The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:15:21 · Harry Stebbings
[00:15:21] S1: Is there a period where more work is not effective? Like, when I think about sixteen to eighteen hour days in that environment, dude, I'm masochistic to the extreme where it's unhealthy and alcoholic, bulimic, tortured child. I mean, fuck. I'm like Lindsay Lohan Adventure. But when I think of even, like, me in that, I would not function well there. I need fresh air, exercise. I just have to.
00:15:46 · George Sivulka, Harry Stebbings
[00:15:46] S0: Yeah. Ultimately, I probably went too hard. My hindsight's twenty twenty. I think I think I definitely left nothing on the table to a point where it was detrimental to my health. But at the same time, I think that that was, like, a crucible where it it helped form me. It's very hard to be a founder, and those are the moments where you're just, like, you're eating microwave meals every single day and, like, you're just losing weight and you're trying to will something into existence. I actually was trying to pitch one of my former bosses at a professional services firm, and he looked at me on the Zoom call and he almost cried. And he was like, just come work here. Like, what are you doing to yourself? Like, just don't... Like, come back. We'll give you, like, a proper salary. Like, you don't have to do this. There's so many low points like that, and and I think, you know, I just kept on on chewing through it and and, yeah, raising money in the closet. I I actually got on with for... We raised a pre seed from from Peter Thiel and and and Floodgate and then our seed from Mike Volpe at index. And Mike was like, hey. We're gonna do a partner call just to... As a formality with a few partners just to close out. [00:16:44] S1: Is Volpe. [00:16:45] S0: This is Volpe. Yeah. So Volpe is like, there'll be a few partners on this call. [00:16:49] S1: What round is this for?
00:16:49 · Harry Stebbings, George Sivulka
[00:16:49] S1: What round is this for? [00:16:50] S0: This is a seed. So it's a follow on to the pre seed in, like, November of, I think, 2020. And I get on the Zoom call, and I've I've literally got, like, clothes hanging behind me. And they're, like, all of a sudden, Mike shows up and then four other partners and then 80 partners and, like, the the Zoom screen tessellates with, you know, hundreds of faces, and I'm, like, horrified at the fact... And Mike's like, look. He's living in a closet. And everyone's like, ah, great founder. And I was so embarrassed, and then and then I pitched my company. Honestly, hilarious. [00:17:19] S1: Yeah. I'd say I I just wanna unpack that element there because I said... I I can't remember who it was who told me I had to ask, but they said I had to ask about driving to Peter Thiel's house.
00:17:28 · George Sivulka
[00:17:28] S0: Well, so so I was saying two months prior, again, I think I was at Stanford or or just about to leave Stanford, and one of my friends had interned at Founders Fund. And he's like, hey. I hear you're raising financing. You should talk to Peter. And I was like, well, I'm not gonna say no to that. And so he introduces me on an email thread with me and Peter. And I'm like, hey, Peter. Would love to do a lunch or dinner. I'm not a morning person. So I was like, Peter would love to do a a lunch or dinner anytime soon. And Peter was like, I can do a breakfast. I was like, I really wanna do a lunch or dinner. You know? Like, can we do a brunch? You know? He's like, I'm gonna do a breakfast. And so I said, well, that's that's fine. And he gave me a slot on a Saturday. And so got in my car. That was an old, like, beat up 2006 Audi convertible that I had, like, fixed up from Craigslist and bought for $4,000 at three in the morning and drank a bunch of coffee, like 18 cups of coffee, like a five hour energy, like, all the disgusting stuff, and drove from three to eight to his house to go and pitch this guy. And he... I think he showed up forty five minutes to an hour late. He's, like, just waking up, and I'm I'm wired. I'm, like, sitting in my chair, you know, like, ready to go. And it was supposed to be a thirty or forty five minute breakfast. I was like, it's kind of already shot. But we ended up talking for, I think, like, four or five hours about not only the company and all of the the the flaws that I had in my business model, but then also math and and and deep esoteric philosophy and, like, just the world. And he said, you know, I'm not investing at the time because it was coronavirus and a variety of other factors, but I'd love to put in a check. I got out of this conversation thinking I had just made a friend or was seen from someone who's incredibly, incredibly, incredibly bright. And, I'm I'm leaving his house, yeah, I felt like I was inducted into the Illuminati. I was like, whole... Know, drop top, the sun's shining. I was playing Kanye West. I drove out as as as, like, my first offer from a venture investor.
00:19:13 · Harry Stebbings, George Sivulka
[00:19:13] S1: How much did he invest? [00:19:15] S0: I think the the total round was, a million dollars. So it's like it's like nothing. [00:19:19] S1: Yeah. But What do you think makes Peter so incredible? [00:19:22] S0: There's two things. He is incredibly ontologically smart. And so he he can build this worldview or this perspective of the of the world where, like, he actually just, like, knows how to pattern match to a variety of other things. But then he's also, I think, phenomenologically smart, which is the idea of, like, he understands processes and how humans behave really well. And so he's always thinking like, hey. You know, ex ante or or, like, you know, if if I'm looking at something that's about to unfold, could I have predicted this ahead of time? And he always just asked himself that question. So he's built up a really rich perspective of of the the fallacies that human society has, memetic behavior that that people kind of go out and and and copy each other with, etcetera [00:20:02] S1: and etcetera. So we then have money from PETA, and we have the PETA TEALS stamp of approval. [00:20:06] S0: Yeah. [00:20:07] S1: Does that open every door in the valley? [00:20:08] S0: I I mean, I think we were in late discussions with a lot of investors, and then everyone else was like, yeah. Let's, like, you know, let's pile on in here. It's, you know, it's some of the best money that you can get, and that was that was a game changer for us. [00:20:19] S1: So then we closed with Maples and Floodgate. [00:20:21] S0: Yeah. It was Anne Anne at Floodgate.
00:20:21 · George Sivulka, Harry Stebbings
[00:20:21] S0: Yeah. It was Anne Anne at Floodgate. [00:20:22] S1: Okay. Anne and Floodgate and and Teal. And then we get back to work. Mhmm. And we've got a million or so. [00:20:28] S0: We've got a million. And then two months later, Mike actually hears about Hebiah from his daughter who was a Stanford student. And I think I've seen the product, was friends, and and then Mike actually comes in and is like, hey. This is completely different than Elastic or all these other search technologies that I've seen and invested. Obviously, he's on the board of Elastic today, so he's like, well, let's just go add some fuel to the fire. [00:20:49] S1: How much did he invest then? [00:20:50] S0: He, I think, invested, like, an additional 2 or $2,500,000 at [00:20:54] S1: the time. So where did the 130 come from? [00:20:58] S0: Well, as as years later. You know? This was [00:21:00] S1: years later? [00:21:01] S0: So this is all in 2020. We we end up building a product studio, which is the first to productionize RAG, retrieval augmented generation, also in 2020. We build the first semantic search engine. We actually go out and and search Can [00:21:16] S1: you just help us understand? What is RAG? [00:21:19] S0: RAG is an acronym that stands for retrieval augmented generation. If you look at large language models today, they're really good at at maybe thinking if you give it the right context, but they hardly ever have the right context. And so Rag was the first real attempt to give them the data to answer questions correctly. [00:21:38] S1: Okay. And so we are building on Rag to start?