Larsen Jensen | Harpoon Ventures

[Music] Hey everybody, welcome to another episode of Fun Raising, a podcast where we interview top early stage investors and ask them all the questions that you want to know, especially as a first time fundraising founder on the fundraising process itself. And today I have the legend, Larsen Jensen founder and GP of Hardpoon Ventures, which may sound familiar because that is where I work. So I have the pleasure of working with Larsen every single day or this is - Displasia, Matt, depending on the day. - No. We have fun regardless. We really do. And I think that we have a couple of other folks that will be on the podcast too. I'm hoping that folks listening kind of get a good idea of how maybe not unique the process is, but after now talking to dozens of other VCs, it is unique. Can I think we do things in a unique way or a respectful way? So I'm excited to dive into this with you. Let's dive first into a high level introduction on Hardpoon Ventures. Can you give the audience just a quick background on what Hardpoon is, what we're investing in, average check size, and the types of companies we're looking for? Well, thanks for being here, Matt. You know, I'm really excited to be here and share more about Hardpoon and how we think about investing in early stage companies and what we look for, specifically as you mentioned in the process in terms of how we think about what's exciting to us and what we actually want to invest in. So Hardpoon is a really unique early stage venture capital firm. Not only do we have about half the team that's dedicated to investing, we have the other half of the team that's dedicated to helping our founders pave the road in front of them in terms of navigating Uncle Sam and the US government as a potential customer, grant writer, so on and so forth. So we not only invest, but we actually go a step further to help our companies enter the government market if and when applicable. Most of the companies we invest in are dual use, meaning that they don't only service the government market. They might be focusing on the enterprise market or something deeply technical where there's a large commercial tam, but we also see an opportunity for them to serve in their own way by bringing their technology to solve some of the hardest problems strategically that our country is facing in this modern era that can range from AI, cybersecurity, biotech and health, energy and materials, aerospace and defense, so on and so forth. Those are all the things that are really exciting to us. If you wanted to still it down into something very, very simple, it's sort of deep deck previously described from the past decade, but that's what we do. And so I think really one of the key nuances is that bifurcation of the team that's hyper collaborative has deep relationships with government customers all the way from a strategic level, congressionally through the executive office all the way down to the boots on the ground guys, you know, speaking of boots on the ground, many of our team were boots on the ground. I previously served in the seal teams, many of the other members of the team were previously enabled special warfare as well, bringing that unique insight as an end user and customer. I think is really interesting for us to unlock new value for the companies that we invest in. You know, we've raised over $300 million to date. It's going to be more sooner if you could read between the lines or the near future, which we're going to be excited to announce than not too disempleacher. But we've been doing this as an early mover to this space. We started in 2018 when this whole theme was not nearly appreciated. It was very contrarian at the time. And I think we're very authentic to it and we love what we do. Yeah, I think it's very fair to say that hard pun was investing into these areas way before it was it was cool. So we have the experience, like you mentioned, especially with the team and the boots on the ground and navigating so many of the complexities that happen on the government side, but on the hardware side itself hardware is way harder in many areas versus software. And so our team does have the experience of navigating both of those labyrinths. Let's go into some more questions about you. Why did you choose to get into VC specifically? Maybe talk a little bit. You have a unique background, but what led you into VC? I appreciate that, Matt. And you know, I guess for a little bit more context on me and my background, a group in California was fortunate to go to school in Los Angeles at USC. Swam there was fortunate to make two Olympic games in 0 4 and 0 8 subsequently at a rather young age hung up my cap and goggles and join the United States military and served in the seal teams for two deployments, which was, you know, one of the highlights of my life. But during that timeframe, we were exposed to a lot of emerging technology, some of which didn't really seem that emerging compared to commercial electronics, like the iPhone and things like that or the things that you just got to use personally. But we did have some glimmers of hope. We were early adopters to volunteer. We got to see how some rudimentary by today's standards, AI was really changing the game on a lot of different ways for us in our unit and what we were trying to accomplish. And out of that curiosity and frustration, I just became infatuated with how technology was changing the world, not just my job in the military, but changing the world across, you know, every aspect of our society. And so out of that curiosity, moved up to Silicon Valley was really fortunate. The folks at Injuryson Horowitz took a chance on me, gave me the opportunity to work there as my first real job outside of the military. You know, that led to a follow-on opportunity to work over at light speed on the enterprise deal team. And it's when I was at light speed that I saw this, these two worlds collided. I still have my top secret clearance. I saw the rise of great power competition, all the advancements that China was making and everything that impacts our society in terms of pharmaceutical precursors, pharmaceuticals, research, automation, AI, automated shipyards, all of this stuff. And frankly, the United States was asleep at the wheel technologically in terms of embracing these trends. I popped my head up and said, is there a firm out there that's specializing in this investment mandate? And there is really only in QTEL. In QTEL was the only firm. They are effectively a nonprofit that is funded by the intelligence community and other government agencies and departments as well. But there really wasn't anybody that was privately doing that. And so we said, can we create effectively a complement to what InQTEL is doing? Be very mission aligned. Do this for the national interest, but do it in a private sector capitalist kind of way as a pure play venture capital firm. And that's what we started to do in 2018. And it's been a wild ride and wouldn't have it any other way. I love that. I think listeners will hear kind of throughout this entire conversation. Your background and the whole team's background kind of playing into how we add that support. But before we go into some of the fundraising stuff, a few more questions on you. These were questions that were all nominated by founders. I think just to peak a little bit behind the curtain on what being a VC means. The first one, what is your favorite part about being a VC? And then what is your least favorite part about being a VC? Yeah. I think my favorite part is twofold. Like I love the chase. I love competition. Like I was in the chase going for the gold medal literally. And in the swimming pool, I came up a little bit short. Got a silver, but I love the chase. I love competing. I love winning. That whole journey is something that I'm infatuated by. But it's not only the competition at the end of the day for the actual Olympics or to win the deal or any of that stuff. It's the hard work behind the scenes. I might be a little bit of a psychopath to just enjoy the pain of doing everything I can to improve ourselves and to improve myself to be in a better position the next time. And I think that goes into the culture of the seal teams as well. Like it's not only the combat operation that you go on that everybody is dreaming about, but it's the hard work behind the scenes. The team work the preparation, rehearsing, rehearsing, rehearsing until it's perfect. And you cannot actually mess it up when the time comes. So all of that are the things that I think applied adventure and the craft adventure that really invigorate me. But beyond that, you know, being so team oriented for my prior career is something that I feel like is missing in the world of venture capital. And I think it's how we assembled our team. If anybody has the opportunity to work with us, it's not just me. It's just not just Matt. It's it's all ten of us. We're all working together to help our portfolio companies succeed and grow. And it's literally all hands on deck for us to try and make that happen. So it's not only the chase, it's not the competition. It's a competition that begins again once we cross the starting line as we invest in a company to help them be successful and accomplish their dreams. And so that's something that's super exciting to me as well. The thing that I like the least about it is probably, you know, actually the thing that founders have to do as well. They have to fundraise, it's probably their their least favorite part of their journey, their business builders, after all, fundraising is a critical part of that to resource them being able to accomplish their mission. It's the same thing with us. We need to fundraise to accomplish our mission. I love telling the story, but at the same time, you know, it's still not my favorite part of the process. No, absolutely not. At the end of the day, you're right. We're all builders in a way. And fundraising is a very important, but kind of feels ten-general part of what we like to do. It kind of goes to a similar question. The next question that founders wanted to know was, do you wish there was something that founders maybe better understood about what it is to be a VC? Unraising is definitely a common answer that we get for that, but is there anything else you want to add to potentially some things? Yeah, I think there is. I think it just depends on the firm, depends on the franchise. Most VC firms or a lot of the bigger household names have been around for a long time. They they've proven their right to exist. They are extremely successful. And we all admire them and hope to be them one day as we grow up. And so I think there's a little bit of a misnomer out there in the VC community, or at least with founders, they think about the VC community, applied to Harpoon and other firms like us that are still somewhat emerging. We've been around for almost a decade, but this is such a long-term game. You know, it takes decades to build like a generational franchise, which is really, really unique in this asset class. So I think that I think that we're more like founders in the sense that we're building our business now. We're not yet established. We're not yet an incumbent. And so I think a lot of founders think of VCs as people that sort of just hang around and wait for a meeting. And you know, it's pretty luxurious or something along those lines. That's sort of like the, you know, the media view of the venture capital community, which can be true for maybe some of the more established incumbents. But for the best VCs, even if they're at that income, They always have an axe to grind. They're always competing. They're always trying to do the best they can to improve their franchise and to improve outcomes for their founders. And so it is actually a lot of hard work, but at the end of the day, we're not building a really core technology. It's not nearly as hard as building some hard tech thing that goes to space. So all respect to the founders out there, but I think the DNA of how we operate is very akin to how the DNA of the founders that we invest in. - Yeah, and that's been a very common answer that we get from folks that were operators turned investors is that they were surprised. It just, again, it's not a sorry, but it's so funny. Coming from my former background in the military, the special operators, special operations, those are operators. And so when I came into like VC into tech, I was like, oh, I'm an operator. I'm like, I don't know if we're speaking of the same language here. The operators I'm used to are the ones who are actually special operators kicking down doors and shooting bad guys. And so operators in a business context is very different. I guess everybody has a term operator, whether you're a surgeon, you're an operator, or a special operator, you're an operator, business builder, you're an operator. Everyone wants to be an operator, regardless of the field, I guess. - Yeah, but it's the same thing where they think like, oh, VC, it's like, oh, you just go on vacation for three months of the year, and then people come to you asking for money. And that's all you do. And it's usually not the case. It's your point. - That's not the case. - The best VC is it's not. All right, next question. What are you personally excited about as far as the problem sets or innovations that you're kind of seeing right now? You mentioned some of the ones earlier from the thesis in Harpoon, but maybe for you personally, what are you excited about? - I think there's a full stack underwrite of building the AI ecosystem. I mean, it's something that's a new market inflection. It's only been around for a couple of years and we're tremendously early in this journey. It's probably a kin but faster than, you know, by any measure than the dot com era in terms of the platform shift to the internet. And so with that, you need not only greater compute, greater connectivity, you know, more bandwidth. You need all of those things to actually just get the foundation models to actually be possible at scale in the first place. And then we have the foundation model arms race, which allows more at the application layer for really idiosyncratic problems that previously were probably not venture scale that are now unlocked to be possible. And so long story short, I think almost everything that we've invested in that's successful has some AI angle to it, whether it be on the hardware or infrastructure side of the house, you know, in space, you know, communications and other things of that nature, all the way down to terrestrial energy, nuclear, you know, energy, serial science, it all really has room for improvement to make our chipsets more effective into the pharmaceutical industry, cyber security to actually core model layer providers into the application layer, whether by accident, which oftentimes it is or by design, really the full stack of I think everything that we've invested in, you know, intersects with this AI transformation and we're certainly in the early innings, I think we're bottom of the first inning in a lot of this stuff. We're not even close to being halfway through, we're not in the seventh inning stretch. I bring up a lot of these baseball analogies because our offices by Petco Park, today's opening day at the recording of this, and so a lot of excitement around the baseball season, but you know, nevertheless, those are the things that we're really excited about. And when we look, when we see a new company, it's like how, even prior to AI, why is now a unique time to build this business is always a question we'd ask, and always a question of the best VCs in the world ask. And so now that right to win often times comes with a technology mode and something that previously wasn't possible until the modern era of technology that's only occurred over the past number of months to the past couple of years. There was a kind of an interview going on around X right now from Toby at Shopify who said that, "2026 is the year that every single industry and business is up for grabs and many incumbents will continue to innovate and stay there, but to your point, every inch of every business is now being affected by this, which could lead to all kinds of new opportunities and things." It feels like a Renaissance in a way, right? It does, it does. And we'll see how this all plays out, but I think everything's up for grabs. And as you've talked about and written about various dootly, I think we are gonna have a gap in the labor force. We have a lot of traditional jobs that ultimately AI is going to be improving or displacing, depending on the situation. And so I think that not only is this a technology ecosystem, you know, thing that we need to confront, not only is this a business issue that we need to confront, this is something that, you know, our own government and governments around the world need to understand and ultimately embrace in order to create a more prosperous future for the citizenry. And so there's a lot of unanswered questions, but leaning into that, I think, is the only way to play it because it's inevitable. - Great. All right, last question here. This is kind of your minute or so to shine some light on Harpoon. This is a question that founders wanted asked or answered. Why should founders pick you and/or Harpoon to be on their cap table? - I think we're the most authentic firm to investing in the national interest, short of probably in Qtel. I think they've been around the longest and they have earned it. And I have all due respect to them. But I think second to that, I think founders would really struggle to find another firm of the DNA of Harpoon, a people that literally have worn T-MUSA and represented our country across the other playing field but the battlefield to now the world of venture capital. And there's been a lot of new entrants into the space that I think just lack the authenticity that we have. It doesn't mean they're not fantastic investors. So if you want that authentic team member who not only says they're gonna be in the trenches with you, but has literally been in the trenches previously and knows what that term actually means, I think that we're the best fit. And beyond that, I mentioned at the onset here that we have not only an investment team, but a team that assists our portfolio companies in a very unique way. This is one of the things that I learned from the Injury and Horrod's franchise, is like they're not only investing, but they have a whole services army to help you in recruiting and PR and marketing and go to market. We really have tuned that for founders that are interested in building for the national interest or believe that their technology at some point could intersect with the national interest, which is pretty much any large scale outcome that we've seen in the history of tech technology market. So it is very, very wide. Even if it's not today, if you're building a technology company of consequence, you are gonna intersect with Uncle Sam, period. Whether that be, you know, regularly, totally, whether that be for funding, whether that be as a customer, you are gonna have to do that. And we built the muscle movement to be the best in the world at helping companies do that. One of the things that we say a lot internally is that Uncle Sam is the largest customer in the world. And eventually, to your point, many of these businesses will be interacting with them. So 100% are. I don't think that a founder can say two things, or say that you're gonna build a technology company, it's gonna change the world. And if that's the case, obviously there's gonna be consequences on the hill. There's gonna be consequences, you know, with DC. Look no further than Facebook, you know, in terms of election, you know, issues, so on and so forth. Look no further than X. Things that appear benign at the time if they are gonna be huge, end up transforming not just industries, but transforming civilization. And so if that's the case, Uncle Sam, we'll wake up at some point or another. And so we want to be a critical part to help make sure that they are woken up in the right way. - I love it. All right, going into a lot of folks here for the fundraising process itself, which has the title of the podcast mentions, it's actually, it's no fun at all for VCs or for founders. It is one of the hardest parts. And so we created this to essentially give founders a little bit of a peek behind the curtain on what a top VC is looking for because there's not a lot of information out there that educates founders on what this process actually looks like. If you haven't gone through it yourself, a lot of people listening are first time fundraising founders and they have no idea what they're getting into here. So hopefully this adds a little bit more light for them. The first phase of the fundraising process, I like to call getting in the room. As VCs, we get hundreds of pitch decks and emails every single month from founders that are looking to fundraise. How do founders stand out? How do they create compelling pitch decks that help them get their first meeting, which we'll get into in the next phase here? But what we're seeing a lot of founders do is create a list of investors that they want to start reaching out to. It's almost a mini CRM. So the first question for you is, what advice would you give founders on the characteristics or traits that they should be indexing on when creating that initial list of VCs to reach out to? - And creating the list, I would look through, look at podcasts like this. There's many other venture firms that are going to be on this and that are already on this. And so just trying to understand who's the right fit for you thematically and culturally. And it's okay if somebody's not a fit for us. Like, you know, it is what it is or vice versa. And I think everybody else feels sort of the same way. So I think looking for making your best guests at relationship fit is probably something that's under indexed for everyone looks at sort of like thematic fit. Just because they have a thematic fit doesn't mean you're gonna enjoy working with them. And at the end of the day, these are 10 year commitments in terms of like how you're engaging with your investor base. So thinking about that really intelligently, I think it's something that's really good to do upfront to the maximum extent possible. - Yep, that's great answer. Are there any things that founders can do on the outreach process that you think it could be just for you or for Harpoon that gives them a better chance? Is it 100%? - On a cold email. - The single one is coming in through an existing founder that we've invested in. On number one, everything else very far is in second place. - I'd margin two. - Wide margin. Number one, coming in through a founder, getting an intro through a founder that we've worked with before. That we have a really strong relationship is the single best way to do it. Number two is probably through other venture firms that we've co-invested with before to extend their already an investor or they're already interested. But you gotta be careful with that because you don't wanna come in through a venture firm that's not investing and have to sort of explain that away. You know, the whole adage is like, why are we so special if you came in through another venture firm? Why didn't they invest? And that's the first question I had asked. And so I think authentically that barrier is gone. If you're coming in through a founder that we've already invested in, ideally this in the same sector that you're operating in, with a thumbs up vote of confidence saying, "Hey, you got to meet my friend. We did our degree together or we worked together at X, Y, and Z, you know, a startup or incumbent. He was one of the best people there and he's got an idea." Like that is number one way to do it. I really, to the max, we sent possible, recommend against cold inbound, cold, cold linkedins and things like that. I think going, spending the time on your investor target list to come in through somebody that's a friend of yours or a coworker formerly of yours, probably the best, to say, "You really got to meet my friend." And I think that'll help you stand out more than anything else. The next question that comes from this, when Warren and Joe's are obviously the best way of doing it, for folks that maybe don't have as many, they've been out of this ecosystem, any advice for them on how they can start building some of those relationships beforehand, even months before they go out to fundraise? I think this is something that goes back to preparing for a Navy SEAL mission. You got to do the work ahead of the time. You can't just go on to the target and expect that this is all going to work out. I mean, you could, but you're really rolling the dice in terms of your own safety. So why risk it? Why risk it if you have the time to prepare? So go to industry conferences, spend a lot of time building relationships, win over other founders in terms of how your technology is different and unique. And if you sort of like spend the time working that ground game, I think it'll pay off in a lot of different ways, recruiting for your own team, customers down the road, and ultimately investors in shows like we're here talking about today. Yeah, green. Are there any, so let's say that they've done all the right things, they've gotten their pitch deck in front of you via warm intro or what have you. Are there any slides in particular or things that you look for as a VC that stand out that maybe you go to first before even reading the rest of the pitch deck? Before I've been getting to the slide, I think one thing that I'm guilty of too in my own fundraising is trying to kill everybody with overwhelming information in that first email. That's the surest way to actually not stand out. And I experienced this too. Like when I'm, you know, fundraising from LPs, I want to tell them everything that's amazing about us for them to try and find interest in us. I think the shorter that you can be the better, and that's really, really an art in hard to do because what's the old saying? Like if I had more time, I would have written less. Like that is sort of the art and the challenge with this. So if you're writing something that's literally more than four sentences, I think it's really hard to stand. If you can't communicate why you're different and what's going on with you and your technology, your team, and the market and four sentences, I'd go back to the drawing board because of its four paragraphs. It's not that people are lazy. It's just that it looks like your desperate. I hate to say it, but it looks like your desperate. And when I fundraise, same thing. If I'm overkilling with all these four emails and it's a super long essay, it looks like I'm desperate. And guess what I'm not going to do? I'm not going to get that meeting with the pension or endowment or family office that I want to meet with. So I play the game the same way that the founders do. So I think I sort of have learned by failure myself, what not to do. But as far as like the thing that's the key unlock, it's really rarely on the technology and describing that. At least for us, maybe for somebody that's a cyber security expert, they want to see that. But for us being somewhat generalist, that's not it. It's the strength of the team first and foremost, and the market insight in terms of the problem. Like those two things, I think are the things that make us jump out of our seat and want to learn more. And if you have a really, really, really strong team, extremely well credentialed or pedigried, or somebody that's just a brilliant, savant, maybe a young guy who's 18, 19, 20 years old, like those kinds of things actually stand out as long as it's nested in a problem that is so large. And the favorite situations that we have, at least I have, is like, holy cow, this is so obvious and so simple. But nobody for whatever reason is doing it. And it's only been possible because of an unlock in technology that you uniquely have. If you can communicate that very clearly, it'll get the meeting, especially that comes in the way. Especially that comes in through a founder that we've invested in before. Absolutely. Is there anything on a team slide specifically? If that's one of the more important ones, visuals, logos, what do they need to talk about or not say on a good team slide? Clearly communicating how the team, and if that's one person that's fine, so the individual and/or team are true outliers. Everybody thinks they're an outlier. Matt, you think you're an outlier? I think I'm an outlier. Everyone thinks they're an outlier. So, but you have to communicate that in a way that's actually realistic and relative to everything else. Another way that I, another anecdote that might help to frame this is, you know, I went to Stanford Business School a number of years ago. I went as a veteran and routinely I'll talk to other veterans that are applying to go to grad school or want to get into the Stanford GSB. And I'll read their essays. And I'll say, but every veteran essay pretty much all sounds the same. And obviously these are heroic experiences, like more heroic than mine. By a wide margin of like going through true adversity. But if you put yourself in the seat of the admissions cadre at you name the university, how are you standing out versus all the other veterans that are saying the same thing? That you went to combat, you had some, you know, crazy experience, and you know, you got through it. Some framing of that. Well, they've got 200, 300, 500 other veterans that are saying some version of the same thing. It's not that you're not unique and special, especially in the scope of the greater populace. But you're competing against hundreds of other veterans that have some version of the same story. Why is that, why is your version of this true unique and different than anybody else's that's coming in? And so if you put yourself in the founder shoes to the same thing, like I'm sure you're smart, I'm sure you're well pedigreeed. I'm sure that you have a unique market insight. But so does everybody else. How do you zig while everyone else is zagging? How do you outflank the enemy? How do you outflank the venture capitalists? Like us. How do you not just come at it with a frontal assault to say, oh, we're different. But everyone else says they're different. So really having something to laterally move that's like, is truly different or adds depth to the pedigree of the team. I think is a huge, huge feather in your cap. Yeah, it's almost the, the why. Like why are you so interested in taking the 10 year journey or longer on this? Totally. Percent. You said more clearly than I could. Thank you, Matt. That was great. Last question in this particular section, what are some of the mistakes that you see founders make, whether it's in the pitch deck, the way that they're doing outreach, you mentioned maybe having something that's too long, maybe two in the weeds, any other mistakes or common things you see founders make in that phase. And this part of the process, something that's less is more. Believe it or not, people want to say more on their pitch decks and it's sort of like less is more. And to the extent you can't simply describe it in a very clear way. You know, I recommend going back to doing that. So I lots of decks. I think the biggest ones that are almost the ones that are somewhat easy to dismiss to dismiss are the text heavy. You know, decks that just. You have to read a lot of them, but they clearly are written by AI these days. And they have a lot of like buzzwords to try and like fit in because you think that's what venture investors want to see. It just really doesn't. So just knock them over, you know, bang them on the head of the high quality team and a large problem that's unsolved. Like, you know, the least competitive, the better. And you know, I just came back from Hill and Valley also and many folks were on the record of some interviews thereafter. Like lots of people are trying to build the Andral for X, like stop building the Andral for X. Like just build something that's unique. Don't comp yourself against anybody else and say you're doing that. And I think if you have that insight that you're building the, you know, first of its kind, you're going to go to zero to one and a first of its kind business. You're not trying to build something that's, you know, effectively, you know, by analogy there. Well, yeah. All right. Let's say they've taken all this advice. The craft of the perfect pitch deck. All the things right. They now have an initial meeting with you and or Harpoon. So let's go into that phase of the process, which in itself, you know, it's only 30 minutes. But as you stack these up across, you know, dozens of VCs in this particular phase of all these introduction calls. It's such an important part about the, about the process from your lens. What is it as a VC? Where are you looking for in those 30 minutes from a founder so they can become better prepared for that 30 minute interview? As crazy as it sounds, you'd probably agree with this and I've heard other venture firms agree with this. You sort of know whether not for sure if you're going to invest, but your level of interest in the first five to 10 minutes. First five to 10 minutes, these calls should be five to 10 minutes long. And it's probably the same thing when we fundraise to people are the other side of the table. They know whether they like it or not in five to 10 minutes. It doesn't take an hour. It doesn't take 30 minutes. All of that is just getting the details to validate or invalidate that initial interest. And so I think that first five to 10 minutes that go time is really, really important. But you can't make it seem rushed. It's got to be still somewhat casual. You can't appear desperate. You have to sort of be the big dog. And if you are, that really helps. And thereafter time kills all deals. And so as you architect your fundraise, I think it's important to get some dry runs out of the way. Probably with other founders to get some feedback. Maybe some friendly firms within insiders. If you have some with the angels to sort of like craft this. But I also think I'd be cautious about who you're getting advice from. Because the world of VC is different in the world of angels. Unless they're like native to the VC ecosystem, which many, many are these days. But I'd be cautious against working with, you know, people with a PE background, other investment experience as family offices who have been, who've gotten wealthy on traditional businesses. And taking their insights as it relates to oversek intersecting those with the world of venture capital. Because it is very, very different. If you come in with a PE style, you know, pitch, you come in based on the advice that you get from angels that are not tech native. You're going to fall flat on your face and it's not going to go well. Not because we hope that's a case, but I just think it's just a different creature and podcasts like this, I think will help prepare you to sort of like know how to come in. But I think right out of the gate, starting with the problem, right out of the gate, be like, this is a huge problem. It hasn't been technically possible before. We believe it is or we validated it. We have a unique technology. There's unique technology in the market that allows us to solve this. This is a tens of billions of dollars, annual revenue business very quickly. And let me tell you why we're the only people in the world to do this. Very, very clearly, very, very succinctly. And you need to dub it down to as if you're talking to your fourth or fifth grader. Every VC thinks they're super brilliant, many, many are. But you gotta, you don't know who you're talking to at which juncture. And so if you're talking to some as deep in the weeds technology, you might want to start there. If you're talking to a generalist, you might want to say, all right, let me like boil this down to basics for you, Larson. Here's the problem. Here's the desperation. Nobody solved this. We have and we're raising a few million bucks, go get this going. And that should be something that is captured like right away. You can capture all of that and then almost like turn it over to the VC in a way to steer the conversation. One of the questions we have here is these were questions again, they were asked by founders. Pitch deck or no pitch deck, which kind of goes into that. It's like, do you just want people to read a pitch deck for 30 minutes at you or how does that transaction look? Well, we prefer to see a deck in advance. Of course, personally, we can glance through it. It's probably not going to be a super deep exam, but glance through it to have a level of familiarity and the ones that are easy for us to understand is where we have done some investments in the space. And so we sort of like immediately know there's a problem there because we've heard of it. That's sort of like the simplest ones to do. And I think are the easiest to peak the interest. To the extent more education is necessary, so be it, that's fine. And there's plenty of times where we need to be caught up and don't understand and don't know, and we have to ramp up very, very quickly. So I think it's dealer's choice. I think whatever you're more comfortable with as a founder is the way to go. That speaks to the authenticity. If you're running this process just to impress VCs, you're going to lose like you got to like be authentic. You got to be yourself. It's better to like get nose because people don't like you than it is to get yeses pretending to be someone else. It's the same for us. We fundraise too and it's frustrating, but it's the reality. It really is. One of the other questions was whether there's a preference on the whole founding team being there just to see you being there. Just see you. Just see you. Just see you. Just see you again. You have the whole team. It appears desperate. So true. And also you can't and don't send your CFO. Don't have somebody stand in for you. You have someone stand in for you. Like dude, it's an immediate like it's going to be a pass. In less for some reason, you are the the hottest company in the history of the world and the founder literally doesn't have time for you. But like if you're that founder, you already know it. You don't need to listen to this. Like it's already been happening in like your rounds already over subscribed. But even then, I think it's probably not the best look. So I would say just CEO for the first meeting. And if people want to dig in, they'll they'll sidebar or say, hey, let's get the whole team on the next meeting, things like that. Yeah, especially with highly technical. We see this all the time. Or if it's the CEO, the first meeting, if we're excited to keep going in the future meetings, we can get more technical. Having the CTO there is somebody that's very technical can help. So, but definitely not the first one. 100% what are some of the mistakes that you see founders make during the meeting that they should really look to avoid? So within those five to ten minutes, you've already lost interest and are now ready to hang up. What are some of the things they're doing for that? I think the mistakes go back to the planning of this where they say, hey, we are the only team in the world to do. I don't know some version of what's happening in defense tech these days where there's literally dozens of competitors that you could just Google or chat GPT and saying, oh, but we're better than everybody else. It just becomes a race to the bottom at that point. And like the curve to get over is way too hard, which is probably sort of an indictment on the idea in the first place. It's not that you can't do it. Some people do, but there really needs to be a clear differentiator on like why you are the best. And some firms are really, really good at this. Market mapping, entire spaces that they're excited about and picking and anointing the winner that they believe is going to be the one to capture the largest segment of market share. But when things are, when you're saying that this is a market's not competitive and it just clearly is by doing a quick Google search or a quick LLM search, it shows just like tone deafness unless the team has just has some novel invention and the team is just so pedigried that it's just crazy. But I think the biggest, you know, the biggest red flag is saying something's not competitive when it's clearly competitive. Yeah. Yeah. Don't try to hide behind that. One of the other questions that that founders really wanted to know, sometimes they get advice that they should also be asking questions that they should kind of flip the table a little bit and ask VCs questions. What are some of those questions that they could ask? This isn't necessarily to impress us. Yeah. But more because they should take a little bit of control. The ones I don't like actually are the ones. I mean, you're a white combinator guy. You just got back from Demo Day. I don't like the white combinator ones where they're like, you know, forced reverse interviewing the VCs in a really abrasive kind of way that like it's a little bit of a turn off to be frank because we're not like doing that to them either. We're not like coming across aggressively. So it's all in the tact, right? It's all in the tact. And so I think those are, it's a great thing to do, but don't just like come off and be rude about it. And I think that's, that's hard because we don't want to come off and be rude. Like some of the things I'm saying here, like we would never say in a pitch because we'd never say, Oh, well, you're not, you are actually competitive with these 10 others. We'd be like, we'd say it through curiosity. How do you think you're not competitive? Because it appears like you might be like just like in that simple change in tone, vocal inflection and words, it matters a lot. And so in the same way, I would suggest founders to like, Hey, like I see that you have some of these other peers in the ecosystem. Like they seem really, really good too. Like why do you think that you're, you know, you know, the best situated to invest in a founder like us compared to like, you know, these other folks in the space just gives us some breathing room to have, you know, have honest conversation and it becomes very cordial. And so the way that I've seen some YC founders do it is very abrasive. Yeah, it's almost like we're being interviewed before we can even ask questions in some cases. Totally. What about questions related to the fundraising process? Is it okay for founders to ask, you know, how long is this going to take? What does the process look like? Is there any questions like that that they should be looking for? I think it does, but it's all made up. Like, you know, VCs are going to tell you whatever they, you know, it's not nobody has like a far, some people do have a really hard and fast timeline. Like, hey, two days, three days, two weeks, it's all deal dependent at the end of the day. And if that's why time kills all deals. So it's good to know like if somebody listen, all VCs that are respectable out there can run an accelerated process, and they're really excited about something. And so I think the longer process goes on, if it's been a month and you're reaching back out and it's just, it's just, you know, 90% plus not going to be a fit. There's 10% where maybe it is, but it would require a new inflection. So I think that's why it's so important to architect your fundraise and a point where you're well prepared, well rehearsed. You are well researched so that when you kick it off, you actually can meet a lot of venture capitalist, all in a very tight timeframe to try and create a competitive constrained process. And we're going through this now. Founders done a great job. You know, what we'll see out all plays out on our side. We're really excited about it, but you know, great, great accelerated process. And there's an old adage out there. If you want to raise more, ask for less, and you know, if you want a higher evaluation, ask for a lower one, like it's sort of these like non-obvious, obvious things that I think some of the best in the business have sort of perfected. Last phase of the process is kind of the big meat of it. It feels simple, but it's a lot of hurting cats, building FOMO, building momentum. But let's say that they had a good first initial meeting with you or Harpoon or any of these other VCs. What does the typical diligence process look like for Harpoon? Let's just start there. Yep. Typically it's meeting the broader team. So to the extent there's other people involved, act channel references on the founder and on the market are sort of status quo, independent research, you know, through various databases, so on and so forth. Market mapping and competitive landscape to validate that there in fact isn't one or one where there's a gap in the market where somebody can shoot through it and actually potentially achieve success, all of those things. And it depends on timeline. I mean, although we have a relatively small team, but all venture funds like rarely dedicate like dozens of people to doing something. So it's still always a small team regardless of the size of the fund or the firm. It's always sort of a squad size, you know, or fire team sized element of a few people who are going after this and investigating these things, which would require people to drop everything if the pressures are there and other things they have in the pipeline, other things are dealing with their own LPs, other things are dealing with from a firm wide management standpoint, other ongoing board obligations. And so in some ways you just need to create an incentive structure where people are going to cancel their other meetings to dig in and do the research and the work they need to do to get there quickly. And that's even in a higher bar. Like people think about this as if it's a single deal dynamic versus, but they're also, but it's not at the end of the day. It's other deals they're prioritizing. It's other portfolio companies that might be having a huge problem or fundraising themselves or firing people or lost a customer or whatever. And so I think too often founders sort of like don't realize that there's more going on behind the scenes of the people that you're talking to and you need to create a way where you become number one on their priority list versus all the other priorities that they have. And they certainly have other priorities. Nobody realizes that, nobody thinks about that. How do you work your way up from being like number 10 priority on a given day to number one priority for a period of a week or two? That is the level you need a conviction you need to see and build in order to get something through on a semi-reasonable timeline. And there might be other problems. Maybe they've invested tens or hundreds of millions of dollars in a company that lost a big deal or, you know, Claude is beating the product and is like, they gotta figure that out. Like that's money that's already been spent and they have to help like the founder and work through the navigation of that or else that company could go to zero. And so how are you as an N+1 company and investment, although extremely impressive, like worthy of that counterparty's time to focus on you to getting through to a yes or a no. That's something I think is not commonly talked about or thought about. Is there any way to do that tactically because we see founders make a lot of slips and mistakes during this part where they're building FOMO but maybe doing it in ways that are shallow and then to come back to bike. - I think some of the questions that you have, like what's going on with you? Like you can sort of tell in the stress or the, you know, of the other side, like how busy are they? How not busier they? How excited are they with you? You can sort of like read into that a little bit and it's not a perfect science because everyone has a different personality. We tend to be happier and more excited and other venture firms maybe are more understated and you know, so it's hard to know. So I think knowing who you're meeting with beforehand and sort of like how they operate is probably a good thing. But that's probably one of the questions. Like hey, how are things with you? Like how is the portfolio going? What's going on? And you know, if you could sort of like glean some of that, you might have, you know, a better chance of getting more air time with them. And also it is oftentimes so much more VC lead in terms of their proactive engagement. If they're calling you, they're texting you, they're emailing you and sort of like on top of it, that's a good proxy for interest. Same thing for us when we flundered is to keep bringing up our own examples. But when somebody is constantly asking us questions and wanting to get back on the phone and looping in other members of the team and spending time in the data room and like we can see all that just like founders can see with us. Like you know they're interested. And so actions talk bullshit walks. Like you gotta like, you know, see what the actions are to validate interest. If they, you haven't heard from them, there's no engagement. You know, their actions don't, you know, suggest that you should reengage aggressively. - Yeah, a common thing. - A dating man. It's like, didn't go back in time. I don't know, I've been married for 13 years with a bit of while. But like, you know, in the course, coursemanship process of all of this, like if it's not being reciprocated, the chances of being a yes or a rather low. So it's the same thing. Put yourself back in high school. And VC, the ecosystem is sort of like high school. Nobody says that, but this is all high school, man. And so if it's like high school dating and the other person's not interested in you, you know, you might want to take the hint. It's funny, Andrew, our colleague, this whole part of the process, he had the same metaphor for being like the prettiest girl at the dance. Like how do you end up making yourself the prettiest girl at the dance that everybody wants to dance with? But you have to do it in an authentic kind of way. 'Cause we can see through that, we talked to other VCs too. So building FOMO and saying that X, Y, and Z fund, and we have a term sheet with them. It's like, well, a quick text away from figuring out if that's true or not. And there's a lot of deals that end up ending that way. One of the common questions or things that we get here are I'm over subscribed. It sounds weird. It sounds like a nice problem to have. But oftentimes founders do get to the point where they're slightly over subscribed. They have one or two VCs that maybe are circling back after saying no two weeks ago, but now the round is about to be closed. They're interested again and adds this weird shuffle of who do you want on the cap table and who do you want to leave off. So the question for you is, what is some advice you give to founders on making the right choice if you can? Because you mentioned this as a courtship. It's an important relationship that sometimes you only get two weeks, maybe two hours worth of meetings to make a decision on, how can they make the right decision and picking the right investor to leave on or leave off? - If you're in the unique position where you have multiple offers, and it depends on leads, follows, co-leads, so on and so forth. So there's a handful of combinations and permutations of this. Ultimately, if it's somebody, if you're up against multiple parties that all want to lead, saying you're over subscribed, it's probably the wrong word to use. It's probably a good word to use in terms of followers. But ultimately saying, hey, I got multiple offers I'm trying to pick the best partner. And what I see go wrong a lot and it drives me crazy when we actually have our own founders that do this is they optimize for valuation versus the partner. Like if we all believe that this company and you as the founding team believe that this is gonna be a multi-billion dollar, deck of billion dollar outcome, optimizing for valuation within general ranges at an early stage is just not smart. I don't know what else to say. And because over, it's almost like an indictment on your own confidence of how big this is gonna get. So you optimize for the right partner, which is a combination of what they offer, their brand, their network, you know, how hard they work, so on and so forth. All those things should be taken into consideration. But if you're optimizing for value in terms of delusion, yeah, sort of a problem. But there's a not only is out there where some people like who are not native to the venture space will be rather predatory in terms of valuation. And, you know, to a certain extent, if that's the only option you got, beggars can't be choosers, man. So like at some point you gotta get off your high horse and just like capitalize the business to get the job done and work with the team you have and the resources you have versus like killing yourself when you've gotten knows from the people that you wanted to work with if that's the case. So, you know, you gotta be realistic, but at the same time, don't optimize. Like if it's a, if you're raising a series A and it becomes like, you know, a $15 million round from like your ideal partner at a 25% lower price versus a $20 million round at a 20% higher price from somebody that you really isn't your favorite and doesn't credential you the best way possible then I'd take the lower valuation seven days out of the week and twice on Sunday. - Yep. - All right, let's say that they've made the right choices. They've closed their round. What's some high level expectations of what maybe you as a VC are expecting on behalf of the companies, what should the founders be doing for updates or communication and then likewise, maybe what are some of the expectations that founders should have of the VCs that are now on their cap table? - Too many VCs invest in our sort of like gone until the next round basically. And I think that's the majority of the industry. - That's the expectation setting up. - That's true. - That's true for the majority of the industry. But I think for us, what we want is like not over engagement because you have over engagement that implies that you don't know what you're doing and you can't execute as an executive team yourself. And so I think that that is a bad thing. But the extent, like, but also founders are really, really bad about asking for help. And that's also I think not great. To the extent you have things that we could actually do, we want to do it. We have one of our founders that actually, like Ghost writes me emails to candidates he's trying to close that's basically in my voice. And I basically just need to copy and paste it and send it and hop on the phone and help him to close that candidate. He puts me to work. I didn't ask for it. He forces me to do it to close these high level researchers and engineers he's trying to bring on. Dude, thank you. You just told me what to do and you actually made it really, really easy for me to do it. The ones that I think are less useful are, hey, can you help me with this? And I really don't know what to do with that, right? And it's not that I don't care or don't want to. I just don't have the action plan. Just make it easy and do the other persons work for them. If you have something you actually want done. Customer intros are another thing. We have another founder who was like, sinked his LinkedIn with our LinkedIn to go through mutual connections. I don't know how he did it. And ultimately he's like, he's like, hey, do you know this C-so at this firm? Like if so, how well, if you do, could you actually send him this very specific message about the thing that we're doing that I know they have a problem for? And like we've done this like for 20 different customers on like 17 of them, like, I don't know how I'm actually connected to this person, but for three of them, I'm like, yes, that's a buddy from whatever, no problem. You framed it in a way that's solving their problem. I look like I'm doing this person a favor by bringing you in, but I'm actually doing you a favor. Like that architecting is like really intelligent and all of us are happy to go to work and do those things. On the founder side, I think also a lot of people don't really think about investor management regardless of the size of the investor within reason. But if they're a material investor, they own five, 10, 15 plus percent of the company. Like it's nice to get an update, especially as you grow and you outgrow sort of maybe those early stage investors, it doesn't need to be monthly, but quarterly would be great. Some people send us monthly just emails, you know, BCC all investors or to their investor domain. That's really, really nice, 'cause at least like we feel like we know what's going on and we can be helpful if required. And also we have investors too that we need a report to. We have annual audits, we have to do that too. Every firm does, that's an institutional firm. And so I think sort of like putting yourself in their shoes is a great partnership thing to do. And partnership is a two way street. It can't be a one way street. And so I think those are the things that we appreciate. Quarterly updates, you know, even follow it up by an individual call. You can have a bigger cap table, maybe doing a group call. You know, our founders who do that the best or sort of like a combination of written updates and some form of a quarterly communication just sort of give a status update and ask for help where required. - That's incredible answer. The last question is, what are some of the stakes that you see founders make immediately after they fundraise? A lot of times it's the first money that they've seen, maybe ever, certainly this amount of money. What are some of the stakes? - They go fucking spending. They go spend it all. That's the biggest mistake. They just better know. So like that's the biggest mistake. Don't do that please. But you know, obviously, you know, I think the best thing you can do is like you fund raise on an operating plan for some period of time based, you know, to canalize your success of financing around. And so I think as long as you operate, you know, in conjunction with that high level operating plan, it's not gonna be perfect, it's not gonna be Nats' ass, it's gonna be different. So that's fine. But as long as you're doing that and just keeping investors informed, when you have a critical unlock or a setback, say, hey, like I'm gonna need more money for this next unlock. And at least people sort of like, you know, I've heard it a few times. It's not a surprise. Everyone hates surprises. You know, unless they're like insanely good surprises than everybody loves them. But in early stage company buildings, those are anomalous. The biggest problem is like, you know, you raise some money. We never hear from you again and you spend it all and the company dies. That's bad. That was it. - Larsen, this was awesome. Thank you so much. There's a lot of information packed in here. We're gonna try to pull some of these out and extract them as best we can. Thank you so much for being on. Any last places where people can follow you, find you, learn more about you. - I'm pretty active on LinkedIn, trying to be active on X. - So you can find me more on LinkedIn these days. So everyone has our growth areas and no one's perfect. So I have plenty of growth areas. So you can find me on our website, harpoon.vc. Also blackflag.vc. You can find me on my LinkedIn, Larsen Jensen. Find me on X, Larsen Jensen, USA. But I'm building that over time. So really appreciate you having me on and allowing me to chat for a while. - Yep, appreciate it. Thanks, Larsen. - My brother, good seeing you. ♪ It's pitch pass, it a rated flash ♪ ♪ Story beats data when the story lines pass ♪ ♪ Vision's the ignition ♪ ♪ But the numbers still the right ♪ ♪ Conviction and precision ♪ ♪ Watch investors collide ♪