20VC How Both Founders & GPs Should Construct Their Pitch, Why VCs Are Eternal Optimists & What Makes The Best PostInvestment VCFounder Relationship with Brian Ascher, Partner @ Venrock

In this episode of "20 minutes VC," host Harry Stebbings interviews Brian Asher, a partner at Venrock, known for his exceptional investment exit rate and multiple Forbes Midas list accolades. Asher shares insights from his journey into venture capital via the Kaufman Fellows program and his time at Intuit managing Quicken. He advocates for well-crafted pitches that start by highlighting the problem, emphasizes the importance of non-obvious insights, and values the inclusion of potential risks and fundraising details in presentations. Asher stresses the significance of trust, transparency, and a collaborative VC-entrepreneur relationship post-investment. Additionally, he recommends the book "Extreme Ownership," praises Google Photos for its AI capabilities, and reveals his latest investment in Socrates, aimed at enhancing employee experience in enterprises. Throughout the conversation, Stebbings endorses Zoom and Viewedit for business communication solutions.

• Host Harry Stebbings introduces the 20 minutes VC show.
• Harry Stebbings is active on Snapchat and interacts with his audience.
• The guest Brian Asher is a partner at Venrock, a leading VC fund.
• Brian Asher has a successful track record with multiple exits and has been named to the Forbes Midas list.
• Brian's background includes being a senior product manager at Intuit.
• Acknowledgments to David Patman, Nick ByMe, Alex Rosen, and IDG for facilitating the introduction to Brian.
• Promotion of Zoom as a reliable video and web conferencing service.
• Promotion of Viewdit, a free video recording tool for personalized communications.

We are back and welcome to the 20 minutes VC with me, your host, Harry Stebbings. I'd love to see you on Snapchat at h stepbings with two B's.

This quote introduces the host and the show, as well as Harry's presence on Snapchat, indicating a desire to engage with the audience.

So joining me on the show today, we have Brian Asher, partner at Venroc, a leading VC fund with prior investments in the likes of Nest, Dollar, Shave, Club, app Nexus and many more.

Harry Stebbings introduces Brian Asher, highlighting his successful investment track record and position at Venrock.

Prior to Venroc, Brian was a senior product manager at Intuit, responsible for quicken and quicken.com.

The quote provides background information on Brian's career before joining Venrock, establishing his experience in product management.

A lot of people ask me, Harry, you do so many calls and interviews, but what do you use? My response Zoom, the number one video and web conferencing service...

Harry Stebbings shares his recommendation for Zoom, underscoring its usefulness and the significance of its funding round.

• Brian Asher expresses his pleasure in joining the show.
• Brian's entry into venture capital was through the Kaufman Fellows program.
• The Kaufman Fellows program was designed to bring diverse backgrounds into venture capital internships.
• Brian's mentors at Venrock played a significant role in his career.
• He highlights the growth and global reach of the Kaufman Fellows program.

Brian oh, my pleasure. Happy to be here.

Brian Asher acknowledges his happiness to be on the show, reflecting his positive attitude towards the opportunity.

I got in through this thing called the Kaufman Fellows program.

This quote explains how Brian entered the venture capital industry, emphasizing the role of the Kaufman Fellows program in his career.

• Brian Asher provides two paths for entering venture capital: starting at the bottom or entering later with a proven track record.
• He encourages pursuing a VC career if it is a passion, despite the difficulties.
• Brian acknowledges the emergence of a third path into VC, which is starting a podcast.

Well, there's kind of two paths. You beat and kick and scratch and claw your way in as a young person who doesn't yet really have much to bring to the table by way of a track record or proven deal flow...

Brian Asher outlines the first path to entering venture capital, which involves starting from an entry-level position and working upwards.

Or you do it late in life when you're being invited in because you do have a track record...

This quote describes the second path into venture capital, which is predicated on having a successful track record that makes one an attractive candidate to VC firms.

And I'd also add a third path in starting a podcast, increasingly common these days.

Brian acknowledges the modern trend of using a podcast as a platform to enter the venture capital industry.

• Brian Asher loves pitches and views them as stories about a better future.
• He advises entrepreneurs to have a well-crafted pitch rather than a freeform conversation.
• Brian compares a good pitch to a well-made movie and emphasizes the effectiveness of a structured narrative.

I love pitches. I think as a VC you have to be an eternal optimist. A good pitch is a story well told about how the future is going to be better than the present.

Brian shares his enthusiasm for pitches and the optimistic perspective required for a VC, highlighting the importance of a compelling story in a pitch.

I don't favor pitches because I like a power dynamic between the seller and the buyer. I like pitches because it's putting your best foot forward in really crafting a beautiful narrative around your vision for the future.

This quote clarifies Brian's preference for structured pitches, which he believes allows entrepreneurs to present their vision most effectively.

• Slides are essential for fundraising and serve as a modern business plan.
• A short, well-crafted deck is valuable for various purposes, including internal partnerships.
• Slides can be used flexibly in meetings, either for the full presentation or to highlight key aspects.

"So my first advice is to have slides. They're not only useful for fundraising, but the PowerPoint deck has become the de facto business plan." "And you could always come to a meeting ready to give it."

The quotes emphasize the multifunctional role of slides in business settings, highlighting their importance beyond just fundraising. They serve as a business plan substitute and a versatile tool for discussions.

• Begin by setting up the problem to grab attention and set the context.
• Avoid starting with team slides or origin stories as they can be low energy and less relevant without context.
• Introduce the team briefly and save detailed backgrounds for later in the presentation.
• Focus on the problem and how the business intends to solve it with market or technology insight.

"But when it comes to, how should I start? I have a very specific opinion on this, which is start by setting up the problem."

This quote outlines the recommended approach to begin a pitch presentation, which is to establish the problem that the business aims to solve, setting a foundation for the rest of the discussion.

• Demos should be crafted as short stories with characters, tension, and resolution.
• It’s important to demonstrate the product in a user-centric narrative that highlights its benefits.
• Avoid merely showcasing features without context; integrate them into the story of how the product improves users' lives.

"I do love a great demo. As a former product manager who gave lots and lots of live demos, I think they could be super compelling."

This quote expresses a preference for demos that are engaging and tell a story, rather than a feature-focused walkthrough, underscoring the impact of a well-executed demo in a pitch.

• Entrepreneurs should provide thoughtful and insightful analysis of market size.
• Avoid top-down market estimations from large consulting firms without critical analysis.
• It’s crucial for entrepreneurs to present non-obvious insights as such and not assume they are obvious to the audience.
• Entrepreneurs should embrace questions as opportunities to explain their unique insights and the potential of their business.

"All I'm really looking for is is the entrepreneur thoughtful about their claim on the market size?"

The quote stresses the importance of a well-reasoned and analytical approach to presenting market size, highlighting the need for entrepreneurs to demonstrate thoughtfulness in their claims.

• Entrepreneurs often mistakenly assume their insights are obvious, leading to defensiveness during pitches.
• Presenting non-obvious insights correctly is crucial; entrepreneurs should acknowledge their unique perspective.
• Early-stage VCs seek non-consensus viewpoints that have the potential to become widely recognized in the future.

"So when an entrepreneur has this non obvious insight, they should present it as a non obvious insight."

This quote advises entrepreneurs to frame their unique insights appropriately, ensuring that they communicate the novelty and potential of their ideas effectively to investors.

• Including potential risks in a pitch shows self-awareness and a realistic understanding of challenges.
• Balancing the acknowledgement of risks with optimism about the future is crucial.
• Identifying potential problems and ways to combat them can be seen as a strength in a pitch.

"I do too, because I chose a real self awareness and a realistic sense of the challenges in front of you."

The quote supports the inclusion of risks in pitches, indicating that it reflects a comprehensive and grounded approach to business planning.

• Companies often list numerous risk factors when pitching to VCs, which can be seen as a sign of confidence or humility.
• A comprehensive list of risks may demonstrate thoroughness and understanding of potential challenges the company may face.

"It was almost a little cheeky because 75 things is quite a few risk factors."

This quote indicates that listing a high number of risk factors (75 in this case) can be perceived as overly confident or even slightly presumptuous, but it can also be an effective strategy in a pitch.

• Displaying the amount being raised in a pitch is crucial as it informs VCs about ownership stakes, valuation, and the capital intensity of the project.
• While the specifics of fund usage are often predictable, indicating the total amount is essential for transparency and setting expectations.

"I actually do like to see the amount you're raising."

Brian emphasizes the importance of disclosing the fundraising amount in a pitch to venture capitalists, as it has significant implications for the investment decision-making process.

• Castlight Health exemplified an excellent pitch by clearly defining a significant problem in the healthcare market before presenting their solution.
• The ability to articulate a problem compellingly can generate investor excitement and willingness to invest even before a solution is detailed.

"By the time they were finished outlining the outlandish state of US healthcare and the problem, you were ready to give them money because they were going to solve it."

Brian describes how Castlight Health's pitch effectively set up a significant problem in the healthcare market, which created a strong desire in investors to fund the solution.

• A healthy relationship between VCs and entrepreneurs is built on trust, transparency, and partnership.
• VCs often focus on problem-solving and improvement rather than celebrating successes.
• Alignment of interests between VCs and entrepreneurs is critical, and efforts should be made to maintain it through challenges.

"What makes for a really healthy relationship is trust, transparency and approaching it as a true partnership."

Brian conveys that the ideal VC-entrepreneur relationship is based on mutual trust, open communication, and a collaborative approach to business challenges.

• The interaction during the due diligence phase, including how entrepreneurs respond to tough questions, can indicate the potential for a strong post-investment relationship.
• An entrepreneur's pragmatic and realistic responses to concerns can build confidence and suggest a constructive future working relationship.

"I think it comes down to the interaction you have when you're asking a bunch of tough questions, maybe sharing a bunch of risks and concerns."

Brian explains that the way an entrepreneur engages with difficult questions and risks during the initial interactions can be indicative of their ability to maintain a transparent and effective relationship with a VC.

• It is possible for VCs and entrepreneurs to develop personal friendships alongside their professional relationship.
• Mutual respect and trust are foundational, and the extent of personal closeness can vary significantly.

"It doesn't have to be the case. I think there needs to be mutual respect and trust in general."

Brian acknowledges that while close personal relationships between VCs and entrepreneurs are not necessary, they are possible and can be built on a foundation of respect and trust.

• Business relationships can thrive alongside personal friendships when trust is present.
• Difficult conversations are necessary and can strengthen relationships when handled with trust.
• Enduring friendships in business are seen as positive and beneficial.

The friendship didn't get in the way of the inevitable and necessary hard conversations, and it was a testament to his confidence and ability to trust that sharing all the tough stuff with me wouldn't result in something bad happening to him.

The quote emphasizes the importance of trust in maintaining both a friendship and a business relationship. It suggests that open communication about challenges can deepen trust and friendship.

• The quick fire round is a segment where rapid questions about favorites are asked.
• The segment aims to gain insight into personal preferences and tools that influential people find useful.

A quick fire round now. And this quick fire round actually is more centered around favorites, favorite of everything than ever before.

This quote introduces the quick fire round segment, indicating that it will focus on the guest’s favorite things across various categories.

• "Extreme Ownership" by Jocko Willink is recommended for its portrayal of leadership responsibility.
• The book emphasizes the importance of leaders taking accountability for their actions and environment.
• The effectiveness of leaders is linked to their ability to take responsibility.

So a book I'm giving out a lot these days is called "Extreme Ownership, How US Navy SEALs Lead and Win."

This quote reveals "Extreme Ownership" as the guest's favorite book, highlighting its focus on leadership and accountability.

• Evernote and the Evernote ScanSnap scanner are used for going paperless.
• Google Drive is preferred for collaborative work.
• Box is used for work-related documents, and Dropbox for personal files.
• These tools are essential for the guest's productivity.

So I use Evernote and the Evernote ScanSnap scanner for everything. I've tried to go paperless as best I can.

This quote explains the guest's preference for Evernote as a productivity tool to maintain a paperless environment.

• A desire for venture capital and startup interactions to be more relationship-oriented.
• The current environment is viewed as too transactional.
• The guest values long-term partnerships over merely financial transactions.

I'd like to see it be less transactional and more relationship oriented.

This quote reflects the guest's wish to shift the venture capital and startup culture towards stronger, long-term relationships.

• Google Photos is praised for its use of artificial intelligence in photo management.
• The product is seen as revolutionary for eliminating the need for manual tagging and categorizing.
• The guest predicts that Google Photos' approach will influence future software design.

Google Photos to me, is not getting nearly the credit and discussion it deserves for being a truly remarkable example of artificial intelligence.

This quote expresses the guest's admiration for Google Photos and its innovative use of AI in managing photos.

• "I would rather be ashes than dust" is a quote that inspires living life fully and not playing it safe.
• The quote suggests a preference for a bold and active life over a cautious and passive existence.

I would rather be ashes than dust.

This quote, the guest's favorite, encourages an active and daring approach to life, as opposed to a timid and unremarkable one.

• Socrates aims to be like Alexa for enterprise, assisting with various corporate services.
• The goal is to improve employee experience by streamlining tasks that detract from productivity.
• Socrates is designed to provide intelligent, chat-based assistance, with live help as a backup.

It's a company called Socrates, and what we're trying to do is be like Alexa for the enterprise.

This quote introduces Socrates, the guest's most recent investment, explaining its purpose and how it aims to enhance productivity and employee experience in large companies.

• The episode was made possible by introductions from colleagues in the venture capital industry.
• For calls and interviews, the host uses Zoom for its simplicity and enterprise features.
• Viewedit is recommended for personalized video communications and has tracking capabilities.

And again, a big thank you to Nick... at Venroc and Alex Rosen at IDG for the intro, without which this episode would not have been possible.

This quote acknowledges the individuals who facilitated the guest's appearance on the show, highlighting the importance of networking and introductions in creating opportunities.

My response Zoom, the number one video and web conferencing service providing one consistent enterprise experience.

The host endorses Zoom as the preferred tool for video and web conferencing, noting its enterprise-level consistency and ease of use.