Primary Venture Partners Jason Shuman on integrating partners into an established partnership, KPI's on measuring value to founders, and views on portfolio construction.

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape. Today, I’m excited to bring you my conversation with Jason Shuman, a partner at NY based Primary Venture Partners. The firm leads seed rounds for companies in NY and has previously invested in companies such as Jet, Mirror, and Latch. The firm recently raised two funds totaling $200MM. Prior to joining Primary, he spent time as Chief Of Staff for GLG founder Mark Gerson, was an associate at Corigin Venture, and founded and ran a company called Category Five from 2011-2015.  We chatted with Jason about the importance of culture in building lasting teams, KPI’s for delivering founder success from their internal portfolio services team, and how he views both NY and the entire venture market today.  A message from our sponsor: Pacific Western Bank is a full service commercial bank with over $34 billion in assets. The venture banking team specializes in financial products and services for startups, venture-backed businesses, and their venture capital and private equity investors. The experienced team is committed to the space and dedicated to delivering high-touch, tailored solutions, helping innovators take their business to the next level. In the first half of the year, the venture banking team has booked over $800 million in new loan commitments to help support the community.  No matter the size or stage of your business, you can expect guidance, resources and flexibility, making them the perfect team to support your evolving needs. Turn your vision into reality with PWB. For more information, visit www.pacwest.com/lending-solutions, or follow us on LinkedIn and Twitter. *Equal Housing Lender & FDIC insured *Total assets & loans booked are as of June 30, 2021. In this episode we discuss: 01:44 Jason’s journey into the startup world 04:37 What he learned in working with GLG founder Mark Gerson 07:05 The decision to join Primary versus starting his own firm 11:42 How Primary was able to seamlessly integrate him into the partnership 14:37 Jason’s advice to someone who is joining a successful venture firm 17:42 Why being selective and keeping a smaller portfolio is important to Primary 21:23 Primary’s philosophy on building a team 24:31 The KPIs Primary uses to assess whether they are delivering value to founders 27:21 Why Primary has decided to remain geo-focused on New York instead of expand 29:41 How Jason views speed versus diligence when investing in today’s marketplace 33:41 Thoughts on the seed market in 2021 37:15 The most counterintuitive lesson he’s learned as an investor 38:03 The investment miss that he’s learned from 39:54 The investor that inspires him Mentioned in this episodePrimary Partners I’d love to know what you took away from this conversation with Jason. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter. Transcript: Samir Kaji: I am Samir Kaji, your host of Venture Unlocked, the podcast that takes a behind the scenes of the business of venture capital. On this week's episode, I'm thrilled to bring you my conversation with Jason Shuman, a Partner with New York based Primary Venture Partners. The firm leads seed rounds for companies in New York, and previously invested in companies such as Jet, Mirror and Latch. Earlier this year, the company raised two funds totaling $200 million. Before joining Primary in 2018, he spent time as Chief of Staff for GLG founder Mark Gerson, was an Associate at Corigin Ventures and founded and ran a company called Category Five from 2011 to 2015. I found Jason to be really thoughtful and we had a great conversation on things like finding alignment when you join a firm, the tangible KPIs they use to measure success and what type of value they're providing founders and his view of New York and the market as a whole. Now let's get into the episode to hear all of that and more. Samir Kaji: Jason, it's so great to have you on the show and thanks for joining us. Jason Shuman: Thanks for having me, man. Appreciate it. Samir Kaji: Let's go back a little bit. I know you're now investing out of fund three, but what led you into becoming a venture investor and getting interested in startups? Jason Shuman: Yeah, so I'm from Boston originally and I grew up in a family of entrepreneurs. My dad was running his own company, my aunts and uncles, my cousins, it felt like everybody was running their own thing. So I became obsessed with startups when I was pretty young, like literally in middle school, I was writing business plans for mobile payments on flip phones. And in high school I went to work at this identity theft protection company that was run by my aunt and uncle. And they had a former VC from SoftBank working over there at the time and I just learned a ton from them about A/B testing and customer acquisition and LTV. And I just became a total nerd around startups more broadly, which ended up taking me down to the University of Miami for college, where I studied entrepreneurship and marketing and launched my first company, which was direct-to-consumer footwear company back in 2011. Jason Shuman: It was good timing, but pretty bad execution if I could say so myself. So when you can't operate, go ahead and invest, is sometimes that I joke about, but literally about a year out of school we had gotten the thing around profitability, but co-founder breakups, cashflow issues with that company, I just decided to wind it down. I couldn't imagine myself really doing it for the next 10 years. And sitting there as a 23 year old in Boston at the time at home, I was like, "What do I want to do next?" And I didn't have the confidence to start a new company and I didn't know if I really wanted to go operate at a friend's company, but this thing called venture capital became super interesting. Really at the beginning, it was for four reasons. The first one was I could learn about different industries nonstop and I'm a huge nerd and so doing that was great. Jason Shuman: Number two, is I wanted to be able to fundraise easier and number three was really that I could meet a better team for the next time around. And you only know an A-player when you've seen it. And I felt like the VC would put me at the forefront of meeting some of the best operators really in the world. And lastly, venture really aligns with my why in life. And I'm sure we'll get more into this, but the idea of being able to go help others, give them the confidence, the skill set, the tools, the relationships to live a more successful fulfilling life, venture really aligns with that. So I drove for Uber at night and sourced deals during the day for free and eventually found myself getting a 90 day trial offer from the guys over at Corigin Ventures to be their first hire and the rest has been history. Samir Kaji: So you started at Corigin which at the time was the venture arm of the parent company. Ultimately did that for a while and worked then I think with Mark Gerson of GLG. You and I have talked about that offline. That was an interesting experience where you got exposure to a lot of different things. It wasn't just traditional venture. Tell us a little bit about the experience with Mark. Jason Shuman: Mark Gerson's an incredible guy. He did an incredible job building GLG to the behemoth that it is. I would say the quiet behemoth that it is actually in New York City being a billion dollar plus market place business. But he's also an incredible philanthropist and he has his hands in so many buckets. So when I came over there to really get the family office stood up, I was doing a slew of different activities. One, was venture capital investing, the second was we were working on incubating companies. The next was LP investing. We had some philanthropic efforts that I was involved in, in Israel and Africa. And then the last thing that I was supposed to be doing was spinning up a mentor network between ultrahigh net worths and pro athletes. Jason Shuman: So one of the first people that actually we onboarded was a guy by the name of Kevin Beacham who has gone above and beyond all expectations that I ever had in terms of his investing career now, and really become like a brother to me in many ways. But about six months into that gig, I actually got pulled into a portfolio company of Mark's to operate again. So at that point I was doing both operating, raising some capital for the company and also investing in startups. So it was a heck of a time and it really made me have a lot of empathy for founders, even more because of the fact that during my first startup, I didn't raise venture. But during that one, I was a big part of the process and going out and fundraising. Samir Kaji: It's such a unique experience to be able to run so many different things from investing directly in early stage startups to doing LP investments, to working with debt funds. And you probably learned a lot of how the investment world works and the fact that there are so many ways you can make money and there's so many ways to capitalize companies. At a certain point, you probably were deciding like, "What do I do with my life and on a go-forward basis?" And where you spend your time. You ultimately went to Primary Ventures. And my presumption is that there were a lot of things that you've learned during your time with Mark that really shaped your view on the type of firm you wanted to join. Walk us through exactly the decision model you had of "I'm going to join Primary, not another firm, not start my own." What was that like and take us inside your head at that point. Jason Shuman: Yeah. So I need to give credit to Ash Egan. He had actually just launched his own fund Acrylic, which is in the crypto space, but Ash and I were having a conversation when I kind of hit this point that I knew I wanted to move on. I knew I wanted to go back into venture full time. And I went through this exercise that was like, "what do I want out of my next gig and what do I want to optimize for?" And I went down to my notebook and I wrote down the different types of funds that fundamentally existed at seed. And on one side of the spectrum, you have these funds that are like, "Spray and pray, come over here, hustle your butt off, go and network nonstop, but write 250K checks and 30, 40 companies a year." Jason Shuman: And you're networking mainly with VCs because at the end of the day, that's where you're probably going to get a lot of your deal flow from. On the other side of the spectrum, I was like, "do I want to go to a multi-stage fund? These guys are starting to come down the stack and they're starting to get some seed practice going and do I want to start that for them?" Because I've always considered myself relatively entrepreneurial. But then in the middle of the spectrum was the absolute sweet spot and what I love. And honestly, life is too short for you to do something that isn't what you love. And that sweet spot for me was high conviction, hands-on investing at the seed stage and that meant leading deals, and it meant leading very few deals a year. Jason Shuman: And so when I drew each one of those buckets, I wrote the firms down below each one of those buckets that I knew, or that I had worked with. And in one day I had sent out about 35 emails to folks saying, "Hey, so-and-so, I've really enjoyed getting to know you. I'm thinking about my next move would love to have a conversation." Now that weekend, I got a phone call from Luke Schoenfelder at Latch. And he said to me, "Hey man, I think you really need to talk to Ben and Brad. They just announced their second fund, $100 million from an investment strategy perspective. You guys are super aligned and they're just great humans." And so I met up with Ben at Le Pain Quotidien on Broadway and 21st that morning and what was supposed to be like a 30 minute meeting turned into two hours. Jason Shuman: And what I realized was that from a strategy perspective, we were literally the most aligned that you could get. I mean, fundamentally we believe that at the earliest stages, there's many ways to make money, but startups are hard and founders deserve better. So if we're focused and we're pushing them to be focused, we need to be even more focused. So it's like we're New York only, we're seed only. We only lead and we're trying to bring a tank to a knife fight. Like we invest more in our portfolio impact team than anybody else. And when I was looking at funds in full transparency, there was a few that I was at the offer stage with. Jason Shuman: And some that were even giving me offers to make more money or have a better title from day one. But when you have two firms that have the exact same AUM and one firm has a team of 13 people, and out of that more than half are on portfolio impact. And the other firm is only a couple of GPs and a platform person. I said to myself, "which side of history do I want to be on?" And ultimately I am where I am today. Samir Kaji: Looking back then you sort of go through this decision model, which sounds very thoughtful, right? You've kind of forced rank what you cared about. You had this view that Primary in itself, and the partners were just incredibly aligned with the way you thought about it. But going into a new firm, especially a firm that's already established, you a couple partners with Ben and Brad that had worked together for a long time. And a lot of firms have struggled with integrating new senior investment professionals having a seat at the table and having a culture. How did you yourself think about those intangibles when joining? What has Primary done right to be able to integrate new people in a way that provides really long-term viability and the right culture? Jason Shuman: Ben and Brad get a ton of credit for this. I think it starts with trust. When they go out to find new people to bring on the team, the interview process is not just about getting to know you as a person, but it's getting to the place where they feel like they can really trust you. If I can give a piece of advice to young investors that are going into a firm with an established partnership, it's really that the skill of, "getting a deal done," is really about trying to help build consensus. And if you can't build consensus, it's about articulating your framework from an investment evaluation perspective and getting people to see your point of view and your perspective. At the end of the day, we have an investment framework internally where we write down a list of got to believe in any investment and it's like, if you believe in X, Y, and Z, then we should be doing this investment. And the thing is in a diligence process, maybe two out of the three gotta believes you can diligence and check that box and say, "that's obvious. Let's just say that's completely obvious." But the third one is the one that gets debated the most. And at the end you never know, one person could be right and the other person could be wrong, but this is the type of business where we're arguing about things that nobody really fundamentally knows the answer today. Jason Shuman: And so if you're working with people whose point of view you trust, and you think they're really smart and they worked their butt off and have learned through years of experience, then you're going to give them the leash. And to my credit, I think to Ben and Brad is that they've given me the leash to really go out and try to get deals done and to win the trust of entrepreneurs and to work super closely with them. I hope that I've proven them right in giving me that trust and I hope that continues. Samir Kaji: It's also a challenge on the other side of the coin. If you're entering into an established partnership to have, in some ways, the confidence to be able to have a voice at the table, imposter syndrome, I think, is a very real thing for a number of people. In fact, I would say the most, the majority of people in the industry have some level of imposter syndrome, regardless of how successful they've become. It's even tougher the longer a partnership has been around, the longer those people have worked together. What advice would you impart to somebody that's joining a successful firm with an established partnership in overcoming some of those things that relates to imposter syndrome and just integrating with a new set of family members? Jason Shuman: I think it requires two things. One, the education piece that I just brought up, I think is really important. Angus Davis at Foundation, I think did an incredible job at bringing his partnership up to speed on the challenger bank space. And he was able to essentially just show them the deep dive in the work that he put into really figuring out everything and anything he could about the space and showing them the framework that he had. And by being able to do that, he was able to build trust and I think their conviction in him. In terms of how to completely remove "imposter syndrome," I think imposter syndrome is one of those things that most seed stage investors can have it, but it probably is going to end up lasting your entire career. Jason Shuman: And the reason being is that when you look back on your best investments, good luck trying to connect all of the dots aside from the fact that the people were really, really good and the timing was really, really great and the market was really, really big. If I can get this one piece of advice across it's, you're being paid for your opinion. Ryan Freedman said that to me super early on when I was at Corigin and said, "I'm paying you for your opinion." And that was on day 15 of my job sitting in an office and I really didn't know anything. And ever since then, I've started to just continue to think and reframe imposter syndrome where it's like, "You know what, everybody's an impostor," because most people, especially at seed, yes, there is skill. Jason Shuman: And yes, you're putting yourself in the position to succeed and you're meeting the right founders and you're getting into the right circles. But if you look back at all of these investment theses or the investment memos on certain deals that worked out, maybe 50% of it's right. Maybe 80% of it's right. So you just don't know. And I think the more that you can get comfortable with the unknown, which I know we all like to control as much as possible because most of us are type A, but the unknown is real. So imposter syndrome will either continue to persist or you should believe it's fake. Samir Kaji: And it's probably something that all of us have to get comfortable with to a certain degree and understand why we're in a certain position to be able to provide those types of opinions, knowing that we're going to be wrong a lot and that's just the nature of the business. Speaking of the business itself, you mentioned something that I found really interesting, and I like it, which is bringing a tank to a knife fight. I would say the world has evolved so dramatically over the last 15 months or so that you could probably pack in multiple lifetimes. The game of venture has changed with so many different firms, company formations, valuations, and it feels like we're entering an environment where funds have to sort of adjust how they approach winning deals. You've taken at Primary, fewer companies per portfolio indexing heavily on a team that helps these entrepreneurs. Tell us why that matters so much today. Jason Shuman: Founders are getting married to venture firms for the next 10 years, right? If they're successful. And at the earliest stages, there are many things that a founder at the seed stage cannot afford. They're not going to be able to go out and hire a Chief People Officer who has scaled the company from 20 to 500 people. They're not going to be able to hire the Chief Revenue Officer from a company that's scaled to $200 million of ARR. They're not going to be able to hire the CFO from a company that got acquired for $400 million. These things just aren't resources that they can get on their own, but they are resources that we as Primary have and will continue to invest in and bring full-time onto our team so we can provide those resources to the companies that we're trying to work with. Jason Shuman: So when we meet with founders not only are we introducing them to Rebecca Price who came over from Capsule and Enigma, or Cassie Young, who came over from Sailthru and CM Group, but we're introducing them to the other three people on our market development team who are going out and helping you as sales and go to market and the two other recruiters and community people, and the person on the marketing side of things that can really help them think about things in a way that they probably wouldn't be able to, without the resources that we're providing them with. Jason Shuman: The other thing I will say is that as a young partner at a fund, who's trying to win deals, having these people by your side, who by the way, are 100 times better at the things that they do than I am. And I don't care which fund you go to who the partner is, unless they've done that job, specifically that job, not the CEO done that one job, they're not going to be better than their old CRO most likely in scaling up the function. So by applying these people from a value add perspective, it makes it easier for me to win deals. And then at the same time we fundamentally believe it's great to bring on board what's called board partners who are folks that can come into the boardroom alongside people like myself to provide that other support in the boardroom. Jason Shuman: And those are people like Scott Norton, who started Sir Kensington or Jason Harinstein, who is the CFO over at Flatiron Health. These are people that are going in alongside us and trying to provide even more pointed feedback because not only have they seen the earliest stages, but they've seen the latest stages and have been in the weeds and more recently. So if there's anything we can do to help a founder get 10X the value out of us and not just us as a one single person team that's exactly what we're going to optimize for. Samir Kaji: There's something embedded in there that speaks to being a service provider versus just a pure investment firm. And I've always said that as an investor you're selling a commodity, which is capital in markets that are like the ones today where founders have so many different options, you have to actually provide something above and beyond that consistently. And it has to actually be meaningful to founders. And I want to get into this a little bit more because there's a lot of skepticism because a lot of venture funds say, "We add value beyond the investment." You've built a team around certain capacities that drive value to these founders. The first question I have around that is, how did you think about which pain points you wanted to solve for in recruiting that team that you built? And you mentioned some of those, but tell us a little bit about what went into that team build. Jason Shuman: I can't take any credit for it because it happened long before me, but fundamentally from a framework perspective we asked ourselves the question of, "what are the resources that seed stage founders wish that they could have, but they can't afford today?" And that's how we came up with recruiting. So on the recruiting side, we save our companies nearly $3 million a year in recruiting fees. And time to placement is like 50% of time to placement for companies who are trying to hire on their own. I mean, you think about that and you think about a CEO's job and maybe 20, 25% of their time at the seed stage is going on LinkedIn and cold messaging people. And it's like, the unlock of time is incredible and speed with these companies is absolutely imperative. It's like a number one priority when we think about what makes a great founder. Jason Shuman: And if you can't get butts in seats in 45 days, and it takes 75, that's a huge gap. And so we can bring recruiters in to support you. And by the way, because we only focus on New York, we've built this massive database of 1,000s of people who we've also back channeled. So we're not sending you people that we don't know at all. We're sending you high quality candidates with higher conversion rates, with higher success rates. And by being able to do that, we feel better about the opportunity for you to succeed or the probability for you to succeed. And it's the same thing on the go-to-market side with relationships. So we can make all sorts of introductions there. We can coach a lot of your executive team on that side, we can coach the junior team on that side. And then on the finance side, I think a lot of seed stage investors don't love diving into the weeds on the financial modeling and projection side and the cohort analyses, and really cutting up all the data, so we've brought on folks that love doing that and have done it at a scale that a seed stage CFO just wouldn't. Jason Shuman: And most of these companies don't have CFOs. So we really try to package our companies from a financial perspective too, by the time that they go and get to an Andreessen or a Sequoia or a Bessemer or a GGV, they're like, "wow, this is the cleanest data room, the cleanest financial model I've ever seen." And the amount of times that I think I've heard that from my friends at those firms is I can count on by more than two hands and I haven't even been there that long. Samir Kaji: This is a question that was actually posed to me by another manager who's scaling and their AUM now allows them to start to hire a operations team that helps founders with a whole host of things, similar to what you guys are doing. The question though, that they posed was, "how should I think about KPIs?" And another firm that had chimed in and said, "well we actually look at founder NPS scores. So we do these founders surveys and we ultimately look to test, what is the overall benefit we're providing? How much value are we really driving and NPS is a great way to do it because it shows tactical." Are there certain KPIs that you guys use to really assess the quality of performance of this team that you've built? Jason Shuman: Giving you all of our secret sauce right now. Yeah, we have inputs and outputs on the portfolio impact side and really credit Cassie and Rebecca who have implemented an incredibly powerful system there. So on the people's side, there are KPIs around dollars saved, but there are some other KPIs that regard or surround smaller projects for instance. On the market development side, there are KPIs around the actual pipeline and the actual sales that they generate for the portfolio companies. And then what kind of sits on top of everything is in our CRM we track basically all the interactions between, or projects that we have with ourselves and our portfolio companies. And those are broken out into high, medium and low intensity. And there are KPIs around high intensity projects, medium intensity projects, low intensity projects. Jason Shuman: And then at the end of the year, really, I think it's actually twice a year, we do a founder CSAT or NPS score depending on how they are different. I mean, we do a CSAT, we didn't find that NPS was that helpful although we do ask the question, but the CSAT is an important, which is the customer satisfaction score. And that is basically getting input on every single person on the team and every single team. And then we now can overlay that data on the interaction side of things to figure out, "well, founders that have high intensity interactions are the happiest, but you know what actually low intensity ones are pretty happy too because of X, Y, and Z reasons and interactions with this team." Samir Kaji: That makes total sense. And it's very clear that what you guys actually built is working based on everything I've heard in the market. So congratulations on building such a great group. Going to the investment side for a second. You talked about this earlier, Primary's New York focus. So focusing on companies that are only New York, you're not looking at other geographies. And a lot of people have had the view that being single geo focused if it's not Silicon Valley is hard because how many massive companies are going to be built. And if you're going to provide those 3 to 5X returns fund after fund, you kind of have to be an every single great company that is in these smaller geos. Now New York part of me is like, it's not really a small geo, but at the same time, I think you understand just directionally the things that you probably have heard during your LP pitches. Tell us a little bit about why geo focus, what does it actually mean to win a single geography? Jason Shuman: New York is an incredible city that yes, 10 years ago, if we wanted to have this conversation, I would agree with you. But 2015, when Primary was started, Ben and Brad had a key insight. And I think they've been spot on. I mean, if you fundamentally believe that there will be 5, 10, 15 unicorns a year coming out of New York City, then you want to be an LP in Primary because we're going to go out and we're going to hunt down those companies and we're going to get into them. And even if we're only in half of them, our returns are still going to be extremely strong. And that's why I think from a focus perspective, it's incredibly powerful because it unlocks so much more on the portfolio impact side of things and kind of creates a network effect within our own city. Jason Shuman: And there's a reason why Andreessen just hired David Haber here in New York. And there's a reason why Lightspeed just announced that they have an office here in New York. And most of the seed funds are sending people out here. And most of the SF funds are sending people out here. So this city is going to get more and more and more competitive. Series A funds are coming in at faster paces than I've ever seen before. But if we can continue to own seed with focus, I feel like we're putting ourselves in a good position to succeed. Samir Kaji: So speaking about New York and you're right, New York is a massive market that's evolved so dramatically in the last decade. However, today it's more competitive, right? You see downstream investors coming and doing seed. You see more money flowing into the ecosystem. And in today's world, a lot of founders are indexing heavily toward investors that can work with speed. You you're writing big checks. You're not doing 250, you're doing $3 million checks, which means you have to have diligence, you have to have conviction, not only in the founder, but the business model. How do you manage speed versus diligence in today's world, such that you're not missing on the best opportunities because you can't move quickly enough? Jason Shuman: We're really doing it in two ways. And I want to give credit to Mark Gerson who taught me about sense of urgency and really having a sense of urgency with everything that you do, if you want it prioritize it. So when it comes to a diligence process, if I'm meeting with the founder and we like the deal, or we like the founder before the meeting's over, I'm literally going to open up my calendar and I'm going to schedule a meeting with that person for the next day. And we've now brought on an investment team of... Let's see, six people, five, six people since the beginning of last year to help us speed up the diligence process. Jason Shuman: And so folks like Lia Zhang who came over from Stripes Group or Tobias Citron who has been here last couple years as an intern and Paige from Insight and Sam from Nomad Health and Kai. They're here essentially not only to just source deals, but to create these deal pod structures that help us take a deal from day one, come up with the list of got to believes that we need to diligence, go out, track down the answers to those questions. "What does the market look like?" Have those customer calls, back channel the founder. And then once you've really gone through that process, which by having three people on a deal, instead of one, you're able to do it a lot quicker. And we're going to meet with that founder three times over the course of six days. Jason Shuman: And that helps us really start to get to know them. Now I do think this is a period of time that I'd say a lot of mistakes will be made by many other firms, and maybe there will be some made by us as well, because you sometimes just don't know what you're missing. Maybe not even in terms of the market, but the person. And it sucks because I don't want this to be transactional, I want this to be as genuine as possible. And I want to be able to go have dinner with you and get to know you a lot more. And so we're trying to make sure that we're checking all of the boxes that we were checking before, but in a little bit more of a condensed timeline and that's worked out pretty well for us. Jason Shuman: But that said I've talked to multi-stage firms that have led some of the seed deals that we've looked at and I'm like, "well, did you look into X and Y?" And they're like, "nope," because it's like, "why do they need to? This is a tiny check for us." So we really pushed founders to work with seed firms, whether they work with us or not, that are at least doing the work. The other thing though, that we've been doing is going earlier and earlier. Tobias and Brian here launched the New York City Founder Fellowship, which is our version of an equity free, fee free version of YC or kind of like an On Deck. And we've had some incredible talent coming in. And now we're getting to know them at the earliest stages. We're getting to see how the sausage is made, how the idea evolves, how they learn, the speed of learning, and then we can make bets on them even earlier. And it's the same thing on the pre-seed side of things, where we're getting to work with people that we really enjoy working with and we've gotten to know over the years. Samir Kaji: And that's a great framework in terms of how to manage all these different variables that are in play right now, which leads me into a more global question to you. So when you started investing, it was at a time where prices were low and actually it's coincided with a time where as those companies have matured, we're in a great capital market. Liquidity, the exit environments are great. So if you look at the performance of funds that were 2008 to 2015, amazing performance. It's not uncommon to see 5 to 10X seed funds, right? I mean, we've just seen so many of them. What do you think about the market today, right? Samir Kaji: The old adage is always, "buy low, sell high." Are we in a place where innovation just is in an area where it's just rapidly evolving and growing so quickly that even if you're buying higher relative to fundamentals that in spite six, seven years, you'll still be able to sell higher, or do you view this as, "yeah, valuations are high and the best companies will continue to do it, but there is going to be some deterioration and maybe some carnage that happens if there is a downturn in let's say a couple of years now that we are going on 12 or 13 years in a bull run?" Jason Shuman: I think we're at a period of time where the pace of innovation is shifting at such a rapid rate, that there really will be these massive companies that generate these really strong returns. Now that's not every company and that's not every market and not every company in every market has real moats and should be traded like a tech company. But there are many markets that are going to have a new champion crowned that can generate a significant amount of enterprise value and returns for LPs and ourselves. Looking broadly at the ecosystem today, and this is anecdotally from a Primary and a New York perspective, we have more high quality founders that have seen scaling from 10 to 100 or 1,000 now than we ever had before because the New York ecosystem is really starting to mature. Secondly, you're getting better ideas than you've ever had before, and why is that? Jason Shuman: I think one, there's been a shift and a why now in a lot of these industries, but also because there's a democratization of access to information on the internet today. And you think about the amount of healthcare companies that are getting started, that we see that are incredible. People are leaving Oscar and RO and Cedar and starting companies that have really strong moats and great tailwinds and massive markets and you back them. And then what's crazy is not only is this speed of innovation changing, but it's the speed at which these companies can scale. I mean, we have a company in our portfolio, that'll go from like zero last year when they just like pivoted to over 50 this year. Jason Shuman: And it's like, "whoa, that's recurring revenue." It's an incredibly powerful thing. And so, yeah, I mean, are people overpaying? Maybe, definitely in some deals they certainly are, but there are certainly a lot of other companies out there that will live into it but it is buyer beware and its founder beware because when you do end up taking on money at a ridiculously high evaluation and you don't actually have product market fit growing into that might give you a little bit of digestion. Samir Kaji: I think that is such an important point. And I've always talked to founders about that. "Don't take too much money at too high a valuation until you're ready." Now, yes there's money out there and you don't want to under capitalize yourself in this market, but it is founder and buyer beware for sure. I also agree with the point that the pace of innovation today is at breakneck speed and you can look no further than the vaccine roll out using RNA technology with Pfizer and Moderna, so the world has shifted. I'm personally very excited to see what the next couple of decades look like. I try to disassociate that with the financial aspect. It's too hard to know and I've been long around long enough to know that I'm not smart enough nor do I think many people are smart enough to actually project what the financial markets are going to look like for the next five years, let alone the next year. Samir Kaji: So let's go to our last segment, which is our heat check. I'm going to ask you three questions, rapid fire, the first being, what is the most counterintuitive lesson you've learned as a venture investor? Jason Shuman: People, I would say founder first, and I do agree, but you put a good founder in a bad market, the market will keep its reputation and the founder won't. So you need to make sure that you back a founder that will recognize when they're in a bad market and they'll move over to a different one. Samir Kaji: And we do see that quite often and having that awareness. Well, let's talk about founders and you've invested in companies like Latch at the early stages. You probably have spent enough time looking at companies where you're going to miss companies too. Looking back in your career, is there a company that you look back on that you missed that's turned out to be a great company, and you've learned a particular specific lesson from? If so, tell us who the company is or if you're comfortable with and what you actually learned from that miss? Jason Shuman: My entire portfolio has a good size to it, but I'll use LeafLink as the example here. Ryan Smith actually has become a great friend. And I was at Corigin Ventures at the time when we looked at Leaflink. And I remember asking a lot of questions about, "well, what's your engagement like? And your this and that on these features and are people really using it?" And he wasn't really tracking that much of the data in the early days. There wasn't the foundation laid and he had sold the company before. And I remember thinking, "how good is this guy?" And at the same time I knew his market timing was really good. And I knew he was really, really thoughtful, really thoughtful and learned super-fast and had done it before. Jason Shuman: But at the end of the day there is some extenuating circumstances that made it so we didn't win the deal. And then I ended up leaving Corigin but if there's a lesson that I learned there, it was definitely stay in touch with founders as much as possible that you really believe in. And then also there's a lot of things that founders just don't have the time for in the early days. And if they have a bias for action and they know how to sell, and they know how to build product tracking when you're like two people in a closet is not necessarily something that needs to happen. Samir Kaji: Playing the long game and keeping mind share is a really good lesson to learn for anybody. My final question, just because you have mentioned guys like Mark and Ryan and Brad and Ben, but is there an investor out there that particularly inspires you given the way they think about things? If so, who is that and what about them? Jason Shuman: My answer, I don't know if you're going to accept it is Bill Campbell. Bill Campbell was the executive coach to folks like Steve jobs and Eric Schmidt, the guys over at Google. And long-term, I really do see myself getting into the executive coaching world. My mom's a therapist, my dad's an entrepreneur and I feel like the best investors really are generous with their time and help not only the company at the company level and the metrics level and are thinking about strategy, but they are helping the psychology of the founder and they care deeply about all of the employees within the organization. Jason Shuman: And I'll tell you really quickly having back the guys at Latch and then Ben at the stock exchange when they were going public the other day, seeing the employees that were there since day one, it gave me the chills. It was awesome and I was so overcome with gratitude that I walked up to all of them that I remembered and I was giving them hugs and just saying, "thank you." And Bill Campbell is the type of person that more investors should really admire and try to be like. Samir Kaji: A lot of people who don't know Bill, just because he is a Silicon Valley legend and obviously coached some of the best founders, entrepreneurs and VCs. I don't think he started his career in tech until he's in his early 40s coming off as being a football coach, right? And there's a great book out there on bill that's called Trillion Dollar Coach, which is a great read. So I definitely will accept the answer because privately, a lot of people have told me the impact Bill has had on them. Jason, this has been a lot of fun. Congratulations on being promoted to Partner as part of fund three, excited for what you guys are doing in New York and look forward to... I'm going to continue to track the story. Jason Shuman: Thanks man. Appreciate you having me. Podcast Production support provided by Agent Bee Agency This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit ventureunlocked.substack.com