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🦄 Bryce Roberts. Indie.vc - Playing the game of life.

Rad Dad, hosted by Kirill Zubovsky podcast.

October 09

Bryce is the founder of Indie.vc, an investment fund focused on revenue over crazy growth. Fueled by his own desire to do things differently, Bryce lives in Salt Lake City, works from home, and while working hard also finds the time to be a hands-on dad, while living life to the fullest.

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Hello, everyone. And welcome to the ride that podcast show where I interview successful parents and we talk about their work, their life, have to manage your family while working in a high stress environment. Today, my guest on the show is Bryce Roberts. Bryce is an investor who's been doing this for almost 20 years. But unlike typical venture capitalists, you might think of he doesn't live in Sand Hill Road. He doesn't only invest in San Francisco. Instead, he lives in Salt Lake City with his five kids. He goes skiing and hiking a lot. He works from his home. He has a totally different idea off. What kind of startup peoples to fund If you haven't had the opportunity to get togethers Bryce and talk about his life and start ups.

This is your chance. But first, a quick word from our sponsor. My name is Rebecca level. I'm part of the small but mighty team behind Create 33 which is a new entrepreneurs center and the heart of Seattle. We looked around this community, and as incredible as the innovation economy is, most startups fall off of a resource cliff after they raised that first critical round of seed funding. We're here to fill that gap, and we have created a beautiful space, that 22,000 square foot facility. But beyond that, beyond the deaths and the incredible conference rooms, we deliver a set of targeted programs for high growth technology startups who are focusing on what's most important hiring people, creating revenues and achieving that next round of institutional capital. So we have highly targeted programs,

focus on that community, and the people here are at different points on the same journey of building the world's next great business. So in addition to the programming and all the amenities of the facilities, the community itself is a huge value. Add, we've created this really high concentration of smart people, hard working teams, building companies, and the conversations that happen around the coffee machine are a significant part of our secret sauce. Thanks for hosting the event. Here, create 33. There you have it. Create the three dots. CEO is a new interpreted old space in Seattle with a kick ass for you. I suggest you go in there upside and check it out. And now let's talk to Bryce. Tell me briefly about in DC, but talk to me like I've never heard of venture capital. You know,

2:25

uh, Venture capital is a form of money where people give you something and you don't have to give them anything back. Is it really true, though, is it? The expectation is that you're going to give them a lot back. But you're selling something that is equity you a piece of your company that you don't really know what it's worth yet. Your hope is that in selling them a piece of that, that piece becomes more and more valuable for everybody that your chances of success are higher because you've sold that or brought those investors in help you grow your business. The the risk in venture capital is you end up like any good thing in your life. It's very hard for companies to have moderation with something that is good for you, whether they like. And so you know, when you get that initial hit of investment, you kind of always need and want Maura and the kind of business model of and community around venture capital tends to drive you to requiring more and more and selling more and more of your company because you want to grow faster and faster investments. So I think there's been a lot of people recently writing about the toxicity of Intercapital. How challenging convey be breaking in the addiction to it.

You know what we want to do is introduce a different kind of investment that has a more moderation in all things kind of approach. We want people to you. We know that it takes capital of fund of business, but we are hoping that rather than get you hooked on that kind of steady drip of outside capital from investors, we can help you generate your own investment through revenue and profits on Dhe. Then, you know, like any junkie, it's hard to make clearheaded decisions about your future. We want people to be able to be clear headed and not have to make any decision that would negatively impact them where they feel like they have to make. We want to put them in a position where they can make those kind of decisions independent of all the other forces that are work on their business.

4:37

That's the idea. That's a pretty good idea, especially if you've been through a lot of the VC world. It makes a lot of sense with basically 99.9% of companies and people. And I think,

4:49

but I think that's hard. I don't know that our start up culture would would absolutely challenge that as a premise that I think more people are trying to figure out a shoehorn into venture capital than trying to figure out how to make alternative forms of venture capital that work for them. And so, you know, in DC was our attempt to say OK, rather than try to twist and contort and convince yourself and everybody else that you're going to be a $1,000,000,000 business and that you need to be on the same kind of path and for both funding and growth is a lot of the headlines you read in tech. A lot of people just need a different way to think about in scale their business. It doesn't mean you're limiting your upside. It doesn't mean you're going to have a smaller outcome or impact. What it means is that that you know we're off to be referred to it like a blitz scaling model of the venture tends to, um, that's what they're. That model is kind of based on this is just giving people an opportunity to shape venture that works for them, not just shaped themselves to work the way venture is supposed

5:57

to work, right? So we're not talking about lifestyle businesses like it's not about opening up a shop. It's about actually running a business. It could be $100 million business is just gonna be run on different terms. Traditional.

6:8

It's one of those things where I live in Salt Lake City, Utah. Salt Lake is kind of an up and coming market for startups. And if you look at it, Salt Lake's 2018 We had a couple really big kind of seminal events from a startup standpoint. One was a company called pleural. Site went public, and one was a business called Qala Tricks that got bought by S a P for a $1,000,000,000. The interesting thing to me in both of those companies was each of those bootstrap for their 1st 4 to 6 years, when quality X rays their first round of financing, they were throwing off for 40 million in cash a year when the portal site raised. They were throwing off millions in cash. They were in a hugely leverage position. They could get exactly the deal that they wanted. And if you talk to each of those founders, the thing that allowed those companies to scale at the rate that they scaled wasn't any info. Want any infusion of venture capital?

It was all of that foundation that was laid through having to be profitable, having to have a real business, reinvesting those profits into the company, not relying on investors that really cemented that foundation for them to scale from. And what we're really trying to do within the VC is create a framework, a playbook in a community that really focuses on getting those fundamentals right early on. And then you can think could do whatever you want with your business. You want to go raise money? Fine. At least you know how to make money instead of just spending money all the time. If you want to go raise money, you can do it on terms that you're gonna be happy with. You can pick your partner. You're not gonna be going hat in hand because you absolutely have to ask investors for permission to exist, right? So I think you know ours is not to say,

like, let's find Maur and support more lifestyle businesses. Ours is saying, like, how many more quality tricks get hubs? You know, Microsoft's plural sites How many more of those could exist and reach that kind of scale if they didn't jump on that treadmill as early, and if they had an alternative route to consider, how many more of those types of businesses could we see? Our hope is that NBC can unlock more of those because we think there are hundreds thousands of those kinds of businesses that just need a different, different playbook from what Silicon Valley

8:34

runs right. Sounds like you're really onto something and let's let's table this for a second and talk about the success of it in the VC in a minute. But do something different requires a different type of person, and you certainly don't live in Silicon Valley. You do things differently, I read, and you buy that you own more bikes, cars and more on. That's really cool, right? Is that still the case? It's Yes, yeah, I think that is still the case do you still have five Children? Last I checked as I mean, that's pretty amazing. So tell me a little bit like,

how did you get started? And, you know, maybe not even like 20 years ago. Did you grow up in Utah? What was the deal? So

9:13
How did Bryce Roberts end up in Utah?

Bryce grew up in Portland, Oregon and loved it there. However, after doing one year at a college in Idaho and dropping out, he took a few years off to go on a Mission, and upon returning to Utah afterwards, he decided to stay.



I grew actually grew up in Portland, Oregon, you born and Bred Oregonian, and for I went to school at a small school in Idaho for my freshman year of college. I totally flailed. I was terrible student, no direction. It's after a year. I dropped out and I took a couple of years off to go. D'oh! Given that I'm from Utah, I am a member of that, You know the faith in Utah of the Church of Jesus Christ. And so we took one of their two year missions. I did. I did one of those in North Carolina, and then when I came home,

I came back and went to school in Utah as well, and um, had no intention to stay there. Loved Oregon, wanted to come back to Oregon, but Utah's really it's an interesting place, both geographically but also culturally. I think there's a lot of change that's happening there and we just got really, um we got lucky and having a bunch of opportunities and start ups and things that I wanted to do in Utah. But then we also had Utah's kind of having a moment in terms of the generational shift in the demographic shift that's happening, and that's really exciting to us. And so we wanted to be a part of that, and if we could help instigate it, we wanted to do that. So that's that's where we've ended up is Salt Lake City. We actually did a two year stint in the Bay Area,

so we did. Wave, sold our house in Salt Lake and we moved Thio to San Francisco and we lasted two years and that was plenty for us. Like you said, You know, I like doing things a little bit differently, and that was That was definitely like a I found myself is a square peg in a round hole in the area.

11:10

But you moved to the area because that's where

11:13

that's where our office was. So I was commuting back and forth to San Francisco from Salt Lake. I was going to days a week for five years, and you can imagine with a young family that starts to take its toll. And so you know, the idea was one. Bayer is a great place to work. It's where Venture happens. Let's go out there and kind of play in the big leagues for a little bit and see how that goes. The other part was, Let's see if my life changes at all. If I'm not on a plane every week versus being able to be home for dinner every night in the Bay Area, it's an amazing place to work. It's very hard. At least We found it really hard to have much of a life outside of work. And so, given you mentioned,

I have five kids, given all those different schedules and logistics way just found it a really hard place to live. Um, but it's an amazing place to build a career in the work. So after two years, we decided, you know, that was that We raised our third fund at the time we moved back to Utah on it was it was really empowering moment for me personally, for our family, like it was definitely a statement about who we were and who we wanted to be and how we want to live our life to move back to Salt Lake. And so we've just been throwing ourselves into the community as much we Kansas, we're back and really trying to be good cheerleaders and supporters of everything that's happening, from startups to food and culture, like everything's been changing at a pretty amazing clip. So if you haven't been, here's the plug. Please come visit Salt Lake because I think you'll be surprised what it is now versus maybe what it was the last time you came.

12:59

I think over here on the coast, we don't hear much about Utah or, in general, about a lot of America. But is that actually really entrepreneurial?

13:8

Yes, it's it's very unfair. Like I said, just this last year you had quality Rex for eight billion. I think plural sites now valued between three and five billion, and the public markets you've got any given time. Right now, you probably have five companies that could be public in Utah is just a very, very entrepreneurial place on entrepreneurship is kind of in the DNA of the folks that are there. It's a It's a fairly young, hungry workforce. It's a place that had historically been hard to recruit to because both cultural differences but also it's a pretty extreme climate, cold in the mountains during the winter and hot, hot, hot during summer. Esos high deserts can cut both ways. But you know, I've just been super impressed with the caliber of people that it seems to be attracting over the last couple of years and then the quality of companies and velocity of companies that are coming up.

14:4

And you mentioned that historically, it's guess. Predominately Mormon. Yeah, it's like clothes.

14:11

I mean, I think, you know, I think this state now, like Salt Lake is a city, is probably like less than 50% Mormon, but it's still heavily Mormon outside of Salt Lake. In the surrounding area, you want to get in rural Utah, you're talking like 90 plus percent, so it's still it's change. Like the demographics, the urban demographics are changing really quickly, but it's still heavily dominated by kind of that that church influence, for sure.

14:41

But as a moment person yourself, do you see it influencing people who would come to live in you.

14:47

I think it's interesting I having not grown up there but also being a member of the church. The last place you want to end up is Utah because Utah is just, it was always perceived is like backwater. The church has this kind of weird, you know, kind of influence over the state. You get that close to the church, you start to pick up like the politics of it, so when you don't grow up there, that's really the last place you want to end up. But I think that's starting to change. I think what's interesting is people who come and visit now will come and they'll say, I had no idea I could get, like not just coffee at all, but, like really good coffee, there's,

you know, there's local breweries. There's you recognized notable chefs that air creating restaurants. There's world class arts community that's that's coming up. And so it's like people come and most of them haven't like that came through on a road trip, one so that came to go skiing and they kind of buzzed right through Salt Lake up to Park City when actually, like come into town and we can show them. Take them to some restaurants. You take them around town, show them some of the more interesting things. I think a lot of them are shocked. And when I talk Thio, my friends for CEOs in Salt Lake, they're just finding, especially as the Bay Area is doing what the Bay Area is doing right now. It's just so much easier to recruit out of the Bay Area when people can come here and experience Salt Lake, they just need to fall in love with it pretty quickly.

16:20

So let's talk about quickly into the sea. And, you know, Salt Lake is, I guess, a little bit more laid back in comparison to Bay Area, I should say, at least in my personal experience, when we moved back from the Bay Area to see at all, I felt like my brain. Just relax. It was like because you feel like you're slowing down. But it's good because all of a sudden you noticing all the things that passing around, you know, like you see the rest of the world just weird somehow. Just forget about it. Um,

but you guys invest in founders that presumably doing things differently and also have families, and you have different goals and aspirations and you've talked about it. Another podcast. How it was important to you that you can spend time with your family with your kids and not be in the colon. Quote khakis and Blue Short right? True like the rest of the season. So how do you fund companies that will be doing things differently, expecting still some kind of a high return and positive outcome?

17:26

Yeah, that's a great question, I think the I think people appreciate different. I think we're in a pretty For the most part. The startup playbook is pretty dog eared at this point, like everybody's kind of doing the same thing. And so if you're willing to experiment and do something different that is going to be attractive to folks, right, it might not be attracted to the people who gonna understand and live by that playbook. But you know when you can create a remote company and you don't have to apologize to anybody for it when you can, you know when you can staff and scale your company differently, toe look like it isn't unnecessarily out of central casting for the Silicon Valley Show, right? Like I think that that becomes really attractive to people over time. You know, I still think we're in the early days of figuring out how to kind of package that up as things kind of alternative universe that we're trying to create around a startup community and a start up culture. But I think we're getting closer,

and I think, especially as more and more people get burned by burnt out, you know, like you. Like you said, between your move from the Bay Area here, it's so easy to just kind of be locked in on Dhe Think that this is just like, normal life that, you know, you're just working all the time and you don't really have an opportunity to have even any other real interest besides work. And, you know, I think when you look at companies like, you know, I look a zap, You're right.

I look at base camp. I look at, you know, I look at even wordpress like, you know, these are companies that are doing things meaningfully different and as a result of not just doing it differently, but like being transparent about how they're doing it, why they're doing it. I think that is wildly attractive to people who, um, who want to be able to participate, whose work you know, who want their work to matter. But then they look at like, Oh, I guess I have to move to San Francisco and like,

I'll barely be able to have a life because all of my money is gonna go to rent, you know, And I'm gonna basically live on between the shuttle, the other Google shuttle, the Facebook shuttle. I'll stay on the shuttle or I'll be in the offices all day, every day. I mean, you know, I had to make the decision when I lived in the Bay Area. Do I want to see my kids in the morning, or do I want to see my kids at night? I couldn't do both, like I had to either go in super early so I could leave early enough to get home in time before we part. We have young kids, and so we're had young kids before they went to bed,

or I had to stay early and then, you know, kind of work into super late night and that's the trade off. I think a lot of people are making, and they don't realize that that's a false choice for a lot of them. They don't necessarily have to keep doing that. And so I think the more, um the more opportunities or companies individuals push back against the conventional wisdom, I think the more are gonna rally around some of these alternatives.

20:47

And let's push on that part about kids and staying out for work all day. How did you manage it between San Francisco and your time in Utah? And I guess five is a lot. You guys, haven't you?

21:3
How did Bryce manage to live in Utah and work from San Francisco?

Bryce and his wife had a social contract that while working SF he would barely sleep, work, and not call home unless it was an emergency, but upon return, he would be fully present with the family. Bryce and his wife got married really young, so even though he had five kids, they were all pretty young and did not mind dad's travel.

This may sound strange to folks outside of the Bay, but Bryce says that in the Bay Area people work so much, that constantly working while there was basically the only way he even knew how to function.



What was it a sequential way? Got married really young? I was 22. My wife was 21. We had our first child by I think I was 23 she was 22. So given that I'd taken time off of school, actually had, like, a year and 1/2 left of undergrad to do with the baby. Um, so you know, we are kids are all spread out now, like my oldest is 21 my youngest is eight. And so we have basically three years between each of them you know, I think when it came to commuting back and forth to the Bay Area from Utah, initially three kids were still relatively young, so they weren't that plugged into what was going on.

I would disappear and I would come back. But there wasn't. There wasn't any big resistance Right before we moved. That started to change. My oldest was like, Ah, you're going again. Like, really, you have to leave. And that was hard. That was really hard. But basically the social contract of my wife and I at that time was like, I'm gonna go to the Bay Area. I won't even sleep like I'm gonna be just pushing the whole time I'm there because then when I'm home, I'll be available.

I could be a lot more available here than I can be there, But when I'm there, I'm really there. So, like, we're not caught. Well, I'm not calling to tuck the kids in at night. If you need something, text me like we had a certain set of rules. We followed because if you've traveled much for work, you know there's no more helpless feeling than getting that call from a spouse who's you know, kind of having a really hard time or has an issue you can't resolve while you're there. And so when you hang up your bolt just more frustrated than you were when you initially called. And so, you know,

we had that we came up with a whole set of rules to help manage ourselves while I was on the road. But that was the contract. And that was also the thing that made it really challenged. You moving to the Bay Area when you're used to the Bay Area being on all out sprint all the time. But you were only doing it for two days. You don't really know how to function there without going all out all the time. And so I ended up in a position where, yes, I wasn't commuting back and forth anymore. But the only way I knew how to experience the Bay area, they only knew her way. I knew howto work in the Bay Area was like wall the wall all day long. You know, like pushing really hard.

23:27

Is that internal, or is that because everyone's doing it? So you feel the pressure, like as if you see you can't and I actually, I distinctly remember a tweet from a thing. Alexis, Honey how he overheard that somebody was basically questioning whether he's working hard enough because, you know, he has a kid now and he's spending time with his daughter, and that was that's obviously insane, but comes like that coming from people who don't have a family. So what do you think that was influenced by just the area till I think

23:54

I think there's a combination, right? I mean, I think, you know, I actually started a business, right? So we started a fund in 2005 and so and I think there was a part of me that was still very much like fighting to make the business work, trying to work really hard to make the business work, putting in the hours to try to make that work on Dhe. Thinking that that was the solution was like more. Um, I think that, you know, we had a team, and even though I wasn't trying to set a precedent for anybody to work the way I work, and I make it explicit now with people that even though I work a lot of hours,

and I'm like, into it. But it's mainly because I, like, really enjoy what I do. And, um, I find it really satisfying, I think I think, you know, I try not to judge anybody. I mean, there was a time in San Francisco when, you know, I would show up to the office at seven. In the morning,

oftentimes, 6 30 in the morning to beat the beat. The commute in on Guy would leave the office at, like, 44 30. And, you know, when you're in the Bay Area, you don't get credit for showing up at seven in the morning. Like people role in a 10. And they don't get you don't get any social capital for being there for three hours before they do. And when you leave at four o'clock, they're not saying Oh, well, he was here three hours ahead, So we actually have three more hours to go before you don't get any of that.

And so, you know, there was definitely times where I felt like, um, you know, it was like a bad example for me to be leaving at four o'clock or 4 30 but I think That was probably just my own insecurities. Was my own insecurities about where was the fund as we were trying to, like grow. Our brand probably owns insecurities. The boss. I've never really felt super comfortable being anybody's boss for being a leader of a firm or anything like that. And I think I've just taken me growing up and growing into that role that has helped with that. But I also think it's seasons to write. Like, you know, I was in a season in my career where,

like, I had to go all out. I had a deal like we had to make it work. We had to prove it out. And that's a conversation with at least for me with my spouse to say, Hey, look, the next couple years gonna be really hard and I know what it's gonna take for us to win, And I need you to be like we need to get on the same page about what that looks like. And I might have a new idea of what it looks like. You likely have an idea of what it looks like, and by being open and communicative around it. That gives us a chance to blend those two and find something that's sustainable, something that says, Okay, if you're gonna be like on the road for weeks at a time that I need to be able to like,

you know they need their own space, they need their own release. And so, you know, I think there's definitely, you know, it's a conversation that I'm happy that is being had. What I don't appreciate is people shaming one or the other for the choices that are making. Like, you know, I don't think it's helpful for Alexis Sohan Yin to judge anyone for how they're working. And I don't think it's helpful for anyone to judge him for thinking he's slacking off or something like that. I think that's crazy on bull friends, but I do think it's healthy that we have the conversation right. Do you think it's healthy that people recognize that there's lots of different ways to play this game of life, and figuring out and giving yourself space,

too, come to terms with what that looks like for you at any given time in your seasons of your life? Like, you know, I think that's a healthy thing for people thio to think about. I don't know. How did you find it? Like when you when you were, like, in the thick of it. How did you figure out howto about you? I presume you have a family or kids during

28:2

another that time? No, but okay. You know, we had that. We, uh I mean, my first company, which was the only real company so far, have failed. Actually, you know what? I think it was in part because we were so stressed working all the time. We never took the time to actually think of what we're doing. We're just plowing ahead. And only by by the time we're basically run out of money and just got exhausted and so on the way forward is when we came back and then took the time to online and relax and, you know,

a few months into it, we realized OK, there were probably ways we could have. We could have done something about it and done differently, but it was too late by that, Um, yeah, I don't think people live very healthy lifestyle in the Bay area. And But then again, I don't think you can. Maybe you could, but I can't imagine myself say, being the CEO of uber and having a family and finding time to go and hang out with kids. I think it's a very conscious decision that you need to make that. Okay, if you want kids and you wanna spend time with health and now is not the time to be a multibillion dollar a day least not in that way. You have to plan the company.

29:18

Think there's probably some truth to that. I think there's probably now kind of examples that would be contrary to that. But I think it's hard, too. Not as be put in that position, recognized like Look, this is just gonna be a hard few years or decades or whatever. The tradeoffs it is that you feel like you're worth making to have that happen. It's just I don't know that it's possible to in this is a debate I have with my barrier friends all the time. It's like, Is it even possible to run a blitz scale company like if you look at the companies that have actually gone for it, like if you look at the ubers and the link tins and the Facebook nine times out of 10 toe run by single people. You know, it's very I think it would be hard to maintain or, you know, kids. It would be hard to maintain a healthy family life writing.

That's the interesting thing about the Bay Area. I think the thing they value isn't necessarily healthy family lives that value changing the world. And, um, that's measured very differently. Then maybe success for your people with families rather interests,

30:32

right? You know, it's hard to say because I agree with the changing the world part. At the same time, I can't say how much of it is a story that was made up afterwards. A supposed todo they just one power or money or something else, right? But it seems like you have to give up everything else for this one success factor you trying to achieve on. And I wonder how many people even know what they're trying to achieve a supposed to just, you know, turning the gears and working through this process until they get somewhere on the That was a question I have to, because you've set him presumably a lot of boards and heard a lot of countries a t end of the day, How many founders stop and ask themselves those questions and realize that they just did something for 10 years that wasn't even theirs?

31:19

And I think there's a lot of that right, Like when, especially when it comes to the fundraising start up stuff like when you take other people's money, you're locking in for a certain right, you know? And I think a lot of times into infrequently, people don't question what it is they're signing up for why they're signing up for your weather. You know, expressing themselves differently through their business could actually get them better results than what they're getting, just kind of plowing into a brick wall all the time because that's what people say they're supposed to do. I mean, I think that, you know, in a lot of respects them Ah LA Because startups are so hard trying new things is often discouraged, right, because it's hard enough. Why make it harder on yourself?

And so I think that, um, you know what I feel like people miss out on and we're missing on right now with this current started cultures were missing out on the human aspect of startups like Everybody's running Ah, playbook. They didn't write for themselves. And so we're missing out on, like, the unique thing that you or I or founder ex Kenbrell ng to a business because they're so went into this idea of what it means to be a start up. What it means. We have started CEO. They miss that special piece of running a business, which is like It's your own thing. You get to have this platform to express your own values into the world, and you can do that through your products. You can do that three year company. You can do that through the community.

There's so many different ways to express your values into the world through a business. And yet a lot of that we dissuade founders from doing because that distracts from you know what's gonna help you get your next round. What's gonna help you grow three x instead of one x this year, right? Like there's there's a lot of factors that, you know, we kind of that I feel like you're draining the energy out of the start of community that were that are kind of systemic, and so hopefully we can get more people to step back and think about you know whether smashing their heads into the brick wall is really going to get them to the destination. Or if they need Thio kind of peek around the wall and see if they want to get there. Be if there's some other path that would make him happier, that's more tuned to their personality,

33:46

right? And presumably, when you're founders, I'm tied Thio. The VC is next round, and their objectives become clearer because it's all about where the business is going to go, not where the rest of the community is going to go and confirm or deny this. But I mean, it feels like a lot of companies in the Valley of raise their next ground or do certain things that published the things in part because they need to impress their peers. And the years of peers need to also maintain appearances

34:18
What is causing sky-high valuations and massive rounds today?

The vast majority of money people raise now is to play the leaderboard that feeds one's ego, more than the company. Fear, pride and greed, those are the things that drive large rounds.



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The steeper the growth rate of a company, the more appe ...

for sure. Yeah, I think I had a post a while back. That said, You're the vast majority of money people are raising now is done out of vanity or greed, not out of need like people don't need as much money as the raising right now. It is. We've created a funny little leaderboard that people are gaming, and it feeds a certain part of their ego. It feeds a certain part of the whole engine that isn't productive, right? Because when all of your competitors have raised $50 million you can't really say that. You know, a new arms race of raising funds is gonna be some competitive advantage, right? So what else is what else is driving it, Andi?

Oftentimes it's It's fear, fear of not looking as you know, commanding or, you know, pride agreed. Whatever it is, right, like you want to be able to tell that story, and I think that's it's not serving its very well.

35:20

I've said this before anything. It takes a different type of person to do what you do now within the VC and, um, for you personally, you know, you you're not necessarily challenging the BC community, because no way you're so far on the fringes to what they're used to, they're not seeing yours a threat. Yet. At the same time, you're not flying in private jets or have, like six yacht sparks somewhere around the world. Just three. Just three. We're talking about Founder's. She would try to maintain appearances because everyone else's doing that. How does it feel for you personally? Or maybe How do you keep yourself in check? Do not desire the three more yachts that will drive your next fund to be a $1,000,000,000?

36:15

That's that's an interesting, challenging question to try to answer, right? I mean, you know, we gave in moving to the Indy V C model from our traditional kind of seed model. It costs us about 80% of our LP bays. So you know, it's different enough that it scared away a lot of people who couldn't quite wrap their head around what we were doing or why we were doing it. And that didn't necessarily scare me, but it was certainly a wake up. Call it waas reminder, especially in the early days, for us, like we heard a lot of noes for our 1st 1 too. We had a lot of people not understand what seed investing was either. And so,

you know, I think in the middle of all that kind of gave me confidence that we were at least trying to do something different enough that it made people uncomfortable. Um, in terms of like our impact on venture, it's still TBD. But I do know, you know, there was a a quote from me in a New York Times article a week or two ago about my surprise around how thin Skin V C's are about people questioning their model. And, you know, I've had a lot of interesting experiences with investors over the last few years. I still, you know, I still serve on the board. I'm still friends with lots of them. This is my community of people who have been around the vast majority of my career.

But I've actually been in events where people like confront me and say, What are you doing here? You know, talk about feeling like a major outsider. Often I've had friends who've been investors, co invested in companies who don't reply to my emails anymore. That's the thin skin I'm talking about. We aren't threatening the venture model. We're not even saying it's bad. We're saying that there should just be other things, like if you look at the in the wake of that New York Times article. Almost every investor publicly said what they say privately and that is venture isn't fit for most companies. Okay, it's not very constructive to say venture isn't fit for most companies. You can ignore the rest of the companies, but you can also look at who takes venture.

And you can see that even if the companies who take it, it's not the right product for them, right? Like less than 1% of companies who raise venture capital Dr the Returns for the industry, right? If if, if the promise of venture is that it is the fuel for building rocket ships, $1,000,000,000 businesses, less than 1% achieve that. So imagine you having a product that you sold and that 99% of your company and 99% of your customers didn't get any value out of or didn't get the intended value out of it. That would be pretty terrible product market fit. And yet, as an industry, when it does fit, it fits so enormously well that it covers up everything else. And so you know,

I think I think because we are talking about alternatives, I think people feel threatened and think that there's some mass that we're projecting some huge flaw into the venture business, that it is, um, at best needs improvement and, at worst, evil. Right? And we're not saying any of that stuff. We're just saying, you know, if we want to see the full range of entrepreneurial opportunities, if we want to see the full potential of entrepreneurs, they oughta have other ways to build a business. And I think surprisingly like that has put us way on the fringe. You know of this whole industry,

which is fine. I'm comfortable being on the fringe. What I'm not comfortable with is being misunderstood. And so I think we're here in Seattle to do these in processions, in large part because I can write the same block, post three different ways, saying the same thing 10 different ways and it will always be construed, as you know, we're playing small ball, that we're only interested in small companies, that there's really no you're either you either for V Caesar against Disease, and we think there's enough meaningful nuance between those two polarities That's hard to convey in a block post, so you just have to hit the street and say, You know, fire away If that means we're way on the fringe and we're way out there at least people will hear from us directly. Instead of projecting onto the things we write, the things they believe.

41:9

I just realized something, and I think it's the first time found there. You you don't realize it, and you maybe don't even want to hear this. But your mask out of a burning unicorn is actually really fitting because maybe the reason why somebody sees our sort of angry about your existence is because all they want is that one unicorn there's gonna pay all the bills, But to get there, they need to burn the 1000 other one's potential unicorns. And so when you're burning, the unicorn is literally the best. Advertising for you is a burning unicorn running down Sand Hill Road. Think like a lot of founders don't realize that even if they got investment and God seems to be support, oftentimes they're just a pawn in somebody else's gained and them being burned down into the ground is not even a problem. For anybody involved with the seas will easily pull the plug on you and they won't even notice. And I think that's not that's not very well advertised and maybe a message worth also spreading

42:17

totally. I mean, I think that's a big part of the business model, right? Like your goal is a fun is to find that one the three companies per portfolio that are going to drive all the returns and to sift out the others before they can consume there, There, you know, unequal amount of the capital. You want to find those winners as early as you can and put us much money behind them. As you possibly can think our intent and burning the corners to say like a CZ. Helpful as it's been, it's also kind of ruined. Um, you know, we say, like unicorns have eaten seat investing, right?

Like when every investment decision is based around a priori understanding of what is potentially a $1,000,000,000 business is silly. You know, like that you and I could sit here and dream up an idea that's a $1,000,000,000 business and that you are pitching me this with no, not a whole lot of proof, a ton of risk on the table. And yet I, as an early stage investor, have to decide whether you have the potential to become that $1,000,000,000 company like it's just a fundamentally flawed exercises. So by burning the records say, like, let's just remove this archetype of what it is we're talking about Like he said, you could be, you could if everyone's chasing that 99% of them are burning down in the process. And so it definitely limits the kinds of companies people start like if if your primary filter for starting something is, will this be a $1,000,000,000 business like you're gonna talk yourself out of every single idea that comes? And yet one of those might actually be your life's work, But because it isn't a $1,000,000,000 company, you think it's not worthy.

44:5
What companies are the best fit for Indie.vc model?

The companies that fit Indie.vc the best are the ones where the founders either (a) have never heard of the venture funds and would like to build a big business on their own or (b) have raised money for their prior company and would like to avoid it for the next one.



So who's your ideal customer? Start twice.

44:10

I mean, I think we I think we're early enough on that. We're still trying to figure that out. I mean, I think, but the ones that tend to work really well for us are people who have either no experience in the venture business, and I've never even consider raising money before. But somehow we found each other and they don't have any. They don't have to exercise any of the demons that come with the startup worlds exist today. They have a fairly blank slate, and building a really business is something that they want to do on Beacon. Just support them in that path. The other one, I think that that is interesting is the Thea Tre who's maybe tried to raise money before and had a negative experience. Or the entrepreneur who had raised money for a prior company and wants to avoid it this time around. And that ends up being, you know,

I mean, those are just people with a chip on their shoulder that we really like to work with, people who kind of understand they're not enamored by the start of world anymore, like they've felt the harsh realities of it. And so they want to control their own destiny. They want to preserve Optionality for as long as possible for their business. Those seem to work really well under our constraints, and I think the other one is like people who aren't afraid of selling people who who value, you know, selling something to a customer and having the tangible feedback that comes from that and the revenue that comes from that and having that be a motivator for them. As you know, having lived in the start of world, there's a lot of people who love to build products they don't like to sell those products. And so finding people who like to do both tends to be a good fit for us. But, like, you know, we want people who, if you talk to any in the VC CEO, they will all talk about the company in a very similar way to what you would hear at a wildly ambitious startup who's talking about a $1,000,000,000 business were just talking about it much more practically about how to go about building it.

46:16
Can Indie.vc exist if they never find a unicorn?

Bryce says yes, Indie.vc has a return model that enables them to exist and to return funds to their investors without having a home run. Remember though, companies with positive cash flow who don't need to take money and don't need to sell also happen to be the companies that can do both of those things quite easily.

Update: As of October 2019, Bryce had a $2B combined exists from just two portfolio companies. They are doing alright.



Would you be able to exist as a fund five years from now if you've never found the unicorn?

46:22
Can Indie.vc exist if they never find a unicorn?

Bryce says yes, Indie.vc has a return model that enables them to exist and to return funds to their investors without having a home run. Remember though, companies with positive cash flow who don't need to take money and don't need to sell also happen to be the companies that can do both of those things quite easily.

Update: As of October 2019, Bryce had a $2B combined exists from just two portfolio companies. They are doing alright.



Um, there's there's certainly a return model for us that absolutely does it. Yeah, that's still delivers a solid return to our investors, but doesn't necessarily require your record. You have to remember when we started seeing investing, unicorns were like that wasn't even part of the equation like sure you could have a $1,000,000,000 outcome But, you know, we had we had a couple early acquisitions in our first fund. Where is those two combined? Probably Total exit value was maybe 1 75 1 80 they returned. Those two alone probably returns 75 80% of the fund, you know. And so that's That's what people Miss Insead investing early on was, it wasn't just going earlier. It wasn't just writing smaller checks. It was a fundamentally different business model.

We could see venture scale returns. We could return an entire fund off of a sub $200 million acquisition, right? And, yeah, that's been lost in the annals of history, right? But that was a really critical piece of what it was we were doing. And I think if you look at what we're doing with NBC, often times we can achieve a similar kind of business model. Alignment with the entrepreneurs were funding, So there's certainly a model that gets us returns based on, like the cash flow dividend revenue share a piece. But I think there's also compelling story for us to say. You know, surprised people might be surprised to know how valuable companies with cash flow that don't need to raise money and don't need a cell,

actually, are two people who want to give them money or want to buy them. And I think you know, last year we had we probably among our NBC portfolio companies. We've turned down tens of millions of dollars investment into 2018 and we turned down our first acquisition offer on January 4th. And so these aren't low value business like we will see, I would posit that will see venture level types of multiples on our fund certainly easier than the venture getting a multiple of a $1,000,000,000 fund. It's much, much harder thing. The multiples were shooting for honors.

48:49

It makes total sense. That's the

48:53

problem, though Maybe it makes too much sense. I think, when people say, Oh, this makes sense I think, Well, maybe we're not being Maybe we're not being polarizing enough. Maybe we're not as too straightforward way we need to be in a Viennese. There's needs to be a curveball in here somewhere because, you know, very rarely do we here. Oh, that's a bad idea, right? That makes sense. But it's like,

you know, weighing the world way think so. But, you know, I think that that's a big part of what we're trying to do to is, you know, I think we were in a unique position where we could stick our neck out. We could try something that a lot of people couldn't do that didn't have the voice we had or didn't have the access to help ease that we had. The hope Is it like you. By doing that, we can usher in the whole universe of alternatives for entrepreneurs, not just us. We don't need to be the sole provider here. In fact, it be a huge missed opportunity if we were the only one doing what it is we're doing. And so yeah, I would say we're last two years to start to see Maur Energy. More activity Maur investor dollars coming in and trying to play around with an experiment with models. Yeah, that's that's validating at a certain level

50:14

just in closing. Let's let's pause only in D. C. But everyone on the rad dads get get to talk about a little bit about the family and how you kind of deal with the life that you live through in business and your family life, and you mentioned about having hard conversations with your wife to make sure everyone's on the same page and then delegating test to you so that, you know, that's all taken care of. But in 20 years of experience raising Children, what are the couple of things that you can recommend to founders And, you know, people outside of founders to who are gonna have a high stress environment, work and family to be able to manage both and actually spend meaningful time for their families?

50:57

I mean, I think you know, the 1st 1 is like, Be gentle on yourself like no one gets it right. Even the people who look like they've got it all figured out don't have it all figured out. And so to think that you need to or that you're less because you haven't figured it out yet, like, just ease up. It's all right, you know, It's like you said, I've had 21 years of experience raising kids. Um, and you know, I've made every possible mistake you could make as a husband and as a father. And so, yeah,

give you give yourself a little bit more slack than most people are willing to do. You know, I think from a relationship standpoint, you know, I think it took me. I'm not. I'm not a great communicator. I wasn't a very good communicator. And so I think that a few things that we figured out early on was that, you know, traveling was fine as long as it was communicated way ahead of time. No surprise. Like the fewer surprises you can spring on someone especially espouse the better. My wife is a full time mom. And so, um,

we are fortunate in that we don't have other to work schedules to try to juggle, But we certainly have with five kids, there's plenty of other scheduling that goes on. We started using an app called Trip it a long time ago. It was a company we'd invested in, but the benefit of trip it was that it collects all of the itineraries for the trips that I have coming up. And so, rather than me having to keep her up to date on, you know, when I'm going or where I'm going, she could just pull up trip it and she has every trip. I have for the next three months is all in there s O that ends up being really helpful. You know, I when I'm like I mentioned earlier when I travel, I tried to travel and I don't communicate a whole lot while I'm gone on Guy tried to just make kind of ring every ounce of value I can out of those hours on the road when I'm home, I try to be around.

I mean, I have I had for years and years. I had an office that was, like, three blocks away from my house, so I could kind of be around and we kind of live in a neighborhood where, like, I have two kids schools within two blocks or three blocks of our house. And so, you know, we have a pretty optimized life in terms of being able to be around and be available. I found we moved into a different house that had a home office, and then I found after a year, I never actually went to my office three blocks away, and so I primarily, when I'm home,

I tend to work from that home office. And so, you know, I like being around. I like being home when my kids get home from school. I like me. I'm I'm Aktham. Their lunches every morning packed their lunches for them, draw crazy things on their lunch boxes or bags just trying to be integrated in their life. I think from a relationship standpoint to what help was that we have a pretty clear division of labor like I do. They're certain things like I do. I do the lunches. I do the dishes like there's just, you know, vacuum. I sweep like those air like my things that I d'oh And you know,

uh, that's been really helpful to because we each know kind of who's pulling what, who's pulling weight and who isn't. And it's pretty easy to kind of get things in check. I think from now on parenting standpoint, you know, I'm still figuring out man, like trying to figure out the right amount of, like, discipline, freedom, um, support exposure like, you know, it's just so hard to get right. But I think more than anything,

you know, trying Thio. Yeah, I went to I went Thio went to like a bunch of Christmas parties at the end of the year. Unfortunately, I was in the Bay Area when a few of these were going on. I don't love those kinds of said settings, but I, like, really forced myself to go and get outside of my comfort zone and my thought coming back on the plane. Waas, if I could only be, is engaging and interesting and interested in my kids as I waas in all of those people who I don't know who I'll never see again, who I was really great impressing and who I spent hours chatting up about things that they cared about. If I could be engaged at that, engaged with my kids and my family like that would be game changing.

You know, this is something my wife and I talked about all the time. It's like, How do we make sure our kids get the best of us and not just everybody else? You know, we're really good at, like being social and being out there, and I'm great at networking and doing the things I have to do to make my business work. But you know, that's exhausting. And if you had to do that around your family to like you'd just be wiped out all the time. But, you know, trying to strike the balance of like, what if you treated your kids like you did people at a cocktail party you were trying to impress and you cared as much about, You know,

the things that they were into as random people you'll never see again like that was a That was a moment for me, And it's still processing it because I don't know that I've you know, that's not a switch. That's just when you flipped and all of a sudden you're there. But, um, that is kind of the idea in the back of my head is something I'm trying to figure out how to be that deeply switched on when I'm with them, you know? So I don't

56:39

know. How do you do it? I think I made a conscious decision to do it, and that includes putting away to follow. I mean, it's only been four years, therefore in one, so I figure I can do it for a couple of years and really engaged. I think I'm starting to slide further away. Yeah, I mean, it takes a lot of energy with kids. But at the same time, I can see my four year old now wanting to go to school more than to go see grand parents go do something fun. So the span of their attention solely dedicated to parents in my at least, opinion so far is not that long. So if you if you won't do it,

I do it really, because then you can always slack off. Later, they're gonna have friends and sports and games. Whatever. Right? And then you're only gonna need the cover, right? I mean, one of my friends, his kid, just went to college. He says he sees him for, like, two hours a week. And it's kind of just like,

Yeah, OK, things are going great. Okay, go on, do your thing. Right. So your daughter is 21. She's a sophomore in college. Yes, part of it is I think you can probably just do more later and that, but that's again part of not accepted in Silicon Valley playbook. You gotta be 70 then do you start of now? Because, like, you'll burn out and die before it's a $1,000,000,000 company in the I think there's so many other ways of doing it than that. I mean, that's why I'm also see out.

58:9

It's true. I mean, you gotta do it differently. Here. I been apparent my entire professional life. I don't know. There hasn't been. I've never had a full time job where I wasn't apparent. That's like, You know, that's informed. Yeah, it's really shaped my career in a lot of different ways, right? I think one of the best things we did early on was just take risks as a parent. Ondas a couple because you kind of develop that risk muscle early on where you can do things that make one another company uncomfortable, professionally.

But then you could see one payoff for one not pay off without risk. Deal? Yeah, well, while the consequences still feel pretty low, But

58:53

being where you are now, do you actually get to spend time with your kids? You know, you're in a lot of skis. You guess? You guess. Find time. Todo

59:1

ski on Saturday, we just spent, uh it was a holiday weekend, so we just spent four days in southern Utah. So ST George, we have some family down there. Someone visited family and my kids hiking way went swimming. Yeah, I'm like a dad. I'm like in it. Like you know it. Yeah, I have my own interests. Some of those I could do with my kids, some of those I can, given the level that I try to do some of the mad, but,

like, you know, I'm in it. I like it is I never ah, like being a dad was never something I necessarily aspired to be. It just happened. And so I'm just trying to be the best one. When you have five, you get tons of practice. So, you know, you know, like, we're we're super. Any two were really in each other's lives, and I wouldn't have it any other way.

59:53

So the last one is gonna wear the same college? Basically, Yes. Yeah, totally. Well, thanks for coming, love. Everything I heard. I mean, it's great to hear that you're disrupting an industry that's right for disruption. And actually, hopefully you know, people are gonna have meaningful companies and have life and family and experience life. I was headed with thanks to you guys. I hope so. It's pretty awesome.

And good luck in your tour. Thanks, man. Thank you for listening to this episode of the Red. That show If you'd like to hear more, please visit rat that show dot com. And of course, if you have a minute, please do leave us a review in iTunes. It really helps to spread the message until next time. Goodbye.

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