument some of
00:46:09
these firms, I mean, I don't think it's.
00:46:10
Crass. OK, I I mean, I, I don't think
00:46:12
it's crass at all. OK, I, I, I'm just saying it's
00:46:16
my, it's my personal style and preference, right?
00:46:19
Like if you want to raise SPVS, like God bless, it's totally
00:46:23
cool with me, but there's a limit.
00:46:24
To how much you'd put of a single company in a fund, right?
00:46:28
I mean, at some point, you know, that's.
00:46:29
A it's a really important question and it's still
00:46:32
something I'm trying to develop skill in, right?
00:46:33
This is the question is like asset allocation.
00:46:36
So how much do you concentrate within a given fund?
00:46:39
And, and I've talked to a lot of different folks from Thrive and
00:46:42
Lightspeed and Sequoia, like a bunch of my friends about this
00:46:46
concept of, of how much to concentrate.
00:46:51
I, I, I actually like, I'm still developing that skill, you guys.
00:46:55
Have sidestep the big foundation model companies, is that right?
00:46:59
Or sidesteps? Maybe not the word yeah.
00:47:00
Sidesteps not the not the right word.
00:47:04
We've definitely participated in labs and like Foundation labs
00:47:08
and Neolabs, but we aren't playing statistics with like put
00:47:14
a small or large amount of money into every, you know, team that
00:47:18
comes out of Anthropic or open AI or other maybe labs.
00:47:22
I mean just. So we sidestep, I mean, I guess
00:47:24
portfolio theory. Yeah, I mean, there's a lot, you
00:47:26
know, like Lightspeed, I mean a huge percentage of their fund I
00:47:30
think isn't anthropic now really.
00:47:32
And a lot of their. Yeah.
00:47:33
So you just made me think of that with this sort of
00:47:36
anthropic. Also, you know, in terms of this
00:47:38
SPV conversation, I understand there are firms where they got
00:47:42
in early like, and you don't have to weigh in all this, but I
00:47:45
think like, you know, like Spark I think got in, in my senses.
00:47:47
They didn't necessarily use the allocation in every way they
00:47:50
could have. And then you have other firms, I
00:47:52
think like Menlo, where they're fairly aggressive and like
00:47:55
having access and doing SPVS. And so that venture capital has
00:47:59
just become in some ways like a different business in that like,
00:48:02
yeah, that because there's so much growth investing happening
00:48:06
adjacent to to venture capital. There are no sacred cows, right?
00:48:11
So maybe I revisit the concept of SP VS in a in a couple years
00:48:15
when I'm exposed to like the next Anthropic, I don't have
00:48:19
enough money. Usually what I do when I go to
00:48:21
my partners and I'm like Max conviction, I'm like, tell me
00:48:24
the maximum amount of dollars we can invest in this company,
00:48:27
double that. That's what I want to do.
00:48:29
And they're like. The do you guys, does everyone
00:48:35
in index have to or what's the level of agreement that you need
00:48:38
across the firm to do a deal we're?
00:48:40
Consensus oriented, OK. So like just majority or yeah,
00:48:44
it's like a it's. A little bit so we can vote one
00:48:47
through 10. You can't vote 5 or 6 if it
00:48:49
passes a certain threshold. The answer is yes.
00:48:51
So if someone were like it's a one right that that makes like
00:48:56
the calculus a little bit more challenging.
00:48:58
Largely it's consensus which largely follows like simple
00:49:02
majority. Can you?
00:49:03
Revote or it's like it's one vote and then it's over.
00:49:06
Great question. We do do revotes.
00:49:09
I recently studied and I don't think we're that great at
00:49:11
revoting Interesting. I think what no matter I don't
00:49:15
know why it is, but our first impressions are pretty are
00:49:18
pretty good like the. Revote, I imagine is like the
00:49:20
partner who likes the deal, like is like, how do I get more
00:49:23
people around this? And no, it's not.
00:49:25
Politicking. It's like, hey, the discussion
00:49:27
we had was based on a set of inputs and two things happened.
00:49:33
1 is like I studied and I think the inputs are slightly
00:49:38
different or we are significantly different and so
00:49:41
we should revote with a different set of inputs, right?
00:49:46
The, the second is, Hey, this is how you interpreted the input,
00:49:52
like partner XYZ, like I want to talk to you about that.
00:49:56
And two things can happen. 1 is like, oh, I hear you now.
00:49:59
And I, you know what, like, I think that's totally right in
00:50:02
terms of this judgement call, like not going to revote, not
00:50:04
going to move it forward. Sometimes in that conversation,
00:50:08
it's, it's a discussion and the person's like, oh, I didn't see
00:50:11
that point of view. Like we, we didn't have that
00:50:15
discussion in the investment committee.
00:50:18
And as a consequence, I want to change my view because now I, I
00:50:21
misunderstood. So we have that like ambiguity
00:50:25
of like conversation. We have a culture that again
00:50:29
supports like dissent, right? And you can only have dissent
00:50:33
and ambiguity when there's a lot of conversation.
00:50:35
Going back to one of the points you made, like one of the
00:50:37
reasons I think most firms have not been successful across
00:50:41
geographies is it requires communication, right?
00:50:45
And and our business is so trust based that you have to
00:50:49
constantly communicate For many people in our industry,
00:50:52
communication feels like a tax. Communication feels like a tax.
00:50:56
You should not join index because we communicate a lot and
00:51:00
we like each other. So it's fun.
00:51:01
But that that supports like dissent and ambiguity and
00:51:04
conversation. I still think though, like
00:51:07
despite those re votes based on like good intent and more
00:51:11
inputs, the first time we vote we're usually right, right?
00:51:14
The I got asked on my last podcast episode by Barry McArdle
00:51:19
at Hex whether I thought the best venture capitalists like,
00:51:24
you know, roughly put, were like obvious at the time or not.
00:51:27
And I'm curious what you obviously know this much better
00:51:29
than I do. Like, I mean, you you look at
00:51:32
Wiz. I mean, it's like you guys, you
00:51:34
know, you're more storied now in the rearview mirror, but like
00:51:37
it's a good set of investors from the beginning.
00:51:39
Like how much do you think your best?
00:51:41
And Prague obviously was already sort of like Twitter famous when
00:51:46
you did that investment. Like how much do you think your
00:51:48
best deals? It's like those were like, it
00:51:50
wasn't clear maybe the price, but they were obviously like
00:51:53
strong deals at the time. Or there are ones where you're
00:51:56
like, people didn't see it. And what's your philosophy on
00:51:59
the sense of like the hot deal? I don't think there's anything
00:52:03
that's obvious to. I'll give you just two examples
00:52:07
of evidence. Right.
00:52:08
Like thank God 20 plus firms passed on Datadog before I
00:52:12
called out the Series A like right?
00:52:16
Not obvious Wiz. There's one investor who
00:52:22
increased ownership at every single opportunity, obviously.
00:52:26
I'm not saying there's no skill, like no, I'm just saying.
00:52:29
If it were obvious, everyone would have behaved in the same
00:52:32
way, right? And everyone didn't.
00:52:34
And again, I'm not confusing those judgement calls with being
00:52:37
right. Let's not.
00:52:40
Let's like there's confidence and humility.
00:52:42
We can both and not crossover to Eric, so if it were obvious, the
00:52:48
counterfactuals would be different, right?
00:52:51
The and I I assume they're all there's plenty of.
00:52:53
Deals where it's like I'm not an investor in HECS, right?
00:52:57
So maybe that one's obvious. Like I, you know, I've never
00:53:01
met. Right, yeah.
00:53:02
And there are lots of deals that are hot.
00:53:04
You have to pick like, you know, which like hot deal also, you
00:53:07
know, pans out because they're a lot, you know, I I feel like
00:53:10
covering venture capital. I mean, this is a consumer, but
00:53:12
far from it. But like I broke the seed in
00:53:15
Series A of B real. There was also like hop in those
00:53:18
were both deals where it's like those could sort of like, you
00:53:21
know, they were sort of like, you know, strong signal.
00:53:23
You got it at the time and then it doesn't last.
00:53:26
And so, yeah, the the sense of like a hot deal doesn't always,
00:53:30
you know, obviously live the test.
00:53:32
Yeah. You, you know, look, one of one
00:53:34
of our, I think we've talked about it before.
00:53:37
We've talked about like sins of omission, right?
00:53:40
And one of the sins of omission is don't argue with traction,
00:53:45
right? Another way of saying that is
00:53:47
like, when there's momentum, like there's there's a higher
00:53:50
probability that the company might be successful.
00:53:53
And so that expressed in investing is this potentially
00:53:57
like deal heat hot deal like FOMO thing I feel like?
00:54:02
Sometimes there are stories that I should write that they almost
00:54:05
feel like too straightforward. You know, it's like, oh, that if
00:54:08
I did that story, it's just like, Oh yeah, that'd be, it'd
00:54:10
be easy. You know where it's like.
00:54:11
Just mixing it up but like. In some ways it is the same sort
00:54:15
of thing. It's like, no, I need to do the
00:54:16
hard story that sort of like, you know, causes turmoil.
00:54:19
Like I really. Yeah, anyway, but sometimes.
00:54:22
Yeah, like having a point of view can still be differentiated
00:54:25
when there's a common understanding, right?
00:54:27
And so you can still express the significant returns right into a
00:54:32
terrific company, even if there's a consensus view.
00:54:34
So that that's where I'm, I'm being a little flip, but I'm
00:54:38
trying to become more precise and not so binary in terms of
00:54:43
like, oh, every, everybody sees it, right.
00:54:45
Last question for entrepreneurs like what do you think they
00:54:48
should learn from the Wiz journey?
00:54:51
Oh, I. Think imagination is stretched
00:54:53
now, right? Like more is possible in a
00:54:56
shorter period of time from anywhere in the world.
00:54:59
You can approach large enterprises and deliver value
00:55:02
in, in unforeseen moments. Like I, I, I think that not just
00:55:08
in Israel, right, like globally, we're going to see more ambition
00:55:12
on entrepreneurs. You're seeing from new countries
00:55:14
or just like? Any entrepreneur who studies Wiz
00:55:19
will know that more is possible today than was five years ago.
00:55:23
Great. Sure.
00:55:23
Duel, thank you for coming on the Newcomer podcast.
00:55:26
It's so fun. Thank you.
00:55:27
Thanks man. That's our episode.
00:55:29
Thanks, Chardul Shaw for coming on the show.
00:55:31
I'm Eric Newcomer. You can follow my writing and my
00:55:33
teams writing at newcomer.co. Please like, comment, subscribe.
00:55:38
Excited to be a YouTube hustler now, so, you know, give us your
00:55:42
comments, ask me, you know, whatever it is.
00:55:44
Tell us guest suggestions if you're hungry for more podcasts.
00:55:48
I'm also one of the Co hosts of the Through Valley show with my
00:55:51
friends Max and James. Otherwise, see you in this feed
00:55:55
in a couple days. Fine.
00:55:56
Probably in a week. We're publishing.
00:55:58
Yeah. How's the cup?
00:55:59
All right. Thanks so much.