Ignite VC: What Makes a Great Venture Capital Investor with Mahendra Ramsinghani | Ep305

Brian Bell (00:01.077) Hey everyone, welcome back to the Ignite podcast. Today we are delighted to have Mahendra Ramin Sinkhani on the mic. He is the founder and managing partner of Secure Octane, a San Francisco seed fund backing AI and cybersecurity founders with exits to a lot of names you've probably heard of, like Palo Alto Networks, Microsoft, and others. He literally wrote the book on the business of venture capital, which I have in my hand. It's it's a very thick book, too, by the way. It's very large. now in its fourth edition, I think I read I I think I read maybe the second edition when I got into venture, you know, like six, seven years ago. and now he's co hosting inside the network and and teaching also venture capital at UC Berkeley, which is where we ran into each other. thanks for coming on, Mahendra. Mahendra R (00:42.424) Thank you for having me, Brian. It is a delight to meet you. Brian Bell (00:46.047) Well, I'd love to start with your origin story. What's your background? Mahendra R (00:50.008) So I grew up in India and you know, like most people who grew up in a certain era, we had two choices either you become a doctor or you become an engineer. And you know, I was afraid of blood, I was afraid of you know, generally sort of people, death, all of those sort of challenges that come with the profession of medicine. And so I chose the easier one of the two. Brian Bell (01:17.193) Yeah. Yeah, that makes sense. I can't I just got back from the hospital yesterday because I dislocated my shoulder the day before yesterday, which was really painful. I've never done it. It's a really weird feeling to lose control of a limb. but yeah, going to a hospital is not not for me. It's not where I'd want to hang out, you know, twelve hours a day. Mahendra R (01:25.673) wow. Mahendra R (01:30.989) Wow. Mahendra R (01:36.663) What was was it a sporting event or wow. Brian Bell (01:38.857) Yeah, basketball. Yeah. Yeah. Just kind of keep yeah, I don't know. I'm in my starting to get into my late forties here and I'm still playing, but yeah. so you you started venture not in Silicon Valley, but actually in Michigan. Tell us about that. Mahendra R (01:45.998) Yeah. Mahendra R (01:52.951) Yes, yeah, I this was sort of more of a happenstance, Brian. You know, as you know, or many of the VC professionals who grew up in a certain era, you know, none of us started our journey by saying, you know, I want to be a venture capitalist when I grow up. we did have the foundational elements. I mean, you have AI. Nowadays, of course, it Brian Bell (02:10.953) Yeah. Maybe nowadays they do. It's it's well yeah. Nowadays I run into twenty year olds like, How do I get into VC? And they're like a sophomore in college. Like, first go get some work experience, you know? yeah, go build something. Mahendra R (02:19.84) Yeah, yeah. Yeah. No, and I think that the industry is matured what, we are fifty years into it. The first wave of fun started in the late 70s, eighties. So I I feel like there is a certain maturity or awareness of you know the word industry, which I can use very broadly in the context of what we do. and it's it's good that people are becoming aware of the potential and the impact that venture capital can have. they also realize that this is a lot of hard work. you know, and at the same time anybody who comes into this business thinking this is gonna be get rich quick is bound for disappointment, you know. Yeah. Brian Bell (03:01.973) Let's get rich so slow. Let's get rich so slow, like excruciatingly like paint drying slow. Mahendra R (03:08.014) Exactly. Ten years, fifteen years, you know. yeah. Brian Bell (03:10.453) And that's yeah, and that what's funny is like that's your first fun, which was probably your smallest fun. And it's it's just getting into like carry like in year ten. yeah. Takes a long time. Mahendra R (03:21.354) Exactly. A and if you do it in your prime years, as as you've done, Brian, you know, your spouse is wondering like, Okay, you you're this cool VC, you're living in this heart of the valley, doing all this cool thing, but where is the money? Like, you know, yeah, how do we pay our bills and mortgage and things like that? So it's like this dichotomy, the social sort of schizophrenia, if you will, where on one side your profile has this Brian Bell (03:32.627) Yeah, where's the beef? Yeah. Yeah, where's the money? Brian Bell (03:41.396) Yeah. Mahendra R (03:46.67) You know, amazing deals and V C and blah blah blah. On the other side, you're literally like fighting day to day to make the end sweet, especially for seed funds. Brian Bell (03:52.234) Yeah, you know you know why you always see VCs and Patagonia jackets? Because that's the the only thing they own. Like they have no money to buy anything else. Mahendra R (03:59.856) And and they can afford I cannot afford full sleeves. Yeah. Brian Bell (04:03.061) Yeah, I can't afford the sleeves. I had to buy the vest. Yeah. So it's so it's funny, but it's kinda we're poking fun, but it's sort of true, right? We don't we're we're cash poor, equity rich, potentially. Like if if we manage LP money really well, hopefully sometime in the far distant future, seven, ten, fifteen years from now, we can make some money. I don't think any of us join it. Mahendra R (04:06.286) Exactly. Mahendra R (04:23.244) Yeah, yeah. Brian Bell (04:28.615) out of the the the want to make money. I mean I made way more money at Microsoft. I I love to tell my LPs, I I you know, I took a 90% pay cut to to do this from working at Microsoft. I could have just stayed there and made, you know, probably, you know, I was making close to seven figures, probably well over seven figures now, if I would have just stayed and, you know, did the Game of Thrones track is what I like to call it. Mahendra R (04:33.89) No. Mahendra R (04:43.382) Yeah. Yeah, yeah. Mahendra R (04:51.936) And and you were of course at the epicenter of the largest company that literally, you know, sort of when you think about the open AI journey and how Satya and Microsoft sort of came together at a very critical time in the evolution of this technology. I mean, you're literally in the heart of it. So I can imagine your your partner, your family members trying to convince you like Brian, Brian, do not leave Microsoft. This is not a good idea. Brian Bell (05:20.489) I stayed as long as I could, but I was about to get on a pip because I was I was literally closing my second fun by the time I left. 'Cause I had my first little rolling fun kind of on the side. And then and then I I was finally I was launching fun two. Did the first close, I was like, Yeah. Mahendra R (05:22.019) Ha ha. Mahendra R (05:27.969) Yeah. Yeah. Mahendra R (05:36.611) Yeah. You know, so so last year when we did this Berkeley program, I mean you came and spoke to the one this year, we had this young lady, you know, she was working at NVIDIA and literally like seven days after the program ended, I get a text from her saying that I'm quitting my job and I'm gonna start to to raise my first fund. And I had the similarity actually, you know, this is and yeah. Brian Bell (05:58.846) NVIDIA's doing pretty good right now. Yeah. Mahendra R (06:01.55) So, but you know, it's like it's like the wave that carries you. you know, she she quit and then I was afraid that she will not end up raising a substantial or a meaningful amount. Well, she's approaching now almost 20 million. so fun twenty million for fund one solo is a good start. And I feel like it Yeah, exactly, exactly. No, no, no track record, no deals, nothing, but just sheer Brian Bell (06:05.791) Yeah. Brian Bell (06:19.101) That's amazing. Yeah. With it without experience, right? Just I mean, just yeah. I th Mahendra R (06:28.366) I would say Hood Spa and and Boldness, which is sort of the classical entrepreneurial edge, yeah. Brian Bell (06:28.436) Incredible. Yeah. Yeah. you have this famous story of Bradfeld. you know, that relationship started with a cold email. Tell me about that. Mahendra R (06:42.552) So you know, Brian, I you know, so living in Detroit, starting to do investments, you know, had spent a good seven years at the state's sort of economic development agency building this fund of funds program. And you know, we had very little idea as to what exactly this business entails. And so for me, the best way of doing it was to talk to people who are way more smarter than I am and start to write things down in my own sort of journal, if you will. So that journal started to turn into a manuscript. And then before I knew it, a publisher had given me a contract. And that publisher also sort of mentioned, by the way, you know, Brad Felt has written this book called Venture Deals, and maybe you should talk to him. And then I looked him up and sent him a cold email, and I sort of ascribe it to his generosity or spirit. You know, by the way, I sent a lot of cold emails to a lot of VCs in in the valley and other parts of the country. And he was one of the few who promptly responded and said, Sure, tell me how I can help. And and now we've been lifelong friends, we've run a marathon together, we've done two editions together. So it's all from a cold email, but I also sort of say the recipient has to have some room in their heart, in their calendar, and and so that's where the magic begins, yeah. Yeah, yeah. Brian Bell (07:51.172) wow. All from a cold email. Brian Bell (08:01.983) Yeah. Right, right, right outreach at the right time. And you you were you were writing a book, and so you're saying, Hey, I want to interview you about the book. and yeah, like most VCs would probably say, Yeah, sure, I'll I'll help you out on that. Versus like, Hey, you got any good deals? You know? You got any good deals for me? so let's talk about secure octane. it's a special seed fund in security. Walk us through the thesis. Mahendra R (08:10.762) Exactly, exactly. Yeah. Mahendra R (08:16.14) Yeah. Exactly, exactly, yeah. Yeah. Mahendra R (08:31.992) Well, this is funny. Well, you were giving your talk at at Berkeley, you know, you described your thesis, and mine sort of is like on the opposite end of that spectrum, is highly concentrated, highly specialized. And actually the genesis of it came from this fact that you know I'd moved from Detroit to San Francisco. And Detroit or, you know, other parts of America, as you know, are sort of you could be a generalist. you know, the geography is sort of doesn't force you to be a specialist. You have opportunities that come to your door, you don't have to go hunting as much. And so when I moved Brian Bell (09:10.077) I kinda wish I was a specialist in some ways because then I could just really, really focus on my lane. You know, I thought about this when I started Team Ignite of just calling you know, calling it AI Ignite or something, you know, because I have an AI background, right? How did you decide on your thesis? Was it because you had a security background or Mahendra R (09:15.244) Yeah. Mahendra R (09:21.249) Yeah, yeah. Mahendra R (09:26.526) I had an engineering background and then when I came to the valley, it was a little bit of like that product market fit, the founder market fit journey that we see our founders go through. I sort of spent enough time to see that there was no seed stage cybersecurity focused fund. So this is back in twenty twelve, twenty thirteen when you know the SAS wave was at a it's sort of hitting its peak. You know, everybody was going after the Pinterest of the world and the Meta or Facebook. And actually one of my dear friends who worked at a very large fund actively discouraged me for being too narrow and too specific. And said, look, you know, the spend on cybersecurity is barely 10% of any company's budget. So by design, you are forcing yourself to be only in the 10% of the market. Why leave this ninety percent behind? Why not just do a little bit of everything? And I remember telling him that look, I wish I could, I don't have the resources and more importantly, I have to find a way to reestablish myself in a very competitive geography. So that's how things started and then I got lucky very quickly. Brian Bell (10:32.521) Hm. Yeah. tell us about getting lucky quickly. Is that the the Misto story? Mahendra R (10:39.16) So no, the Demista story, I'll come to that. But the f literally the first investment I made, Brian, was so I went to RSA, which is this annual security conference. Yeah. You know, about yeah, exactly at the Moscone in San Francisco. And you know, typically you have what thirty, forty thousand people. I think last year there were almost fifty, sixty thousand people. So at the time, you know, of course it's it's annual conference, all the best minds and security are here. Brian Bell (10:49.151) Yeah, the RSA, yeah, conference. Big big one. San Francisco usually, right? Yeah. Mahendra R (11:09.288) And I was crossing the street, you know, and one of my friends literally was coming from the other side and stopped me in the middle of that crossing and says, Hey, I heard that you're starting a seed fund and you should talk to this guy. And, you know, she introduced me to this person. And 30 seconds later, we had dispersed back into, you know, they were going in the opposite direction. I shook hands and I managed to take their contact details. So, fast forward five years later, that guy starts a company, it becomes my first investment. And it delivers like an eight X outcome in four years. I I just think that was sheer luck, Brian. Like, what are the chances of that person, me crossing that street in thirty thousand people at the same time, and then that magic happens. So I'm a big believer that, you know, between the debate in our business of skill versus luck, gosh, I am grateful for having been lucky occasionally. Brian Bell (11:42.687) Nice. Brian Bell (12:02.655) Yeah. Yeah. How do you manufacture more luck going forward? I I guess is a question, right? 'Cause that was a pretty lucky just on a crosswalk, happenstance, like perfect kind of timing, coincidence. I can Mahendra R (12:12.206) Yeah. Yeah. Yeah, and you know, look, we have we manufactured these stories for our LPs about how skillful we are, how our sourcing mechanism works this way or that. And and look how cool we are. You should give us money. I think the reality is if you peel down each one of our stories, like even Demisto. I remember Demisto came to me from Excel, you know, Jake Flomenberg. I I am eternally grateful to Jake. He is join now joined this fund called Wing Ventures. So Jake calls me and says, Hey, Excel is leading this round. It's a six million dollar round. We are taking five and a half million. You can take as much as you can. I mean, I could have literally taken the entire round or parts of it. So the fact that he called me, you know, I had shown Jake almost half a dozen, maybe ten different security investments. He had passed on all of them. He did not do a single one. And then he calls me out of I don't know, he saw me hustling around or or what whether it's sheer sympathy, luck, timing, I don't know. So Demisto was a 16x outcome for font one. And again, if Jake wouldn't have called me and I wouldn't have responded promptly. I mean, literally, I remember going in 24 hours later, meeting with Slavik and Rishi, you know, the co founders, and as I left the room, I shook hands and said, Yes, I want to write a small check. And small was 50k. You know, I wish I'd written a much bigger check at the time. And so it's like you look at all of these events and say, Yes, you know, you have your prepared mind hypotheses, but how do you manufacture luck? Gosh, you know, I come from the east, so we talk about karma. I wish I had a good way to to decide to kind of formulate how to manufacture luck, but I I am still struggling on that front. Brian Bell (13:56.746) Yeah. Well, I think I think yeah, to touch on karma for a bit. I think if you put good energy out there in the world and you're trying to be helpful and not be an asshole, just be a nice guy, right? And like, you know, good things kind of happen, right, over time. And you'll have bad days. And I've had bad days in the industry. your bio actually mentions spectacular spectacular flame outs right alongside very happy LPs. Tell us about Mahendra R (14:08.891) Thank you, yeah, yeah, yeah, yeah. Yeah, yeah. Mahendra R (14:23.811) Ha ha. Brian Bell (14:24.585) A flame out that taught you the most. Mahendra R (14:27.03) Well, I think at the industry, Brian, we are, I don't know, embarrassed, ashamed to talk about failure, talk about losses. When we we blatantly say, Hey, nine out of ten companies that I invest in are gonna be complete losses. It'll be zero. Okay, so on one hand, yeah. Yeah, one to three X, whatever, but it's not it's not a venture scale, right? Yeah. Brian Bell (14:42.781) Or or close to zero, like one one to three X maybe. Like s yeah. Sixty percent zero, another ten to twenty percent, like one to three X kind of thing. Yeah. Mahendra R (14:51.914) Exactly. Yeah. So so, you know, here's sort of the the the mental sort of challenge. Okay. On one hand, we claim to be the smartest people on the planet, you know, VCs. Okay, maybe the founders are the smartest. We're right behind them. Okay. On the other hand, we say, well, nine out of the ten things I do are gonna be like absolute failures. Well, okay, then where where is that where is that reflection? Where is that money? Where are the stories? I think Bessemer or some of the funds have taken a a a leap Brian Bell (15:02.217) But founders are smarter. Yeah. Yeah. Mahendra R (15:21.322) in in sort of talking about anti-portfolio, which is another sort of topic about the VC sort of posturing, if you will. And I'm like, look, you know, not everything that I've touched has turned into gold. Yeah, I want to be on the Midas list and I am King Midas on some days, but on most days, I'm an abject failure when it comes to predicting the future. Okay. Brian Bell (15:41.365) Yeah, it's like, crap, that startup's going out, that startup's going out of business, right? That one's shutting down, that one's winding down. Mahendra R (15:45.005) Yeah. Yeah, yeah. So I think the flameouts sort of you know, and also by the way, early on in my career, I felt like no no no, we can we can control like if this is a science experiment, we can control the parameters, we can reduce the losses, etc. You know, now after having s been punched in the face so many times, I've come to the conclusion that Brian Bell (16:08.873) Mahendra R (16:11.854) There are more ways to fail and it it's sort of a humbling business. And in terms of flameouts, you know, the the best one that I can recall is this founder, amazing guy. His previous company was backed by every top name VC that you can imagine. Okay. His current company, you know, that I invested in very actively had a line of some of the best names in the industry. Okay. he goes on to raise over a hundred million dollars. Okay. So multiple, you know, seeds, CDs A, B over five, six years. The company's now approached you know, revenues that are approaching 25, 30 million. So this is not an AI company, obviously. In cybersecurity, 25, 30 million in revenues is real revenue, you know. And then there is this cash flow glitch that occurs, and within a week, the whole company is gone. Literally, we had to sell it for a dollar. So you could back the best people, they could Brian Bell (17:01.045) Wow. Wow. Mahendra R (17:06.222) Attract the best investors, they could build the companies and have the best customers, all of their product market fit, go to market, scaling works out well. And then there is this small crack on the on the ground that just sucks them in, you know. And so this guy, I mean, the founder, after eight years of working his tail off, walked away with nothing, you know. And so I feel like these kind of stories are always very humbling that we should Brian Bell (17:20.65) Yeah. Brian Bell (17:26.719) Yeah. Wow. Mahendra R (17:32.962) We should talk about more, we should sympathize with each other. I I don't know if we can do anything with that failure except at least emotionally support each other. Brian Bell (17:41.824) Yeah, and this is what I try to tell founders is like you are running the business very lean or or very rich, I should say. meaning that you're burning a lot of capital right now. and it's not very capital efficient. And then what can actually end up happening, I notice, is I think I think things in motion tend to stay in motion. What I mean by that is like if you have fast growth at the beginning, you'll have fast growth like later as well. If you're burning a lot of cash in the beginning, you'll tend to burn a lot of cash later as well. Mahendra R (17:52.738) Yeah. Mahendra R (18:01.73) Mm-hmm. Brian Bell (18:12.041) You know, and things kinda tend to like, you know, it's not like all of all of all of a sudden you're magically be going to become a founder who's very capital efficient, I've noticed. Mahendra R (18:21.964) I think Brian, you should you should absolutely trademark that. That's like Brian's three laws of venture investing that, you know, I y you're absolutely right. You know, you notice that pattern of behavior where if you see frugality, that behavior continues. If you see excessive I don't know, gluttony, you know, then you see that behavior play out as well. You're absolutely right. Brian Bell (18:29.876) Yeah. Brian Bell (18:39.285) Extravagant spending. Yeah. Yeah. I if they tend to build really large teams, they'll want to keep building large teams. And so you can actually, even in the in in that pre seed to seed, sort of see what kind of company it's going to be by just how like the founder behaves, what they say, are are their claims corroborated by the data room? Right. And AI makes that so easy now, right? It's like, okay, the deck said ninety two percent margin, but you know, I'm looking at the financials and it's fifty six percent, you know. Mahendra R (18:46.616) Yeah. Mahendra R (18:52.867) Yeah. Mahendra R (19:00.568) Yeah, yeah. Yeah, yeah. Brian Bell (19:10.119) And it's like, you know, I you know, like it it can find all those things. So speaking of venture capital, you've now written the business of venture capital four times across roughly 15 years, which is crazy. Here's the book. Everybody go buy it. the business of venture capital. What's changed the most between the first edition to the new one with with Tim? Mahendra R (19:10.408) Yeah, yeah. Mahendra R (19:24.418) Yeah. Mahendra R (19:37.241) So lots of things, of course, as you can imagine. I think the number one is that when you look back in time, it was considered to be like this craft, you know. Venture is like you know, you have a small group of people, small amounts of money. Exactly. Yeah. Exactly. Like the VC as a craftsman was like the the moniker. And of course, there were stories to support that hypothesis. If you look back into the Brian Bell (19:52.947) Yeah, you apprentice in the craft, like like you like apprentice to make shoes or something. Yeah. Mahendra R (20:06.818) the day and age of Kleiner Perkins, Genentech was literally, you know, with Bob Swanson and Tom Perkins, like they literally sat down and wrote the first plan, tandem, bunch of other companies that Fund One and Kleiner did fell into that category. From there to let's say Fast Power Today, where you have on one end of the spectrum, you know, Mas Ioshi San with Softbank, you have what the crazy experiment that Tiger Global did, you know. Thankfully they came and left, but it was like eighty four Brian Bell (20:38.549) They're still writing big checks, actually. I see him back in the market. I see I see him leading rounds now again. Yeah. Like Tigers back, Tigers back writing hundred X revenue rounds in the in the growth stage, you know. I certainly benefited from that back in twenty one. They had one, they they wrote one of our portfolio companies that we backed in twenty twenty. And then like it's series B, they wrote it at like I feel like it was two hundred X, you know, back in the the heyday of twenty one. Anyway. Mahendra R (20:41.462) Is that right? my God. Well Yeah. Mahendra R (21:03.756) Yeah. Yeah. Yeah. No, so I think that's you're absolutely right, Brian. The the fact that you have these large investors come into the game where they've realized that there is a lot of value to be captured in companies. And of course this other hypothesis that these companies should stay private longer so that the megafunds can also jump in and and collect the cream off the crop, right? I sort of have a have a slightly different view that look, when innovation occurs, everybody should benefit, including the public markets. But some of this large funds coming in and saying, Hey, why don't you stay private for longer while we scoop up all the value? I think that debate has two sides to it. Yeah. Yeah. Yeah. Brian Bell (21:47.018) Well, yeah. I mean, look at OpenAI and Anthropic and and SpaceX. They all they're all gonna IPO at one or two trillion. and you know, how many multiples from a trillion dollar company are you gonna have? Like it'd have to be a once in a in a civilization company to have a 10X from there, right? What once in a like a lifetime of a human civilization to become a $10 trillion company. And so maybe SpaceX is that in the future, right? Maybe it does 10x. Mahendra R (21:53.346) Yeah. Mahendra R (21:58.347) Exactly, exactly. Mahendra R (22:03.028) Exactly, exact exactly, exactly. And and so Mahendra R (22:11.038) Exactly. Yeah. Yeah. Brian Bell (22:15.367) maybe Anthropic and Open AI do that. But yeah, I think you're touching on a really interesting thing that the average investors out there, the retail investors that are parking money in index funds in their four hundred one K or, you know, target date funds are missing out, I think a little bit because those funds are not investing in the private markets as far as I know. Mahendra R (22:31.916) Yeah yeah, absolutely. Absolutely. And so I think as a social, if you look at if you zoom out and say as a social dynamic, I don't think that is a that's a good idea where a smaller group of investors try to scoop up all the cream and then once the companies go public, you know, to your point, like okay, from one trillion to ten trillion, is that a is that a multiple that you can logically sort of present to Wall Street? I don't know. And so this is you know, this is where greed has overtaken the business to an extent where it's almost becoming unhealthy. But again, who am I to to complain? You know, it's it's it's a natural evolution of capitalism, you know. Like they say in capitalism, I know that money is the answer, but what was the question again? That's Brian Bell (23:13.045) Yeah, I mean we certainly benefit Brian Bell (23:20.917) I love that. So what what makes you write another edition of a book? you know, I, you know, shameful plug here, but I I'm about to publish my book next month, LP, The Insider's Guide to Venture Capital Funds. And I'm already thinking about a second edition because there's lots of stuff I'm I'm I I left out or I didn't cover. At what point does the I don't know, the feedback or ideas kind of build up in your mind to where you're saying, Hey, I need to do another edition of this book? Mahendra R (23:49.305) So to be honest, Brian, when the first edition came out, I thought my job was done, this is out, and I hope the readers benefit, and so on. So now the publisher, you know, Wiley, which is sort of the world's third largest publisher, they keep track of how these numbers are playing out. And then I will occasionally get a call from, hey, the sales are doing reasonably well. we got a translation request from China. By the way, there's a Chinese edition. Brian Bell (23:54.986) Yeah. Book's done. Yeah. Walk away. Yep. Mahendra R (24:19.196) I for a moment felt like, a book about capitalism being translated into a communist regime with that's an interesting dichotomy in itself. But the publisher c keeps you posted of how things are progressing. And so there was a time when they said, Look, we need to do another print run, or you have a chance to update the the text and that becomes a second edition. And I realized that you know it was like four years, five years, and I said, you know, The stuff is old, and I kind of feel embarrassed that there are some case studies in in the first edition. I think there were case studies about Facebook and you know how Peter Thiel wrote his first $500,000 check and tells Mark Zuckerberg, like, you know, his diligence was like this one line, like, don't fuck it up. Okay. So now Facebook is. Brian Bell (25:06.741) Well and he most famously put that in his Roth IRA. Right? So it's it was Yeah. So funny. Mahendra R (25:09.93) Exactly. Exactly. They were smart enough to do that, right? So so I feel like these kinds of s scenarios were becoming a little stale. So content becomes stale very fast, data becomes stale very fast. And so I thought, okay, let me do a refresh. Now the problem with doing a refresh is that you think that this will just be like like if you have maybe, I don't know, chained the cabinets on your kitchen or made some small modifications in your apartment, you suddenly realize as you start the journey. Brian Bell (25:19.882) Yeah. Mahendra R (25:38.971) there is a rusted pipe behind that. You pull that out. Then suddenly you find like, the electricity is also the So suddenly like I pulled one piece out. Exactly, exactly. So the second edition for me was the most painful because I had to re-craft everything and it took like twice as long. But then then once I got the formula down, the third became a little easier. But every time the publisher would call me and say, Okay, we're four years into it and Brian Bell (25:46.111) Next thing you know, you have a st a stud down to the studs remodel on your hands and it's gonna take eighteen months. Yeah. Brian Bell (26:00.022) Mm. Mahendra R (26:08.61) We're going to do another print run. Do you want to you know put another coat of paint on it? And I'm like, okay, give me six months and I'll do it. And so, of course, as the business keeps evolving, the other feedback loop that you get is from people you meet. You know, thankfully, I spent some time at Berkeley where I had a chance to meet you. And they also give you feedback on how the business is changing. Like one of the biggest things that I should I wanted to include in this fourth edition was the fact that. For the first time in our careers, we've seen a venture fund getting acquired in its entirety by Facebook. You know, you might have read that little example of a small group of people created an AI fund and they were investing in literally some of the absolute frontier AI startups and they got acquired by Meta. You know, Mark Zuckerberg called the guy and said, We'll buy everything. And I like, wow, you know, this is another case study, but I could not include that. but at the same time, you know, sort of in this edition, we have a complete section on emerging managers. I also felt like the role of government, especially as as prominent funds are getting involved in Washington, DC, the role of government and policy, defense tech. You look at it in in many ways, and it's sort of beneath the surface. So You put that up front and center, there's whole chapter on the role of government. So we woven a lot of stories in there that I hope that the seven hundred and thirty-seven page tome will be of value to the reader. Brian Bell (27:41.91) Do you keep from being a curmudgeon VC? I've noticed that the longer you're in this industry, the more, I don't know, standoff, crass, and aloof you get. But you seem to be warm and engaging, even though you've been in the industry for a long time. Tell us about that phenomenon, the psychology of being a VC. Mahendra R (28:04.432) that's a great, great question, Brian. I feel like if you look by design, we are spending most of our day and hours with very smart people, but our job is to analyze, maybe criticize, again, look at numbers, look at data. So we're in our head most of the time. You know, it's sort of a a function that involves your full cognitive faculties, right? And if you miss, then you pay a dear price. But there is this theory about you know, open-heartedness, right? So again, back to the Eastern philosophies and culture that I grew up in. And then there are some of the the leaders in the business, like Jerry Colonna, you know, somebody I have deep respect and admiration for. He was a VC. He had a a seminal moment at 9-11. He was in New York. He saw the towers collapse, and that caused him to go through a lot of pain, grief. And then he changed and said, I cannot do this anymore. And so then he now he spends his time coaching founders. And so you feel like the the heart function that we have, which is nothing to do with analysis, nothing to do with criticism. In fact, it's only love, brotherhood, helping each other, caring for each other, you know, joy, all of these functions. And I feel like Unfortunately our profession forces us to be more cognitive and less heart centered. And if you don't go to the heart gym yourself, then you end up becoming a curmunch and that's just one of the theories I have. Brian Bell (29:40.554) Yeah, it's kind of like the the Kantian categorical imper imperative, which is not to treat people as a means to an end, but the end themselves. And I think I have to constantly remind myself that everybody that sends me a pitch deck or a cold email, or fills out my pitch form or gets a warm intro, all these founders, they're living their dream, right? And I don't want to shit on their dream. I want to be helpful. Mahendra R (29:48.662) Yeah. Yeah. Yeah. Mahendra R (30:04.578) Yeah. Yeah. Yeah. Yeah. Brian Bell (30:08.801) and so I go I go through the effort most times, probably ninety-eight percent of the time, of writing a nice pass email. Here's why I'm passing, here's what you can improve, here's what it would take for me to get to yes, even if the yes is very, very far-fetched. I will give them like, here is what I would need to see to say yes. And I tell and founders tell me, it's like, wow, you like that's the best feedback I've ever gotten. you've really given me a lot to work on and think about. And so you just try to, you just Mahendra R (30:15.48) Yeah. Yeah. Mahendra R (30:22.414) Yeah. Yeah. Brian Bell (30:36.533) pay it forward a little bit and just try to, you know, give them give them the feedback that they need, you know. Mahendra R (30:37.859) Yeah. Mahendra R (30:43.424) Exactly. And I feel like we as a as a set of call it professionals or practitioners or apprentices, I feel like what you just said, Brian, is probably one of the most important attributes. Like nobody teaches us the art of saying no. You know, there is an art form and you have to you have to build that muscle, you know. I still struggle with because I feel like I'm disappointing the person, I'm gonna feel bad, they'll how will they look at me, etc. And I feel like that is so important that you do it promptly, do it respectfully, and give them give them something to chew on. Like I feel like you, you know, the other the only firm that I've heard of that does it really well is NRECEN, because I've seen my founders approach partners at NRESEN and the kind of three-paragraph response they get. I mean, I've read that and I'm like, holy shit, this is this is called a respectful. Conscientious response to a fountain. Brian Bell (31:43.904) Yeah, because like you're putting like every touch point is a is a is a an opportunity to reinforce your brand and build a relationship. And you never know when that founder's gonna come back and and say, Hey, I have the next Uber. Right. And like, yeah, your your your last idea was shitty by the way, but yeah, I like this new idea. So yeah. Mahendra R (31:52.504) Yeah, yeah. Mahendra R (31:59.476) Exactly, exactly. Yeah, no, it's yeah. I think Roloff Botha, you know, who was at Sequoia, he said that in this business you make enemies faster than any other business, right? Because you know, you're saying no. And if you don't say it properly, you end up turning that person who could have been an ally into a potential enemy, like, what an asshole or whatever. You know, the other part is like the ghosting part that yes, we're busy, we have so much going on. Brian Bell (32:24.639) Yeah. Brian Bell (32:28.554) Yeah. Mahendra R (32:33.708) But you almost have to make a a a commitment to yourself, your future self, your present self to say, you know, I will if I take a meeting with a founder who's gonna spend thirty minutes describing their life's work in tensile, I should at least spend twenty minutes in a response that is crafted properly or ten minutes, whatever is there is no ratio asset, but yeah. Brian Bell (32:39.85) Yeah. Brian Bell (32:53.567) Yeah, f at least five or ten. Yeah. Yeah. Cause yeah, you can't spend a half hour on every deck that you see. That would be crazy. You know, we get we we probably get nine or ten thousand a year. And so at this point a lot of it is AI crafted, but the AI has been tuned on tens of thousands of deals, so it's really good feedback. yeah, and obviously I'll you know, if I've met the founder, I'll spend a little bit more time on it. But you advise sovereign wealth funds and public companies on launching VC programs. Mahendra R (32:59.261) Exactly, exactly. Yeah. Mahendra R (33:08.472) Yeah. Mahendra R (33:12.003) Yeah. Mahendra R (33:17.314) Yeah. Brian Bell (33:23.671) is everybody a a now? Mahendra R (33:26.606) Yes, of course. Who who who is not, Bri Brian? You know, with in this day off day and age of OpenAI and SpaceX and what is it, the boring company that Elon is working on. So yes, everybody is a VC now and very few have what I would call the the right mindset. You know, you have you need tool set, mindset, and you know. Brian Bell (33:33.011) Yeah. Brian Bell (33:40.745) Yeah. Brian Bell (33:56.222) Yeah, it kind of makes it hard for us to raise as emerging managers when everybody's a VC, right? Because you go, you go raise from an ex some exact number like, I'll just do angel investments. I'm like, okay, great. Okay. And then I go to a family office. we we make our own direct, you know, investments. okay, okay, great. Okay. And then I go to some, you know, Mahendra R (33:56.469) It's it's the attachment. Mahendra R (34:00.749) Yes, exactly, exactly. Mahendra R (34:05.034) Exactly. Yeah. Yeah, yeah, exact. Yeah, like you're the middleman, I'm trying to bypass you as quickly as possible. And I that's the unfortunate part is that this this business is sometimes seen as hey, they're just a bunch of middlemen and they're keeping their management fees and carry and Yeah. Yeah Yeah, we're here to destroy you. Yeah. Yeah. Yeah. Brian Bell (34:16.97) Yeah. Brian Bell (34:27.091) Yeah, that's what how Angelist looks at us. We're just middlemen to them. You know, just a means to an end. Yeah. They'd love to get rid of VCs and just collect all the all the fees like a Amazon dot com of of venture. Mahendra R (34:40.352) Yeah, exactly, exactly. Yeah. Brian Bell (34:42.793) But yeah, I think the truth is, is like if you think about, you know, you probably write about this in the book. I haven't read I haven't I haven't read the fourth edition. I I think I read the second edition like years ago. what differentiates a VC? Mahendra R (34:58.766) So now there are these theories. Brian Bell (34:59.871) V versus like somebody who can just cut angel checks or works at corporate venture or works at some sovereign wealth fund running a venture program or some family office. What makes a VC special and worthy of getting an investment versus just somebody just saying, I'll just do it myself? Mahendra R (35:17.566) And I think you touch on sort of the crux of both the opportunity and the challenge, right? I think it was Mark Andreessen who said that in California you need a license to drive a car or to buy a gun, but you don't need a license to become a VC. You know, in other words, you can hang a shingle, anybody can portray themselves as an adventure. Brian Bell (35:39.551) Technically you do have to file with the the you have it to get a C R D number and file with the state, but yeah. If if you or if you're if you're investing other people's money, yeah. Yeah. Mahendra R (35:45.549) Yeah. I think thankfully the SEC has Exactly, exactly. Yeah. So I think there is the SEC dynamic which sort of creates the bar or at least lifts the bar a little higher. But really, you know, posturing as an angel. I know a lot of people who posture as angels, but really they are writing a thousand dollar checks and five thousand dollar checks. And again, there is nothing wrong. Yeah. Yeah. Brian Bell (36:08.021) That's how I got started. That's a great way to get started. I t I tell everybody who's getting started, don't start writing twenty five K checks like I did with your own capital, because you're gonna run out capital really fast. R right? Yeah. Mahendra R (36:15.628) Yeah, yeah. It Exactly, exactly. And and you'll be stuck, right? So I think there is there is that how do you enter, but how do you set expectations and how do you build your own journey in in is scaling up? You know, so a lot of people, even before writing a thousand dollar check, I know a lot of people who would start off by saying that hey, I can be an advisor. Give me some advisory shares, but here are things that I'll do for you. The broke angel, exactly, yeah. Yeah. Brian Bell (36:39.209) Yeah, Jason Calicanus calls that being a broke angel. Broke angel. Yeah. It's like I have no money, but I will give you advice if you give me some equity. Yeah. Mahendra R (36:48.086) Yeah, I'll connect you with people, I'll do things for you, etc. And so I think there are many ways to enter this, but I feel like for an LP that is sitting in, I don't know, Zurich or Dubai or pick any parts of the world where there is a concentration of capital, but no not quite a concentration of startup, right? For them, you and I and everybody else are going to be like, Hey, you're just you know, a layer that I need to rip off so that I can go straight to the source. It's easier said than done though, because that's how a lot of people come to San Francisco and they think that getting getting access to some of these is going to be easy. So I feel like it's like coaching. Somebody described that, hey, anybody can pretend to be a coach for I don't know, minor league or any kind of kids school basketball. But if you really want to play the game with the big boys, then you are playing a different game. You're not in the minor league. People you surround yourself with, the way you conduct yourself, the kind of investments you're in, all of that speaks to the fact that there's a reason why you're at the table, right? So I feel like there are two sides to it where the access is easy, anybody can become a VC. But if you don't scale very quickly as a as a as an individual in the right groups, in the right kinds of transactions, then yes, you are then you're not really bringing something special to your investors. Brian Bell (38:15.093) Do you need to be in Silicon Valley, in the post COVID video calling era? I mean, you've kind of lived in both of both these eras, or can you, you know, be a VC from I don't know, Wyoming or something? Mahendra R (38:27.126) No, I I'm a firm believer that the geographic constraint is no longer as you know impactful. You know, in other words, you can be the Warren Buffett in Omaha, Nebraska if you do it well. Okay. So you have to build your strategy and say geography no longer is going to be my constraint, but I will counter it this way. Now, if you're a high high touch relationship relationship oriented person, you like to sit down. Brian Bell (38:55.657) Yeah, if you're gonna sit on boards and really be in the trenches, then yeah, probably be in Silicon Valley or or one of the major hubs like New York or even Seattle, Austin, whatever, LA. Mahendra R (38:58.924) Yeah. Yeah. Yeah. Yeah. Yeah. And in a way I feel like that's a good thing, Brian, because like this clubby mentality, you know, we we keep things in a certain way. We only talk to people we have had like, you know, six coffees with or twenty drinks with whatever I've gone to hikes with what there is certainly value in that because there are a lot of problems that occur in our business and we have to find ways to collaborate to solve those problems. And so I feel like that's the relationship side of the business. But in this day and age, I feel you could be in New York, you could be in any part of the world, and if you have a good strategy, you can play the game. Absolutely. Brian Bell (39:42.057) Yeah. for emerging managers listening, which you know, includes me, I guess. what's the most underrated? Yeah, we're all emerging. When are we no longer emerging? Is it a hundred million dollar fund and fund four or something like that? Mahendra R (39:51.107) We're we're all emerging, you know. We're perpetually emerging, you know. I don't I don't have a good answer for this one, Brian. Brian Bell (40:00.66) Yeah. It's it's probably once you raise institutional capital. When you get that first ten or twenty five million dollar institutional check, you're no longer emerging in my mind. Mahendra R (40:10.26) You could you could say that as a as a criteria. You could say the number of institutions in your LP side. So for some of the listeners who are not familiar with the jargon, you know, if you raise your fund with let's say twenty of your friends that are live in the neighborhood, that's that's a great start. But institutional capital, yeah. Brian Bell (40:12.767) Yeah. Brian Bell (40:26.185) Yeah. Twenty people you worked with in the past. Then that's probably your fund one or fund zero and it's it's a small fund and everybody's writing you a hundred K checks or whatever. Yeah. Mahendra R (40:31.469) Yeah. Mahendra R (40:35.01) Yeah, yeah. And and then the institution is where you have a you know an endowment or a public company or a large financial behema that has compliance, that is reporting, that is all of these criteria that come into play. And the sort of the soft you know line in the sand is that if you cross that and get maybe one institution, two institutions, then you're technically sort of now approaching, you have emerged, you're no longer a teenager, you're now sort of approaching adulthood, right? Brian Bell (41:03.903) Yeah, maybe you're what what are you after emerging emerging? Are you like now a developing manager? Or like manager emeritus? Or like what is the what are the life stages of a manager, right? recovering managers at the end. Like I'm a recovering, I go to managers anonymous. It's like my name's Brian Bell, and I'm a I'm a VC. Hello, Brian. You know, and I have to like Mahendra R (41:04.226) But I feel like Mahendra R (41:13.538) Yeah. Great, great. Yeah, it's like I so far it's like Mahendra R (41:25.4) Yeah, VC Anonymous marriage is anonymous, yeah, absolutely. Yeah. Please don't hold it against me. Yeah. No, but it's it's it's like it's like an addiction, right? You you get hooked to the adrenaline of opportunities, of investments, of LPs. and I think that if you cross the the institutional layer, that's one. But also they look at people like you and me and say, Hey, just being solo is not gonna cut it. Like, you know, during COVID, I got absolute blunt questions. This is no longer you getting hit by a bus, you dying of COVID. So I prepared, I remember I prepared this, like. Brian Bell (41:38.879) Yeah. Mahendra R (42:04.492) Five different steps that will trigger if I'm taken out by COVID. John will take over the bank accounts. He already has the power of attorney and so on. And this is how the portfolio, this is the data. So I literally like wrote this five steps to freedom for my LPs. And they still like you know, as I'm thinking about the next fund, people say, Wow, but you don't have a team, and then look at the color of my hair. And wonder like, okay, is this guy gonna die on me in the next ten year cycle? Or how is it just gonna play out? So I feel like yeah. Brian Bell (42:36.041) Yeah, that would be a yeah, a s like a yellow flag. Okay. Like is he gonna be alive in ten to fifteen years? Mahendra R (42:40.524) Yeah. Exactly. They they won't they won't ask the question, but you can read it in their eyes, right? So you you you yourself have to sit in their shoes, you know. We we I think the best form of ep empathy is to say, Okay, what would I do if I was on the other side of the table and say, Look, here are all the things I'm doing. I mean there are of course stories now like Ilad Gil is a solo GP with six hundred million, right? There is so many Salil who left Bain, you know, I think he's like a four hundred million dollar Brian Bell (42:57.695) Yeah. Brian Bell (43:02.281) Right. Right. Mahendra R (43:09.921) Solo GP, right? Brian Bell (43:10.079) Yeah, Charles Hut Charles Hudson's another guy that has, you know, he's on his fourth fund and has, I don't know, a hundred and seventy five million. So it can't be done. And, you know, I have forty million and I'm a solo GP. So I'm like kind of getting there. Yeah. Mahendra R (43:13.472) Exactly, exactly. Yeah. Yeah. There you go. There you go. So I I feel like, you know, you cross you cross a certain magic number or you cross a certain number of institutional or maybe you have a a army of people around you and suddenly people feel like, there is comfort in in this pack of wolves that I am going to be you know, supporting. Brian Bell (43:36.394) Yeah. How do you think about retirement? 'cause I was talking to my wife about this the other day, because these funds are 10 to 15 year funds. I mean, SpaceX was private for 24 years. you have to be thinking, I'm 46, so I'm a little younger, I think than you, but I have to think like, okay, at what point do I just want to go play pickleball and and sit in the sit on the beach, right? Instead of, you know, meet meet founders. And I love meeting founders. I don't know if I'll ever stop. I'll probably still write checks into retirement. A lot of VCs do retire. Mahendra R (43:44.972) Yeah. Mahendra R (44:02.712) Yeah. Brian Bell (44:05.555) And they keep writing angel checks. but at what point do you feel like I'm not gonna do another fund? You know? Like at what age is like I'm good, you know? Mahendra R (44:05.644) Yeah. Yeah. Yeah. Mahendra R (44:14.196) Yeah. No, I think that's that's sort of a a very good question because if you on one hand you can look at somebody like Vinod Kosla, okay. I would imagine he is in his maybe seventies. I I yeah. Yeah. I I'm fifty-seven, I'll yeah, I just rounded out to sixty to make it easier for everybody because it does not you know, beyond a certain number, you know, the difference between fifty-four and fifty-seven doesn't matter, right? I feel Brian Bell (44:22.357) Still still going. Yeah. Brian Bell (44:27.285) Yeah, at least seventies late seventies, yeah, mid to late seventies, yeah. Mahendra R (44:42.506) I feel like the notion of retirement is especially harder for people like us because on one side, we're sort of, I don't know, curious by nature. We're delighted by the way the world is changing. I love this listening to how founders look at problems, how they want to solve it. So there is sort of like a little bit of a dopamine rush that you get when you meet people who are way smarter than you. They are on the frontiers of technology, problem solving, and there's zero like lack of creativity in the way the world that we play in, people that we engage in, you know, have, right? So that becomes addictive. So now the question becomes like, you know, this notion of reading a book on a beach. I kind of fantasize about that, but 48 hours later, I'd be like, no, Brian, I need to get back in the ring because it's so addictive in its own way. Brian Bell (45:39.466) Yeah. I my wife and I are totally like this. Like we went on our anniversary trip to Bora Bora. So we're sitting on like the dock, like over the, you know, over the blue water. And we're just sitting there on our laptops, like getting work done. And it's like we're in Bora Bora. Like, what are we doing? Like go enjoy Bora Bora. It's like getting work done, like signing safes and wiring money and shit. Mahendra R (45:40.268) Now I find that they're pa Mahendra R (45:47.896) wow. Uh-huh. Yeah. Yeah. Mahendra R (45:58.319) Yeah, yeah. Mahendra R (46:05.422) Yeah. Yeah, that's the other thing is like the the business has these, you know, it could be flatlining and you you're just about dipping your toes in the water in Bora Pora and then you'll get a ping like, we need this in the next four hours. Like suddenly you have to steer Brian Bell (46:19.913) Yeah, yeah. Some some startups closing a series A and they need your signature right now, right? to close. and by the way, you have a little bit of allocation. So if you want to go talk to your LPs and get an S P V together, put some money in the round, crap, this is like so it's spinning. Yep. Mahendra R (46:24.255) Exactly, exactly, yeah. Yeah, do you wanna take it? Yeah. Mahendra R (46:36.29) Yeah, yeah. No, it's I think the notion of retirement is particularly hard because it's like we should come up with something like, you know, old musicians never die, they just continue to sing in their basement. We should come up with something like old VCs never die, they just continue to do deals, you know, one as angels, you know. Brian Bell (46:52.841) Yeah. Well, the you know, it's funny you mentioned musicians and VCs in in the same sentence because there's this theory of musician creativity that there is like this like window of time that musicians can actually create endearing original music. some musicians do it their whole lives, right? Some some composers have, but there seems to be this like 10 to 20 year window of you know, your twenties and thirties, maybe. But actually there's these studies where musicians actually started in their thirties and Mahendra R (47:06.432) Yeah. Mahendra R (47:10.264) Yeah. Mahendra R (47:23.704) Yeah. Brian Bell (47:24.807) Or even their 40s writing music. And it's that same 10 to 20 year window. I'm butchering kind of the theory right now. But there's also the same theory with VCs that there's this window in which you're, I don't know, young enough to relate to the 20 somethings, like starting original things like the Zuckerbergs of the world, but you're old enough to have the wisdom and experience. And there's this like this window, you know, that passes and eventually you're kind of like you're you're too old to relate to the young people. Mahendra R (47:26.23) Yeah. Yeah. Mahendra R (47:54.572) Yeah. Yeah. Brian Bell (47:54.666) And you're kind of out of touch. And I and I and I and I feel this as a guy in his late 40s, you know, 46, heading into my late 40s now, always been a tech nerd, always been very technical, you know, programmed my, you know, grandparents' VCR when was five, you know, that kind of person, right? and I can kind of feel this like thing happening in my life where I'm like, it's good enough. it's good enough, right? And I'm like, no, it's not good enough. I'm gonna go optimize every Mahendra R (48:06.68) Yeah. Mahendra R (48:19.928) Yeah. Brian Bell (48:24.447) freaking setting of this like, you know, thing I'm doing. Right. And and I think there it that there's a little bit of that kind of nerdiness that maybe as you get older, you're ten years older than me, you tell me like you kind of maybe lose it a little bit and you're just like, it's good enough. Right. I Mahendra R (48:27.533) Yeah. Mahendra R (48:32.781) Yeah. Mahendra R (48:39.916) No, absolutely. Look, I think the the parts that we fight to keep versus the parts of our journey that we need to welcome. I mean, you you stated very eloquently that you know, you want to sort of make this trade off between what is good enough versus what you should continue building. So ten years later, Brian, I can assure you that that feeling will shift. And and one of the ways I've found some you know solace, consolation, or way to way to continue to play the game is to say, look, take the analogy of a of a tree. Okay, the the sapling grows very fast, it looks very beautiful, people you know put more water, more fertilizer, then it starts to show some flowers, people get excited, then it starts to show fruits, and people want to eat the fruit. And so those are sort of the productive years. But, you know. sequoia tree or as the tree gets older, you know, the wrinkles on my forehead, there is shade that you can offer, right? There are so many things that that you can do in different stages of the journey. And so I feel like at this stage of my career, you you touched on wisdom. Yeah. So Brian Bell (49:51.114) can muck up your pool 'cause I'm a big tree, right? I have trees all o all over around my pool and it always mucks up my pool. But anyway. Yeah. Yeah. Mahendra R (49:57.741) There you go. There you go. It's like d depending on where the tree is, it could actually be helpful. So I find that many times, of course, money will always be valuable. And I think the way you've built your platform, I feel like it is far more resilient to some of these challenges of you know, human evolution or aging, etc. Because your platform is almost like an engine. And so, hey, I'm I'm YC. I need money and Team Ignite will always be there. I'm right at the top with Andreason as the one of the most active firms, right? So those fundamentals that you've designed will play to your advantage for sure. Then the question becomes, where do you as a human being engage? And and that's the the beauty of what you have developed is that you can move in and out of different zones. Whereas others who don't have the platform, you know, their their options are far more limited. Brian Bell (50:47.593) Yeah. I could easily just hire a GP and step away at this point and and and just take carry and management fee and just like put plug somebody in. But then I it'd be like losing part of myself because it's it's such a machine, like you said, like that's running with 400 startups and thousands of VCs and 17,000 people on Team Ignite and the Ignite media and the podcast. And so it just it's just sort of just churns and it's all these flywheels are going and I have all these like AI powered operational. Mahendra R (50:52.323) Yeah. Mahendra R (51:02.85) Yeah. Mahendra R (51:14.872) Yeah. Brian Bell (51:17.641) workflows going and and it's what I did at Microsoft, you know, when you're when you have dozens of people working for you and you're scaling thousands of companies and startups in the Microsoft ecosystem, you have to have rigorous, you know, walking decks and playbooks and process and prioritization to kind of do that. And we did that all pre AI, by the way. This is like 2019, 2020. and so now with AI, it's way easier, right? You just build you're like, hey, hey Claude, I'm doing this repetitive thing day after day, like Mahendra R (51:17.667) Yeah. Mahendra R (51:37.6) Wow, yeah. Mahendra R (51:42.358) No absolutely, absolutely. Brian Bell (51:46.013) Help me code something to, you know, do that automatically. That's it. Mahendra R (51:49.859) Yeah. Yeah. No, it's it's also sort of one of the most fascinating times to be alive as you see how technology plays out. One of the ways I have sort of constantly steered into areas is that like for example, everybody knows VC is a two-sided marketplace. Okay, on one side you have founders, on the other side you have LPs. Okay. We're middle one, right, exactly. So one of the challenges that I have taken on is that Brian Bell (52:10.985) Middlemen. Yeah. Yeah. Yeah. Mahendra R (52:18.092) I've been very good at one half of the marketplace, which is finding founders, you know, working with them, generating returns, IRR, DPI, T VPI, all of that is in my opinion, what I've done. I'm I'm fairly satisfied with, and some of my LPs are. But the part that I have continued to struggle with is you know, what you touched on is like breaking into the institutional categories of LPs. Okay. So now I said, okay, I'm gonna take that on as a challenge at this point in my career. where nobody's gonna balk at my age. They will actually see that as a plus. They'll welcome me to hear, you know, the decades of experience and so on. Now they do wanna see like, do I have a team? Do I have like a you know proper systems, controls in place, et cetera? So as you progress too, you can say, okay, this is one area where I'm gonna take it on as a as a challenge and see what can be built because each of us, you know, can go through the journey in our own little mind map and say, Hey, that's one corner that I could go into and see what comes up. Brian Bell (53:22.931) It's tough. Yeah. I mean, I'm kind of in that transition now. if not fun four, maybe fun five, but it's a it's a whole different level, right? I I have to pull out my like my corporate version of myself. You know, when you're talking to institutional LPs and institutional LPs, what's funny about them is they don't have their own money on the line. It's their job. Right. And so you have to remember that you're actually not talking to somebody who's putting their own money on the line, they're putting other people's money on the line. you know, some pension fund or Mahendra R (53:31.32) Yeah. Mahendra R (53:35.02) Yeah. Yeah. Yeah. Mahendra R (53:43.02) Yeah, yeah. Mahendra R (53:49.174) Yeah. Yeah. Brian Bell (53:52.256) Wealth fund or family office even. And so it's like their job. Sometimes they're in not even incentivized to have returns. They're just incentivized to like, I don't know, make good investments, make their boss look good or whatever. It's like it's like it's a whole different kind of animal. and yeah, it's it's hard to make that transition. Mahendra R (53:58.411) Exactly. Exactly. Mahendra R (54:08.194) Yeah. Mahendra R (54:12.948) In fact, two two narratives that I remember from talking to institutional LP, like I remember this one gentleman who bluntly told me that you are a career risk for me. And I'm like, I I'm gonna I'm gonna accept the no as an answer, but help me understand what he just said. And he said that look, if I invest in you and you screw up, I will lose my job. Okay. Brian Bell (54:27.369) Yeah. Mahendra R (54:38.85) Forget the returns, but I'll lose my job. So I'm not gonna do anything that is going to you know, so self interest comes first. So that was one intr interesting sort of nuance. Exactly. Brian Bell (54:39.177) Yeah. Yeah. Yeah. Brian Bell (54:47.497) Yeah, it's it's almost like it's the same reason big corporations end up not going after new markets because their salary depends on them not failing. Right? not understanding the new market. My I I just I don't know how to do that. Like I don't know how to invest in emerging managers because like if I screw up, I'm gonna lose my job. Mahendra R (54:55.584) Exactly. Not failing as opposed to winning. Exactly. Exactly. Mahendra R (55:05.62) Exactly, exactly. So I think that was one. The other part that I discovered, which was again through like having this long dinner, and then you know, sometimes people will say something and you latch onto it and say, Okay, what does that mean? So now this person was an employee in a large institution. So, you know, they get a salary, but they don't get the kind of upside that people like you or I would get when Brian Bell (55:07.935) Yeah. Mahendra R (55:33.311) company goes public or you get 16x outcome, whatever, right? So they still get their salary. Now they do get a pat on the back from their boss or chief investment officer, but they still get their salary. So I remember there this guy very sort of bluntly saying that he was almost mad at the the all of these people getting rich while he's still stuck in that role. And so I remember telling him that look nothing is stopping you from stepping on the other side. But remember that there is risk involved. You'll have to go without you know money for long periods of time. You'll have to keep fighting the fight for a very long period of time. If you're just seeing the fact that the VC just made a ton of money and you're sort of almost envious or mad about it that you're not making, then then you're not being fair to the to the journey that VCs are going through. So look, if somebody gets if a if an institutional LP is just plain envious about the fact that you guys are making a lot of money, it is That's a tough problem to solve. You cannot solve it, you know. Yeah. Brian Bell (56:32.703) Right. Love that. So you've started teaching venture capital at Berkeley. What's tell us about that experience versus, you know, writing books and making investments and raising money. Mahendra R (56:46.562) Yeah, again, that was like a like an accident that one accident leads to another. So the whole journey of writing books was an accident. And now that book landed in the hands of Greg LeBlanc, you know, who co-directs the course. and so Greg has this podcast where his his threshold is that you have to have written a book to be interviewed on his podcast. So somebody recommended my name. I was on a podcast with him, we were having fun, just like how you and I are. Brian Bell (57:09.46) Yeah. Mahendra R (57:15.478) And then sort of one of the outcomes of that was like, hey, we should do something together. I said we can do a lot of things together. And that's how we sort of then started to banter around and we did one last year. And so technically, for me it's more like volunteering because there is no financial you know reward for me in in going to Berkeley. I do get this chuckle that Berkeley is probably one of the only universities in the world. That has an entire parking lot reserved for Nobel laureates. And I'm like, I get to feel good about myself while I'm parking, not in that parking lot, but in the adjacent parking lot. And I get to feel good about myself that I can take this experience and then find ways to share it with the people. Just like you did, where you know, I remember when you walked away, a lot of people in the room were like, Holy shit, Brian's model is exactly the opposite of what everybody else is doing. We should follow T McKnight. So it's always fun to see these sparkles that occur in Yeah. Yeah. Exactly, exactly. Brian Bell (58:16.693) Well, 'cause you were there all three days, right? And I kinda came in as the last speaker of the three days. I think I was the very last speaker, and I just came in with a completely different message and a completely different way of doing it. Yeah. Mahendra R (58:25.77) Exactly. So you broke you broke everything. So I feel like that's the joy of being in a in a in a group of young people where where our job is now to say, hey, look, there is a car, there is ski, there is a horsebuggy, there are all of these different ways you can go from point A to B. Exactly, exactly. Exactly. Yeah, you can roll, keep rolling, exactly. Brian Bell (58:43.881) Lots of w ways to glide down the mountain, right? You could ski down the mountain, you could snowboard, you could sled, you could fall. You could take the gondola, you know. Mahendra R (58:54.702) Exactly, exactly, yeah. Yeah, yeah, yeah. Brian Bell (58:55.775) Lots of ways to get down the mountain of venture capital and and startups. That's funny. Yeah. And and you know, it's just the way I do it, right? It's not like it's the right way to do it. It's just the right way for me. you know, I wish I was just doing thirty investments of in an AI like per fund. That'd be kind of easier. But it yeah. Mahendra R (59:05.453) Yeah. Mahendra R (59:13.314) No, I and I feel like we need more people like yourselves in the business who can break what I describe these artificial boundaries. So for example, how we came to this notion that t the portfolio of 20 companies, give or take five or ten, twenty-five, is is risk diversified. Okay, all LPs love it, everybody follows that rule, but nobody questions that rule, right? Nobody qu why is this? Brian Bell (59:29.779) Yeah, yeah. Twenty to thirty, yeah. Yeah, why is it that way? Yeah. Yeah. Why is it that way? Yeah. It's just like, well, it's just the way we've always done it. Like, why did you why have you always done it that way? So this is what's interesting because I came in orthogonally, like from industry. you know, with the CFA and the Wall Street background and, you know, product marketing. A lot I have this like very kaleidoscope of like experiences. And I just said, okay, so why 30? Why 20? You know, Mahendra R (59:42.414) Well yeah, exactly, exactly. Exactly. Mahendra R (59:48.3) Yeah. Yeah. Mahendra R (59:59.085) Yeah. Brian Bell (01:00:05.451) just like that's the way we do it. And I'm like, okay, well, this is pre-seed. How many companies get pre-seed funding every year? like 10 or 20,000, depending on the data set you look at. Okay, so we're gonna invest in 20 of those, 30 of those over three years. Okay, so and what at what rate do companies become billion dollar companies? Well, depending on the data set you look like, look at one to two percent. Maybe for YC it's four or five, six percent. And so I'm like, okay, well, okay, so you're telling me one out of fifty, maybe one out of twenty companies I meet. Mahendra R (01:00:13.464) Exactly. Mahendra R (01:00:29.538) Exactly. Brian Bell (01:00:35.293) Is going to become a billion dollar company, but I'm only gonna invest in, you know, one out of thousands of companies I meet, you know, like it doesn't make any sense. and and and actually, if you run the math and the and the Monte Carlo math on the probability distribution, which I have on my website, the power loss simulator, you know, I just built a Monte Carlo tool and I said, okay, well, if what do, you know, holding everything else consistent, you know. Mahendra R (01:00:43.854) Yeah. Yeah. Mahendra R (01:00:53.826) Yeah. Brian Bell (01:01:04.159) Deal flow, your selection ability, your ability to add value, even follow-ons is is an independent variable that you can you, you know, you can move, which is a different part of the tool. What is the optimal size of the portfolio for early stage? and it turns out it's it's like probably like a thousand. Just that's what the math says. And you you sort of start asymptoping at three X at like a hundred, and you start asymptoping at five X at like, you know, four, five, six hundred. Mahendra R (01:01:17.698) Yeah. Yeah. Mahendra R (01:01:22.316) Yeah, there you go. Yeah. Brian Bell (01:01:33.639) And you start asotoping your 10x probability of a fund at like a thousand or two. You know, and why and YC does eight hundred a year. Right? Mahendra R (01:01:42.263) Exactly. Exactly. I I think the rules, if the game is changing, you need to adapt with the game. And I feel like you're one of the few people who is applying that rigor of, hey, this is pure math. You know, you can we can debate on the Monte Carlo, but that's the data set. We can debate on the asymptotes, but that's the data set. Like what are you gonna debate on? And by the way, the the myth that that prevails in the VC that we as GPs have the secret superpower to pick Brian Bell (01:01:58.496) That's what the math says, yeah. Yeah. Yeah, it's just Mahendra R (01:02:11.394) The unicorn. I think there is so much bullshit there that is being propagated. Nobody knows. Nobody knows. And by the way, we have, I think venture capital, generally speaking, is this fantastic machine that looks in the rearview mirror and can rationalize all the luck, all the mystique, and say, well, I could see it in this guy's eyes that he's going to be, come on, give me a break. Brian Bell (01:02:14.879) So much bullshit. Yeah. Everybody's fooled by randomness. Yeah. Brian Bell (01:02:37.491) And there are there are some investors historically, you know, Vinode is one, the benchmark guys, you know, some of the A sixteen Z guys, Sequoia, obviously, that have been able to hit a unicorn hit rate at a little higher rate, but it's not much higher than the industry average. Three percent, maybe instead of two percent, you know. Mahendra R (01:02:55.276) I would argue I would argue, Brian, that yes, they have a better hit rate as a virtue of their brand and capital, but our business is very opaque, right? We are equally adept in hiding and burying our mistakes so fast that nobody has a full data set, right? And then the question becomes like, okay, if nobody has a full data set, and if I'm just marketing my successes, then am I really being Authentic, or is there some some gamesmanship going on? The reality is there's a lot of gamesmanship in our business. And and look, we're paid to be marketing geniuses, right? Whether we're marketing ourselves, marketing our successes, marketing our portfolio companies, right? So we are exactly, exactly. Yeah, we should stop kidding ourselves. Yeah. We should stop kidding ourselves that we are these, you know, some technological geniuses that are you know bringing fire from the gods to mankind. Like, no, you know, we are middlemen, you know, no. Brian Bell (01:03:34.909) Salespeople basically. Yeah. Basically salespeople. We're selling founders on taking our money and selling LPs on giving us money. Yeah. Brian Bell (01:03:53.844) We're capital allocators, to use a term that is kind of come into the industry's like guys in last few years. We allocate capital, right? And some of us do better than others because some of us have better deal flow than others, and some of us are better at picking and some are better at adding value. But I think you kind of gotta know where your strengths and weaknesses lie. and and kind of choose your path. Mahendra R (01:03:54.07) On the same token. Yeah. Mahendra R (01:04:01.931) Exactly, exactly, yeah. Yeah. Yeah. Yeah. Yeah. Mahendra R (01:04:14.338) Yeah. Yeah, absolutely. And I remember this one one debate that I was having with a founder who was particularly sort of like angry, you know, at this sort of like VC class, and you know, you've probably heard this commitment of a chicken versus commitment of a pig, you know, which roughly translates to like, I am dedicating my life to this company and this is all I do. And you have a portfolio of you know 20, 30 companies, and and hence you're not as committed. Exactly. Yeah, yeah. And my pushback, you know. Yeah, but that's about it. Yeah. Brian Bell (01:04:46.495) The chicken's evolved and the pig is committed, is the is the phrase, yeah. 'Cause the chicken can like give some eggs to the cause. but the pig's getting slaughtered. Yeah, the pig's getting slaughtered, yeah. Yeah. Mahendra R (01:04:55.616) Yeah, but yeah, but exactly. Exactly. And and sir, my pushback to him was like, hey look, we're all making choices, right? I'm not forcing you to be a founder. I and I'm choosing to be a VC because I'm not as bold as you are. I am not as clever, adaptable Yeah. Yeah. Brian Bell (01:05:05.066) Yeah. Brian Bell (01:05:10.069) I wish I was a founder. That's what I tell founders. I wish I was a founder. Like the way cooler. Like if I could focus on one idea that I that I fell in love with for the next 10 to 15 years of my life, I that that would be great. I'm actually jealous. My wife is a founder. and she's having a great time. I just like she's working really hard, but I just see her having success now. And I'm just like, I'm so jealous. That's so cool. And I I, you know, I I have to go look at another 50 pitch decks today. Mahendra R (01:05:18.092) Yeah. Yeah. Yeah, yeah. Mahendra R (01:05:25.602) Yeah. Mahendra R (01:05:29.1) Yeah. Yeah. Exactly, exactly. And and so the Yeah. Brian Bell (01:05:37.139) Which I love doing 'cause it's like what I like doing, but like I you know, I think it'd be much cooler to be a founder of, you know, some really cool AI unicorn, you know. Of course. That's way cooler. Mahendra R (01:05:45.795) Yeah, exactly. Yeah. This is the this is the time. Yeah, yeah. And it's sort of the way we sort of concluded that that debate or you know, like chicken versus pig was look, we are adults, we're all making choices. I'm not forcing you to be a founder, you're not forcing me to be a VC. We are making choices based on our skills, our resources, our abilities, etcetera. So It's kind of wrong where you take a a pot shot at me to that, you're a VC and you're not committed. Like, no, I'm hundred percent committed to making sure I can do what I do best, which is generate returns for my LPs, at the same time serve my founders the best of my ability, right? So it Brian Bell (01:06:22.631) And stick a bunch of fine print in the side letter. No, I'm just joking. I'm joking. We don't do that. We don't do that. So you read another book? Brazilian Founder? Mahendra R (01:06:25.652) Yeah. y yeah, so the resilient founder is another one, and then startup boards is the is one where Brad and I sort of got to hang out a little more. But the resilient founder, you know, this came out of this very difficult emotional challenge where I lost one founder to suicide. And it was, you know, we as VCs all talk about value add and we're the first call that founders make when they are in any form of difficulty. I mean this founder Brian Bell (01:06:35.241) Wow. Brian Bell (01:06:48.531) Yeah. Yeah. Mahendra R (01:07:00.846) Trust me, Ryan had some of the best names on his captive. It is just, yeah, just crossed, like I would say, series A-ish. Okay. And the hypothesis was really bold, where you could do some work on genomes and DNA, and it could literally change the world. It was that bold of hypotheses, okay. And so this founder passes away, and all of us are in a state of shock, and then you start to see what's going on. Brian Bell (01:07:04.563) On the cap table and yeah. Mahendra R (01:07:30.302) And so then somebody told me that, this founder was struggling with you know, emotional and mental health issues. And so then I started to talk to founders and found out that this is like the dark side of of the valley or startup culture where nobody wants to talk about these things. Brian Bell (01:07:44.553) Yeah. Yeah. Brian Bell (01:07:49.984) So what do we do as VCs? I mean, I think we all say the same thing to our founders, which is you can always call me, you can always text me. here's you know, here's my number. And you know, I've taken calls late at night, I'm sure you have too, weekends, you know, all that stuff. if I'm on the cap table, like I'm in it to win it with you to the end, right? We like, and I think any founder listening should know that about their VCs. you know, I think the other thing we have to be careful of doing is beating ourselves up about Mahendra R (01:08:03.372) Yeah. Mahendra R (01:08:07.2) Exactly. Exactly. Yeah. Yeah. Yeah. Brian Bell (01:08:19.519) people's mental issues, right? Mental health issues. I I just I lost a a dear childhood friend which I posted about on LinkedIn. because I felt like, you know, the world had to know, you know, that I felt terrible, but there was literally nothing I could do. Right. Sometimes you are just powerless. And I and I think I think we're all just kind of searching for a way to, you know, stay in control and and be helpful. But Mahendra R (01:08:23.476) Exactly. Mahendra R (01:08:28.473) Mahendra R (01:08:37.438) Exactly, exactly. Exactly. Brian Bell (01:08:48.985) you also have to love people and and let go sometimes too, right? And be available, but you you know, you just can't fix people either. You know, like I'm not I'm not a mental health, I'm not a counselor, you know, I don't have a master's in counseling or whatever. So, you know. But there are there are resources out there. Like if you are listening and you are struggling with mental health, please, you know, search up those resources and call somebody. Mahendra R (01:08:56.414) Exactly. Exactly. Yeah. Mahendra R (01:09:04.396) Yeah. Yeah. Brian Bell (01:09:18.717) You know. Mahendra R (01:09:19.01) Yeah, yeah. No, I think you know, it's like a two sided anything else, like any any other relationship, if we see signs of struggle, we can do something about it, but the other side ha also has to I would say open up or you know, share or engage because what happens in these situations is that people tend to shut down completely. They will withdraw, go into a shell, and so on. And as human beings, we some of us will make a little effort, some of us will make a lot more effort. And the more effort you make, the more some of the the people who are struggling will tend to withdraw, right? So we're not trained, like you correctly said, we're not mental health professionals. We're not trained to be counselors. We don't know exactly what to do in these situations, right? And so I feel like it's it's it's a it's a big challenge. you know, the part of the responsibility does lie with the founders, but also like there's a section at the end of the book, like how to care for somebody. And this was by talking to spouses and mental health professionals that I wrote the appendix in terms of how to care. And there's this wonderful somebody sent me this wonderful poem about how to care. And it's almost like like when you walk into a room. And this person is lying on the bed, enter very quietly. Don't make any noise. Okay. And then sit in the corner very quietly. Don't rattle them. Hey, hey, how can I, how can I, you know, just sit quietly. If they open their eyes and they see you and they close their eyes, just keep sitting there quietly. And then if they ask for, hey, can I get a drink of water? Then stand up and help them. So I feel like this this style of helping is not something that we're accustomed to, we're trained for. It's it's you have to be invisible but present and it's very hard, you know. I wish I wish we had more resources. I wish we as a community of professionals and practitioners would dedicate more time and and resources to help the founders. But again, it sort of your LPs will never reward you for for saying, you saved a life, but your DPI sucks. Brian Bell (01:11:27.603) No. Tell me about your mental health programs is never a like a never a phrase I've ever heard on an LP call. Tell me about how you're supporting your founder's mental health. Never heard that. Mahendra R (01:11:34.592) Exactly, exactly. Like yeah. Yeah, exactly. Your DPI sucks but he saved a life. Here let me give you more money. Said no LP ever. Brian Bell (01:11:41.609) Yeah. Yeah. Yeah. My DPI is amazing though. so what do you what are you excited about over the next, you know, the coming years? You've done a lot in your career and probably still have a lot more to do. Like what are you excited about over the next, you know, five or ten years? Mahendra R (01:11:57.613) No, thank you, Brian. nowadays I'm I'm more about gratitude and l less about excitement. So and of course, as you get older, you tend to look in the rear view mirror a lot more than you look at the the the front, right? and so of course, you know, being an eternal optimist, I feel that AI is such a fascinating you know, tectonic shift. Brian Bell (01:12:22.461) What's AI stand for again? I'm sure I'm checking. Mahendra R (01:12:26.502) something about you know aggregated something aggregated average of intelligence. No. But but I feel like you know, rarely do you see these tectonic shifts and so having experienced that in the in the heart of the region and seeing how it's Exactly, exactly. Yeah it's internet, the cloud, now AI. It's it's a fascinating time. Yeah. Brian Bell (01:12:31.925) Aggregated something, yeah. Integration. Yeah. Brian Bell (01:12:47.103) Yeah, we both lived through the like internet revolution, which very much felt like a a big, big platform shift. Cloud and and mobile, but AI is going to be bigger than all of them, I think, because it sort of permeates everything that we do as a society. and it you you see it in the numbers. It's the productivity gains are there, the the EBITDA margins are there, and the S S P five hundred, although well, we'll talk about, you know. Mahendra R (01:13:01.176) Yeah. Yeah. It's it's it's Brian Bell (01:13:14.791) AI is not working. It's like, no, it's working. There's a lot of look at Team Ignite, right? Like we run the whole thing on AI. And then I see founders, you know, just a couple, couple kids with a laptop get to a million of ARR without raising money because they can agentically code everything and deploy everything and distribute it. And so yeah, we're I I love to tell the story of you know, when I was born in 1980, the average bank it took like Mahendra R (01:13:28.47) So I I Brian Bell (01:13:43.126) I forg I forget the name I'm I'm gonna butcher the numbers, but it took like a thousand people to run the average bank. What with the average AUM. Yeah. And now that AUM, the average AUM with the bank has somewhat doubled or tripled, but the number of people working at per per that level of AUM inflation adjusted has gone down to like 19 people. And that's just through software, right? That's just software like leverage, like leveraging. Mahendra R (01:13:47.446) Wow, you're kidding me? my god. Mahendra R (01:14:04.492) Wow, amazing. Yeah. Yeah. Brian Bell (01:14:11.101) our our our human drives and and what we need to get done. AI is like another order of order or two of magnitude of of leverage. Mahendra R (01:14:19.126) Hundred percent, hundred percent. And I feel like the way you have designed your platform, and this is this is the feedback I got from the class as well after you finished your talk, it's like so on one side all of this AI is happening, and on on the other side, all of the VCs are doing exactly what they did twenty years ago. So, you know, when you think about automating and bringing Brian Bell (01:14:27.968) yeah. Mahendra R (01:14:41.206) Efficiency and technology into the game. I feel like what you're doing is clearly on the frontiers of of that sort of innovation. The second point is like everybody talks about this one person billion-dollar company, right? There'll be one person who can orchestrate all the agents, orchestrate so many different yeah. Brian Bell (01:15:00.649) You could argue that was OpenClaw already. OpenClaw got acquired for a billion from OpenAI and it's just one guy, the Peter Ste Ste Steinberger, what his name was. We've already had the one person unicorn outcome, technically. Yeah. Yeah. And we're gonna see more of those. Mahendra R (01:15:08.364) Yeah. Yeah. And and then there is that another one. Exactly. Exactly. So the chances are that that one person Exactly. We'll see more of those and the chances are that a lot of them will come from YC, right? So when I think about hey, look if I'm sitting in Dubai or Riyadh or Zurich or somewhere and saying okay, I need access to the YC, you know, good luck. You're not getting on the invitation list because there is a five criteria that they have established to very crisply to get investors in the room and how you behave, how you add value. Brian Bell (01:15:40.053) I have LPs ask me this all the time. It's like, hey, if I invest in your your YC fund because funds one and three are YC funds, can I go to demo day? And I'm like, no, they will not let you there. They will you cannot go to demo day. It's like a small, I mean it it's it it is a zoo there. It's like a thousand people, but it's a it's a curated zoo of people. Mahendra R (01:15:47.086) Exactly, exactly. Yeah. Mahendra R (01:15:57.943) Is a curated zoo and a lot of the as you and I know, a lot of the good deals are already funded before they come to demoday. And you're on the top of that list, right? So you've found a way over the years, you built your relationships, you've demonstrated with numbers. And so I feel like as the VC model evolves, I mean we're we suck at innovation as practitioners, but you're I'm glad you cave from outside the industry. You are Brian Bell (01:16:08.905) Trial and error. Yeah. Yeah. Mahendra R (01:16:22.328) doing things that are very unconventional to the industry. And like as I was joking with you at the end of your talk, like there's a whole book to be written about what Team Ignite can do in in terms of innovating in the venture capital model. Brian Bell (01:16:34.761) Yeah. Yeah. Maybe I'll write the book someday. the first book's LP and I gotta it was a lot of work. it took me a year, even though I used AI a lot in writing the book, obviously and researching the book. I was able to draw on basically the dozens of conversations I've had like this. You know, I've you're like episode three hundred and three, right? So I have dozens of con conversations and I just pulled them into the context window and I was like, Okay, what do people think of this issue that that have been on the podcast? Mahendra R (01:16:37.516) Yes, you should. Mahendra R (01:16:43.928) Yeah. Mahendra R (01:16:49.73) Yeah. Yeah. wow. Yeah. Mahendra R (01:16:59.266) Yeah. Yeah. Brian Bell (01:17:02.281) was able to very quickly write the book. But I'll have to decide. I was I was thinking about my next book might be called Timing, which is like famous examples of timing, like nailing the timing of an investment versus really missing it. You know, like Web Van versus Google, you know. Google like Web Van was like really early, right, to market. They built a bunch of infrastructure, didn't work out too early. Google was really late to the market, but had, you know, the right team and tech behind it. That was kind of a Mahendra R (01:17:08.351) Mm-hmm. Mahendra R (01:17:16.215) Yeah. There you go, yeah, yeah. Yeah, yeah. Yeah, yeah. Mahendra R (01:17:30.754) Yeah. Brian Bell (01:17:32.337) a shift. So I've been thinking about writing like a book on timing or maybe a book on yeah how to evaluate startups because you know I've I've trained this AI now over tens of thousands of deals to yeah. Just write write the book. Right here's how I here's here's how we've learned with AI to evaluate startups. And I could write a whole book on that. yeah. Mahendra R (01:17:40.941) Yeah. Mahendra R (01:17:45.422) I think that's your superpower right there, Brian. yeah, that's the fact that you have yeah. Mahendra R (01:17:53.963) Yeah. And in fact, I would just say like if you think about how you've built your whole platform, that itself is like the future of how you draw the Venn diagram of technology and investments and and exactly right. So what you've got f eighteen thousand, do I remember the number correctly? Like Brian Bell (01:18:09.845) And network. Yeah. Brian Bell (01:18:16.681) Yeah, it's seven seventeen thousand one hundred and something today. Yeah. It and it just kind of keeps going. I don't I don't even try to grow it anymore. Like people just find me and it's a flywheel going. Yeah. Yeah. At first it was like a lot of networking. You know, six years ago I was like, Hey Mahendra, do you know anybody? You know, like like it was a lot of that, right? And and now it's just sort of just goes. Yeah. Mahendra R (01:18:19.584) Wow. It like keeps growing exactly. Yeah, it's it's got a flywheel effect, yeah. Yeah, yeah. No, that's fascinating in fact. Mahendra R (01:18:34.07) Yeah. Yeah. It's quite amazing. It's quite amazing. You're like a solo GP for lack of better term that has been able to build this and it's it's remarkable actually because one of the few people because if think about it, a lot of VCs will be afraid to do these kinds of things because it's you know it could make them useless or it could effectively bypass them, it could create so many. inherent challenges to self interest, right? So thankfully you've you've been able to bypass a lot of that. Brian Bell (01:19:05.011) Yeah. I always try to do the right thing. I think it's always like, you know, I go back to the ethics of, you know, would I want something I'm doing being printed on the front page of X or the New York Times or something? And it it like if if s some journalist covered my behavior in some story, would they conclude like he did the right thing and you know? so I'm always trying to think about that. Like I had a deal unwind recently. Mahendra R (01:19:17.908) Exactly. Yeah. Mahendra R (01:19:27.757) Yeah. Yeah. Uh-huh. Brian Bell (01:19:34.698) You I didn't I didn't have to return my management fees on the SPV because technically I manage the SPV. But we had to return some capital. And I was like, you know what? The the right thing to do here is return the management fees. It's a bunch of money out of my pocket, but it's the right thing to do. You know, so like like that's that's what you have to do. You have to just go, what's the right thing to do here? And you know, I think so many people are playing a a a single turn game in game theory, and it's really a multi turn game, right? Mahendra R (01:19:40.354) Yeah. Mm-hmm. Exactly. Yeah. Exactly, exactly. Yeah. Mahendra R (01:19:58.979) Yeah. No, a hundred percent. You know, in fact, another GP that I talked to who had a similar situation where they did not take management fee for several years because it was just being conscientious of the fact that you're going through the jerk j curve, all the money is going out, and till the time my investors don't make money, I'm not gonna take money out of the fund. And then later on I asked her after about four or five years, so how did your next fund LPs react? And she said something that was you know not not surprising. She said, none of them cared. They just assumed that, yeah, none of them cared that the fact that you've been starving and not taking any money, they just assumed that, we don't care. Like, what's the DPI? And so she was a little disappointed about the fact that people care only about. Brian Bell (01:20:40.829) They don't care. Yeah. They signed up for you to take your management fees. Yeah. Brian Bell (01:20:52.723) Yeah. Mahendra R (01:20:55.906) parts of it, but they don't look at the human being, their set of behaviors, and especially how they behave when nobody else is watching. Yeah. Yeah. Yeah. Brian Bell (01:21:00.469) At the end of the day, it's all DPI and IRR. It's all DPI and RRR. It's like how fast did you get the DPI? And, you know, you know, look you look at SpaceX, you know, private for 24 years, huge outcome. You know, if you're a seed investor in SpaceX, you know, whatever the valuation was 30, 100, there's all kinds of conflicting valuations. But any anyway you slice it before dilution, you're, you know, tens of thousands of X. After dilution, you're maybe 10,000 X or something. But it took 24 years, right? Mahendra R (01:21:13.272) Yeah. Mahendra R (01:21:26.124) Yeah, yeah. Yeah, exactly, exactly. Can you yeah. Brian Bell (01:21:29.299) And so your IRR actually in that that situation is very high for the individual deal. But if you're in a fund with dozens of deals, you know, just that one deal returns a hundred X's to fund, maybe, or eighty X's to fund and it's something like a twenty percent IRR, which is incredible for one deal. So that's the power law, right? That's that's what we're all that's not what we're all gunning for and hoping for. That we get one of those trillion dollar zero to trillion stories, you know. Mahendra R (01:21:37.005) Yeah. Mahendra R (01:21:45.922) Yeah, yeah. Yeah, exactly. Exactly. Mahendra R (01:21:55.436) Yeah, yeah. Brian Bell (01:21:57.991) I really I really enjoyed the conversation. I you know, we could keep talking for another couple of hours. I have to have you back on at some point. where can folks find you online and and find your books online? Mahendra R (01:22:07.746) No, thank you, Brian. First of all, it was an absolute delight talking to somebody who has had such a range of experience as well as depth. online. I'm on LinkedIn. the books are on Amazon. And of course, I certainly appreciate any feedback from readers as as they go through it. Brian Bell (01:22:25.705) Well, thank thanks so much. Really enjoyed the conversation. Mahendra R (01:22:28.281) Thank you, Brian. Thank you.