Maniacs, Fund Math, and 2AM Texts
Tomorrow, on Not Another CEO, David Politis swaps seats and interviews me about backing maniacs and the fund math of inception
TLDR: David Politis, Founder & CEO of BetterCloud, swapped seats with me and interviewed me on his podcast “Not Another CEO.” We talk about maniacs, fund math, and what I actually owe founders after the check clears.
At 16, I asked an angel investor to sign an NDA before pitching.
He drove up to the coffee shop, heard the ask, and walked out.
Got in his little convertible. Never came back.
I remember thinking “who is this guy, why does he get to decide who gets funded and who gets to build the future?”
That’s when I decided I wanted to be the one deciding, and now, twenty-plus years later, I’ve made over 200 inception stage investments.
🎧 Tomorrow, on Not Another CEO, David Politis asks me about them. Don’t subscribe to hear from me, do it for the community David has built.
A Quick Reminder on Who David Is
In January, on Further, Faster David told you what it took to survive 2008. Term sheet gone overnight. Payroll on the line. Money as oxygen.
He’s the guy who took BetterCloud from nothing to a $750M acquisition. Three companies, $1B+ combined. Now he’s building Not Another CEO, one unfiltered episode a week, legendary guests, and the real lessons on company building from the people who have actually been in the thick of it.
On tomorrow’s episode, he asks me the questions, but this post really isn’t about me, it’s about what David is building for founders. Beyond the media and into the weeds with operators, Not Another CEO is building a community and platform that every founder should be paying attention to and learning from.
I’m just happy to be part of it, and a few teasers from tomorrow’s episode below.
1. “My Brand Is Backing Maniacs at Inception”
I don’t mean crazy. I mean people with a deep relationship to the problem, front-loading their time before there’s a team, a product, or anyone watching.
There’s an order to how I test for it. Psychology first. What made you who you are. What’s the hardest thing you’ve survived. I ask about childhood almost every time, same one or two questions, over thousands of meetings, on purpose.
“I want to understand who sounds and acts, and is different than other people.”
Then obsession. I ask why, and why again, and see how deep I can take someone with an interrogation. Last is execution. What have you shipped? Over what period of time?
Spike in all three, or be an outlier on one, and I don’t need the pitch deck yet.
2. “I Work for You”
Every founder hears the same thing from me on day one.
“When I’m on your cap table, I work for you. Text me, call me, any hour of the night, whatever you need.”
Some take me up on it. I’ve got founders texting me at 2am, and I try to respond instantly. Most don’t, and I think that’s a mistake. The best founders I work with don’t ask for vague help. They ask for a specific intro at the right altitude, and they make it obvious the ask is worth my political capital.
3. “At Minimum, You’ve Got to Be Shooting for $3-5 Billion”
Here’s the math that eludes most founders until someone tells them directly.
Thrive put roughly 80% of one fund into Instagram. That fund returned. A16z put money into the same company, in the same round, but spread thin across lots of positions, and put up a 0.5x DPI. Same company. Same outcome. Completely different result for investors and LP’s, because concentration decided who got paid.
If I own 10% of your company after dilution, I need you at three to five billion just to get my money back once. Not to make money. To break even. Founders almost never hear this, and it explains a lot of investor behavior that otherwise looks strange.
4. Why Antler Makes 200 Bets, Not 20
We also got into why the best storytellers, not always the best operators, are the ones getting rewarded in this market. And why Antler runs 200 bets in a single fund instead of 20.
It’s not spray and pray. It’s an insurance policy and a lottery ticket. Enough diversification that the fund performs at a relatively high floor, wide enough that we don’t miss an outlier. That’s a very different math than most seed funds run, and it’s the whole reason the model works.
This was just the surface.
Six months ago I was asking David about 2008. This week he asked me about maniacs, childhood, and fund math.
🎧 Full episode goes live tomorrow on Not Another CEO.
If you missed David’s episode on Further, Faster in January: Don’t Die. Don’t Overvalue. Don’t Stop.
And if you want the same no-fluff conversations every week, in your inbox: subscribe to Not Another CEO.
See you Monday.