Riley Loftus | Harpoon Ventures

[Music] Hey everybody, welcome to another episode of fun raising a podcast where we interview top early stage investors and get you the first time fundraising founder all the tips and tricks that you need to close out your very first round. And today I have very special guest, a colleague of mine here at Harpoon Ventures. Riley today you're going to give some feedback I think that's unique, similar to Matthias another episode that we recorded because you can provide an insight as it relates to Harpoon Ventures, but then you are also the front lines for Black Flag in which we get hundreds of applications. We've gone through over a thousand now. So you can give a little bit of feedback I think on both. So this is going to be a very special episode. Let's start really quickly for the folks that don't know a quick introduction of yourself and then a quick intro of Harpoon, what we invest in, average check size and the stages we invest in. Yeah, excited to chat today Matt, so this will be fun. Yeah, so as Matt said, I'm Riley an investor on the the Harpoon team here. And so Harpoon we're fun based on a San Diego invest broadly in what we like to call critical technologies to America and the West. Make me everything from AI and compute the cybersecurity, software infrastructure and then a lot in the broad deep tech umbrella with everything from biotech to energy and materials to defense, aerospace and so a lot of exciting things we've done there. We at our core, we're seed investors writing about a typical $3 million check is where we like to invest there, but then with Black Flag as Matt mentioned, we're doing a lot more exciting things at the earliest stages, you know, even sometimes pre-incorporation with founders who are still at their current company, just with an idea. And those checks are typically coming in the UK to a million range and then becoming with some subprorada and follow on in those later rounds to support those those exciting founders there. That was perfect. So some of these questions we're going to go to next are a little bit more about you first being how did you get into VC? What were you doing before VC to give people a little context and maybe why you made the decision to jump into VC? Yeah, absolutely. So, you know, I started my career doing investment banking for about five years and then went into private equity doing middle market buyouts of software and infrastructure companies. And so, you know, I had a little bit of investing experience that are my feet from that. But really, you know, back in my investment banking days, we I worked in an interesting bank where we had a model where we would actually engage with clients a bit earlier than when you typically get, you know, a bank involved. So, even at like the Series A stage there and we would actually work as their exclusive banker for each transaction up until an exit. And so, this actually gave us the unique opportunity to pitch and source some companies that were, you know, way earlier stage than most bankers are seeing. And then kind of live alongside them as they raise their Series B Series C and then eventually did a sale or an IPO or something like that. And so, really wanted to get back to doing some of that more early exciting stuff. And, you know, not to harp on the private equity industry too much, but it's not as exciting when you're looking at some, you know, off-wear companies where you're getting some of even some multiple expansion and maybe doing some head count reductions and more operational things and much later stage company. And so, really wanted to see, you know, those truly exciting early stage ideas that I was seeing back in the day. And so, it was very happy to join the Harpman team to get back to that. Yeah. We're a little biased. We say often that, you know, we love our job. We have the best job in the world. It's not always easy, which is why one of the next questions that founders wanted to know was, what is your favorite part about being a VC? And then what is your least favorite part about being a VC? Yeah, I mean, I think the favorite, both these answers are going to, you know, kind of be an extension of what I was just talking about before that. But, you know, my favorite part is probably that no, no day is the same, right? You almost get to be a kind of a perpetual student where you're learning something new every single day given the vast majority of our job is meeting with new founders, learning new ideas, seeing new technologies, things like that. And so, I think that is what makes me so excited to wake up to do this job every single day. And then on the flip side, I think the least favorite is, you know, kind of what I was talking about in the private equity world, which is some of those hard conversations. And whether that's, you know, passing on a founder for whatever reason that is or making a tough call on a board and a board meeting where it's, you know, company things aren't going according to plan, things aren't going as well as they thought they were. And you've got a pivot or you've got to, you know, get rid of some of the staff or whatever that is. That's a part of the journey. That's a part of the job. That's a part of the founder life. But, you know, that's not the most fun thing. And so that can always, you know, that's probably the least favorite part of it. Yeah, for sure. It sucks. What is another question that's similar, but this was another popular question founders wanted, which was, what is something that you wish founders maybe had a deeper understanding of as it relates to being a VC, a little peak behind the curtain, maybe? Yeah, I'd probably say it's that, you know, we make mistakes. I'd say that's probably the biggest piece. Like, you know, our job, as I said earlier, is meeting as many founders and seeing as many new ideas as we can. And just unfortunately with that vast amount of volume, sometimes, you know, whether the intro called and go well or something came up in diligence, you know, we're going to miss some exciting opportunities. That's just the way it works in venture. We're going to pick some good ones. We're going to pick some, some ones that don't go well. And then we're going to miss some great ones. It's two. And so I don't think that, you know, in every case, should mean that the founder takes it back. Because like, you know, I have a terrible idea. This isn't going to work. That's just the way it goes as a VC. And so I think particularly one of the hardest things about being an early stage, you know, preceding seed investors, just, you know, if you don't have a growth or, you know, a later stage fund focus, you're going to miss some things and you're not going to get the opportunity to look at it again. And so, yeah, I think it, you know, sometimes founders can take it personally if you're passing on the opportunity. And I think it's just that's the way it goes. Unfortunately, we see so many things that we're going to we're going to make some mistakes as the humans we are. No, that's a great answer. Honestly, so that's one of my favorite ones I've had. I've had dozens of these and I haven't had a VC mentioned that. But that's a good way to look at it is we do make mistakes. We're not always right. And I think sometimes founders maybe miscontrude as being, you know, we're not a fan of theirs and we're not supporting them. That's not always the case. And a lot of times we make mistakes. Yeah, we make the mistakes. Yeah, and I've had a lot of calls, you know, six, 12, 24 months down the line with folks from like, you know what man? I'm sorry, you were you were right. I was not right at the time and I wish I gave you the check back then and I can't give you one now. But I think a fun thing at Harpoon too, if you talk to kind of anyone across the team or founders that we work with is I think we help with a lot of companies. We actually don't end up investing in or we just kind of keep up with them, go swim by the office anyways or we'll post on acts or on LinkedIn about their fund raises even when we're not on the on the cap table. And so it's another fun thing of Harpoon is just being able to stick along some of the people because we want the critical technologies to win and whether we're it's better if we're on the cap table, but even if not, we want them to win too. It's funny. I've heard founders mention that we are in some cases more helpful than any VC on their cap table and we didn't even invest. So, wish it was the case more often. But all right, last couple questions on your side here. What are some of the industries, problems or spaces that you're personally most excited about? You mentioned some of the spaces we are at Harpoon, but anything in particular for you that's most exciting over the next few years. Yeah, I think what I've been the most excited about and what we've been digging into a lot recently is more things kind of on the picks and shovel side, right? Things, the technologies that facilitate the end product that really ingrained themselves kind of become the infrastructure of an industry. I think a great example of a company that we invested in a couple years ago was Mad X, right? So many different end use cases for AI right now that sometimes it can be hard to differentiate who's going to be the winner. And so, we looked at what's really going to go in the infrastructure on that side. And so we found Mad X, which is actually enabling building the chips to enable and power the LLMs. And then going even earlier in the stack, someone like Al of Atom X, right, who's doing small modular nuclear reactors to actually power the data centers. And then looking at on the deep tech or the defense side, one I was super excited about recently was material hybrid manufacturing often gets a little confusing because we've got Mad X and material X. But and also both in the infrastructure kind of enabling set of things, but they're actually pretty printing batteries non conformal shapes. And so, you know, there's 500 drone companies out there right now and 100 UUV companies out there right now. So how do you go earlier in the stack? You look at who is building the batteries to power these things. And so that was a super interesting one there or someone like an era drive, which is doing the autonomy software for satellites or someone like a general galactic who's actually doing a new water-based propulsion to move those satellites rather than picking the end actual satellite manufacturer. And so I think that's where I've been really excited to invest recently is, you know, ingraining yourself in the infrastructure of these end products that are going to be around for a long time, but where there's often a lot of competition. Yeah, I love that. That's a good answer. Our last question here, this is a little bit of time for you to prop Harpoon up a little bit. Why should founders pick Harpoon to be on their cap table? Yeah, you know, I think probably the biggest thing is we do a lot of support. And so, you know, we've got government go-to-market guys in the house who split their time between, you know, investment diligence and actually supporting the companies. And so, you know, they've actually earned up to, I think it's about $1.3 billion in earned contract. across the portfolio, you know, everything from helping out with small cibers to, you know, a $50 million contract with the Army, all the way up to, you know, very large, multi-hundred million dollar programs of record. And then, you know, helping with congressional ads. And we've got a guy, Clint, out in DC who does all the things in DC that I don't know how to do. He wears a suit and tie every single day and has his foot in the door and knows all the people that, you know, quite frankly, most people have no idea how to get in contact with and don't know how to play the game. And it's very important today, I just given how much the government this administration is investing in critical technologies. And so I think that's one of the big things. Secondly, you know, I think if you asked a lot of people, they'd say we're probably not like your typical VC. And whether that's just, you know, we're different people, we're maybe sometimes more casual and, you know, easier to get along with. And so, you know, I think it is important. VCs are with you for a long time. And so you do want to have a good, you know, personality fit with you. And so I think, you know, everyone at Harpoon passes the airport test where if you got stuck in a, you know, in a delay or a canceled flight for five or six hours, you wouldn't want to, you know, go absolutely insane and sit at the bar by yourself. You'd be having an hour with us. Yeah. I love that. Or maybe a VC that, yeah, you don't really like that much. So, yeah, I agree. All right. Let's get into what people are here for the fundraising process itself. We break it up into three different parts, the first being, how do they get into the room? How do they get a meeting with Riley? Second is now they're in the meeting. How do they knock it out of the park and hopefully earn additional meetings and go through the diligence process. And then the third step is what does that actually look like to push a fundraising round over the finish line, building up a cap table of choosing the right VCs and everything there. But going back to the first bit, a lot of folks listening, they haven't fundraised before. They maybe don't have a roll of decks. They maybe have a deck and they're thinking about fundraising. A lot of times we see them building up a list of VCs that they want to include or put on their cap table. Any advice or feedback you've give to founders on what characteristics or traits or things they should look for in those VCs? Yeah. You know, I'd say, you know, maybe goes a little bit back to what I was talking about with Harpoon is, I think, you know, as I said, the VCs are going to be with you for a long time. So, good fit is really important. And sometimes that even goes down to, you know, the partner, the principal, or the VP level of who you want to actually do the diligence process with and who potentially is going to take a board seat or a board observer seat or a lot of cases with Harpoon. We don't have a board seat, but I kept you up with my founders at least every other week. And so I think that's something really important to figure out there. And then yeah, I'd say to it, especially at the early stage, it's probably important to look at what the, you know, the fund's focus is. I think sometimes it can be nice to have a fund that actually specializes in your space rather than going with a broad, you know, generalist fund, which may be a little bit more okay at the kind of series A, series B where you're looking for a good name and a bigger check. And maybe don't need as much, kind of, you know, ongoing support there. And then yeah, I think it's important to just go along with the fit and everything like that is someone who's going to give you ongoing support and can, you know, write you a pro rata check in those, you know, subsequent rounds and continue showing support. So that's a good response. Next question was kind of more around how do they actually, now they have a list. What is the best way maybe for you when you receive a pitch deck or an email? What are some of the best ways that founders can start on the outreach process to get it in front of you? Yeah, I mean, I think the absolute best way is if you can get a warm referral from another founder. I mean, I think that speaks absolute volumes if someone else I respect is referring you and saying that I should take a look at it seriously. And additionally, like if you've raised a a pre-seed round or something like that, getting an intro from, you know, one of those investors on your cap table is great. And I think the flip side is where I can get turkeys. Maybe you have some friends in VC and maybe they're connected with Harpoon and you ask them to make the introduction to us, but you get this little weird space where it's like, why are you introducing this company to me, but you're not investing? And so I think that's a trap some folks fall into because you know, I think a lot of people have friends in the VC industry, but it turns into this weird game of why would you introduce the best founder you've ever seen to me if you're not backing them. And then maybe just on the flip side, you know, some things maybe not to do is, you know, if you're a founder getting reached out to by 50 VCs and it's just a blanket copy and paste and email, you're not going to respond. And so think about that the same way as if you're just sending something that clearly was copy and pasted to, you know, a list of 150 VCs and sometimes we even get the brackets with TBD fill in name a lot at the top of it. You know, that's just that's not going to catch your eye and yeah, maybe going back to the the question at the beginning of, you know, we just get so much volume of inbound and things like that that sometimes that I'll just slip through the crack even if it is a great idea. Yeah, exactly. You probably more than maybe certainly more than most VCs see probably more pitch decks on a monthly basis than then most, especially because of Black Flag, we get hundreds and then we have tons of investors and people that send us pitch decks all the time. So let's go into the pitch deck phase. Usually it's it's kind of the homepage of what these companies are trying to do. Any feedback on what founders can do to make their pitch deck stand out. So I know it's kind of a high question kind of go in any direction you want with it, but again, you see way more pitch decks than most people, which are the ones that maybe stand out the most? Yeah, I mean particularly through Black flagged, given the the amount of applications we certainly do see a lot of pitch decks. Yeah, you know, I think particularly with like the precede and the seed stage, I think it's important to be concise short and you know, really be able to explain what your product is and things like that. And I'd say when I'm going through a pitch deck, particularly what I'm you know, gravitating towards and I think is the most important is a very clear overview page of what the product is. Like I can't tell you the amount of decks where you get kind of 10 to 12 pages in and just like I don't even know what the product is. I now understand there's 10 problems in this industry, but I don't know what you're solving or how you're solving it. Or you know, you see a deck where it's just so tech heavy that you're still kind of looking at yourself like, so what is this actually doing? And then I also think with the preceding the seed, it's we're probably spending a lot of time looking at the the team page and then looking you up and seeing what your credentials are and then actually doing references on you with you know, probably some people that know you that we have in our network. And then I'd say to it, maybe maybe a trap people fall into is you know, spending a lot of time trying to build out the tam and going really deep into that everyone exaggerates what their market size is and their pitch deck on the flip side of my banking days. I had to build out slides that exaggerated it as well. And so you know, we're going to do our own independent diligence there and figure out what the market size is in our mind. And so probably spending a little bit less time, you know, looking at that slide and really really want to understand what you're doing so that we can level set on what to ask you during that intro call. Another question that we had folks ask was how important is design of their pitch decks. We get a lot of founders that are asking about should they hire a pitch deck agency. Obviously, there's a lot of good AI tools out there now that can do make your deck look really good. But how important is the aesthetic part of a pitch deck for you? You know, it's funny. I think if you've got a really great idea as long as it looks good enough, I think that's fine. I think one of the greatest examples of a VC website that speaks for itself is if you get a benchmark.com is like nothing but a logo. Or a great example that I talked about earlier, our company, Matt X, you know, when we got that pitch deck, it was black text on a white slide. And the website is I think still black text on a white page. And then, you know, you flip to the team slide and you just looked up who they had hired and how ambitious the vision was, which was, you know, we're going to compete with them video. We have to people to do it. That was all we needed to see. So I'd say probably at this stage, you know, don't fall in the whole pang. Someone to do it. As you mentioned, there's a lot of good tools out there to do it for you. And so I think the content and what you're doing who you are is more important at least. At least we see a lot of technical decks. How can founders explain or present hyper technical ideas? In a way, you mentioned obviously simplicity, clarity and understanding the problem and the market and all those things is so important. A lot of times you see pitch decks where the technology can kind of get in the way almost any feedback for how super technical founders can kind of cover both grounds, show how impressive their technology is, but also make it clear. Yeah, I always like to say it, especially on a call. If we have a really technical deck, but we get on the intro call, I always like to say, you know, either treat me like I'm really stupid or treat me like I'm like your middle school cousin and explain it in terms that, you know, they could understand like you're going in, going in for your kids, you know, what does your dad do for work day or something like that and explaining it to them. And so yeah, I think it's great to have some of those technical slides in the deck, but you really do need to have a slide that lays it out as here is at a high level what we're solving. And I think a lot we've seen recently, it's like, here's the problem, here's how we solve it slide that really lays it out in basic terms and then digs into what they're doing specifically on the subsequent slides there. Yep, I like that. Maybe last question on the phase of everything before the meeting, any mistakes or additional advice that you would give founders that are trying to get in front of EC's, creating pitch decks or cold outreach, anything there. Yeah, I mean, I'd say it's hard to find the balance, but you do want to be targeted. I think so it does go back to some of your questions about, you know, who should we we look for, how should we put that list together? I think it's a tough balance because you are going to get a lot of nose. You're going to get a lot of people who don't even answer. But I don't think you want to be reaching out to 300 or 400 people on a list. That's just going to be a waste of your time. And quite frankly, you might end up with 75 intro calls out of that where it was never a good fit with the fund. And so I think you do need to be smart about pulling together that list, making sure it is in their focus, making sure that fund has capital to deploy, making sure you're going to be able to actually get them on the phone. So I'd say probably finding that right balance of reaching out to just enough where you're going to find some that'll actually join the syndicate, not too many that you're going to burn yourself out and waste a lot of time on. Yep. I like that. All right. Let's say that they've done all these things. They're, they're, their pitch deck is great. Everything is great. They're now going into the meeting with you. What are you looking for from your side as a VC and maybe even specifically for Heart Poon and these intro calls? What are you trying to get out of them from the founder? Yeah. I think the biggest thing that you can usually tell within the first five to 10 minutes, honestly, is passion quite frankly. You can tell that this founder, that this is everything to them. This is going to be their life's work. You know, a lot of times I like to ask the question, you know, what, what are you at the end of the call? What do you see this turning into in seven, eight, nine, 10, 15 years? And maybe this is shocking to some people, but some founders will say, you know, I see this as being, you know, kind of an acquisition by Google or something like that. And that's great. That could be a good outcome. But I think the answer that really excites me is, you know, if we got an acquisition offer in five years, I'd say no. I want this thing to go public. I want this to be a longstanding company. This is what I'm going to do for the rest of my life. And so I think you can usually tell when that energy and excitement and passion comes through the founder, especially with, I mean, going back to my answer and kind of building the infrastructure of the picks and shovels. Maybe it doesn't sound like it's the most exciting idea in the world. But they bring out that energy, they bring out that passion and get you as excited about, you know, something like, you know, advanced manufacturing, which maybe doesn't scream as like the $10 billion super exciting sexy idea to do. But those founders can bring that out in the call and get you excited on that call as well. Yeah. On the opposite of that, are there any red flags? Is it when they don't bring that energy? Are there any other red flags or things that founders do wrong on those initial calls? Yeah, you know, I'd almost say it's like, you know, being pretentious and maybe don't show that energy in the call and not even, you know, maybe not having the willingness to answer some of those questions. You know, I'm not a technologist by background. And so back to one of your other questions, like, I am going to ask that question of explain it, you know, super basic terms. What are you doing and help me get to the bottom of your technology? And I have had calls where you can tell that the founder seems frustrated or doesn't want to explain it and easier to understand terms. Really, it's just going like super deep in the tech jargon and talking over your head and things like that. And so I think when you can have that early energy and that early conversation about what you're doing, it leads to much more fruitful and fun conversation that then opens up the, you know, kind of deeper diligence questions after that. Yeah. That's a good way to put it. I think that we see and have so many of these meetings, they all kind of blend together. So if you can stand out and be respectful, all those things, just any like normal conversation. Yeah. I think, yeah. Yeah. And a green flag too is, you know, I think sometimes people make some mistake and wanted to get right into the pitch. Like, I like to just kind of, you know, talk about personal things for the first, you know, five, 10 minutes is fine. And if we go five, 10 minutes over because of that, that's great. And so, yeah, particularly when you start meeting in person after the kind of intro call, I think it's great to, to level set on that personal side too. Yeah. That's that's so true. Similar to that, one of the questions we have from founders here was pitch deck or no pitch deck. Do you have a preference? Is there a balance? What does that look like? As on the call specifically, I actually love the conversational no pitch deck. And then if some of the questions lead to something a little deeper, pull up that specific slide or if you have, you know, something that goes over the deck or if you have something that goes over your go to market or any of the kind of contract wins or customers you already have, you could pull that up in the moment. And then I like when people actually then close it again. I love in person meetings, not with the pitch deck, whether it's like over a coffee or just sitting in the conference room or something like that. And so I think when you're, I think a little bit when you're going slide by slide, I don't know, gets you back to that kind of doing your middle school and high school presentations where you end up reading off the slide inevitably. And I think it leads to a better conversation if you're just having a, you know, no slides chat over Zoom or something like that. Another one of the questions that founders wanted to know is whether there's a preference on having all the founders on the call. This is the initial call. Keep in mind, just the CEO, any thoughts or feedback there? I think it's probably dependent company by company. Yeah, I think sometimes the intro call, just like the founder CEO works perfectly unless you know your co-founders going to talk a lot about the product or you have another co-founder is going to talk a lot about the go to market and the commercial motion. I think sometimes it's funny when you have like three co-founders on and two of them are on mute and don't say anything the whole time. But yeah, I'd say maybe it's the intro call can be the main founder CEO and then those subsequent calls you kind of, you know, tap people and dance with some of those diligence questions you go into the product tech or other things. Yep, that's great. Last question here. Are there any questions that you would recommend founders ask of the VCs during this first first process? Not questions that are for you, but to get excited about it or to be like, oh, I'm glad they asked that question, but just for founders to take control of the process themselves. Yeah, maybe a more like kind of basic one is, you know, it's so easy to sound. I think it is important to ask, you know, whoever you're talking to from the VC if the fund is actually deploying capital right now. You know, for whatever reason, you know, people could be in between funds like we pause on new investments, only doing follow on and pro rata all sorts of scenarios. And, you know, I think you could end up talking to VC for a month and then they tell you at then like, hey, actually, we don't have the capital. We could, you know, we're going to start deploying out of our new fund over the summer or something like that. And that's just a waste of your time, unfortunately. And then kind of maybe another silly process wise one at the end is, I think it's important to ask like, how long does your diligence process take? You know, they'll tell you what they need, but you don't want to get stuck in this like, you know, two months loop of them continuing to ask for random, you know, diligence requests and things like that. And so I think that's an important one. And then on the more kind of fund and personal side, I love when a founder at the end or even I've sometimes had it at the beginning where it sort of feels like a test to see if I went through the pitch deck or not as they ask, what gets you excited about my idea? And I think that's super fun to chat through where I get to talk a little bit about why, you know, I liked the deck and why I wanted to take the intro call. Perhaps maybe another kind of similar to this question, what do you think about for scheduling the next meeting? Is it something where founders should try to schedule that next meeting? On the call, do you kind of leave separate ways and then figure it out later? What's the right way there? And it's probably hard because there's not really one right answer. It always depends. Yeah, I do get why a lot of founders do that at the end and they're like, hey, you know, it's the book something right now where I've even had someone at a happy hour come up to me and hold out their calendar and ask me to put my email on a time and I prefer to do it after the fact. I actually love, I think the best case scenario is at the end of the intro calls, exchange phone numbers. I think texting just gets things done way quicker. I'm also a big fan of just, you know, calling people out of the blue and ambushing them with some questions. And so I think that's the best way to do it. And I'll be super responsive that way too, is it sift through the noise of the inbox going right to the phone sometimes? But yeah, I think it can just feel a little strange to book something at the end of a call and kind of waste time with that awkward going back and forth. And you know, schedules change so much for us. And last minute travel comes up all the time and I'd rather schedule something that I can make rather than booking something at the end of the call and having to reschedule on you. The other thing too is that oftentimes it might just be one of us on these intro calls. It's hard for us to book a time. We don't know the rest of the team's schedule. You know, it's hard for us to coordinate that right then and there. We probably want to get more people involved in that second call. So yeah, don't take it the wrong way when we have to say we can't schedule something right now. Yeah. All right. They've crushed some initial meetings and now they're kind of in the meat of the process, which is typically diligence thing, a little bit of hurting cats. But maybe we start with on the harpoon side. Could you shed some light on what the harpoon diligence process might look like, at least at a high level? Yeah, I think at a high level, which probably isn't too dissimilar from other funds, is you'll have to intro call if they're one or two of us. Then that next call will typically bring in two or three or four more folks. And particularly if you either have a defense or a dual use focus, we'll bring in two to three of those government go to market guys we have on the team. And so that call will look like another overview of the high level of what you're doing. And a much deeper dive into what the product is and how you're going to open up those government and commercial opportunities to sell into on that front. And so then after that, it would look like another call like that, probably a bit longer. In between all these, we are independently doing our reference checks on you, the founding team, whether that's with other VCs, with past companies you've worked with, where we have friendly relationships with other founders, who maybe you know, all those things like that and then doing our independent diligence, talking to potential end customers and things like that as well. And then kind of, you know, just confirmatory final calls as some questions come up. As I said, I think a lot of us on the team like to do random phone calls and texting over questions, which some founders I think love doing that. I know sometimes it can be annoying if we're just texting you one off questions. But I think that's a big part of our diligence process quite frankly. Whenever it's possible to, we like to squeeze in and in person meeting and if you've got an office or some actual physical tech or hardware, that's always a fun way to do things and always great to do a coffee, a lunch, or dinner, or a beer or something like that as well to just connect on a personal level. So yeah, I'd say our process can take anywhere from one week to four weeks depending on the situation and the stage. Sometimes those earlier stage ones like Black Flag just move so quickly. But yeah, I'd say that's kind of typically what we're doing. Although it's a nice problem to have, a lot of times founders will get to a phase where the round's getting hot. Things are moving quickly. They have a lot of VCs that maybe VCs that said no three weeks ago are now coming back and wanting to get in. It's really stressful. One of the most stressful parts about the fundraising process is this period where you kind of have to start saying yes and no to certain VCs and you have to push people down to get people in. What are some advice you give to founders on making the best as you can, the right decision here on what funds to allow it? You already kind of mentioned earlier in the funds you're looking for, but any additional advice on kind of building your cap table for this very first round. Yeah, I mean, I think it's, it's yeah, a lot of the things we talked about earlier is what those funds focuses are. If they're going to be able to help you and assist you. I think you've also got to do your independent diligence as a founder on those funds. So a lot of people ask us for references of past founders. I think that's a great way to kind of sift through if you've got a bunch of offers is figure out what the other founders like about that fund and be very, you know, up front with them and you can tell them I have offers from, you know, these XYZ funds and I think a lot of at least our founders will be very honest about what they have enjoyed working with us, enjoyed about working with us, what they haven't enjoyed about working with other funds. And yeah, even as those founders like if they didn't like something about Harpoon or didn't like someone about whichever fund. So I think that's important just as we're doing references on you to do references on your end. And then yeah, I think sometimes people also these days talk about we want a big, you know, flashy multi-stage logo to set us up for the, you know, the seed or the series A. And I do think it's good to have, you know, good logos on the cap table, but, you know, sometimes I don't think it's as important that the pre-seater seed these days to get a big multi-stage fund because then if they don't come in and immediately lead the seed or the series A, then that looks, you know, interesting. And that happens a lot. Maybe you want to bring on another big logo at the A, but then folks are like, you know, why isn't your, you know, your lead seed investor who has, you know, series A, series B, series C capabilities, not investing in this round. So yeah, no, no right way to do it in a lot of different ways to think about it. Yeah. Yeah. And it's one of those things, especially with your first time going through it. It's almost the second or third time where you finally, it's so much to handle. It's so much. And it's kind of an impossible decision. You're almost like making, you know, a 10 year life decision based on what could be only a couple of weeks worth of information. So it's kind of an impossible piece. Are there any other common mistakes that you see founders make in kind of a later stage of their fundraising process or things that they should know as they're navigating these? Yeah. I mean, I'd say, particularly in the situation you're talking about where you have a lot of offers, you're going to get people offering bigger checks, you know, higher valuations. And I think that can be a trap to fall on, particularly at the early stage, if you don't deserve that valuation. And I think it always makes me think of that classic scene in the Silicon Valley TV show where the founders yelling at the bar about how he could have taken less money. And you know, yeah, it's unfortunate. We're going to go through cycles and in 21 and now where they're just getting some crazy entry round valuations for deep tech companies. And you want to make sure in a year or two years from now that you're going to be able to justify a bump up. And if you're raising it, you know, 65 out the gate, are you going to be able to raise a 115 in a year from now and you need it? And so just I think that's probably one of the biggest traps to fall into. And I know that can probably sound funny to some founders given we're trying to get lower valuations as a VC and get some ownership. But I think it truly is important to think about, you know, that phasing of valuations sizing, everything like that. No, it's been, it's been a common response that VCs. And again, it's because it sounds like we're giving them bad advice because it's like, yeah, raising a lower valuation. Of course that's what you should do. But a lot of VCs, the other some resources out there where you try to find the show how raising your series A and beyond certainly is when you almost, especially as a hard tech company, is when you really need that capital to exactly. And if you end up setting yourself too high at that seed, which is typically still very exploratory, it's going to be even harder to raise your most critical round later on. So it's definitely good advice. All right, let's say that they've closed the round out. Everybody's celebrating, you get five minutes to celebrate and then it's back to work and you know, the real work begins. But what are some of the things that founders should be aware of any mistakes that you see founders make right after they closed the round, maybe for the first three to six months after a lot of these folks, it's the first time they've seen money like this. It's hard to know how to spend it in many ways, but any advice for them. Yeah, I mean, I'd say it's all a part of the lead up to and how you're thinking about the company, but you got to be diligent about your burn and how much you're going to start spending. It's much better to have 18 to 24 months of runway and six to 12 months of runway obviously. And so I think one of the biggest mistakes we've seen is getting a big new office and hiring a bunch of people. I think some of my favorite preceding seed founders have been the ones who are incredibly diligent about those first hires and almost treating like the next 10 hires across engineering and when they eventually get the kind of go to market or commercialization person, they're treating those next 10 hires almost as co-founders, taking multiple months to hire them, you know, making them work in person, making sure it's both a cultural and a technology engineering type fit versus going out the way over hiring or you know, sometimes you know, counting on getting a big contract or being able to raise that next round and then hiring and doing a bunch of things to support that and the contract ultimately falls through or that next round gets pushed out six to eight months. So I think, you know, it's probably not a unique answer, but I think it really is just important to really manage that burn and runway and you never know when, you know, VCs are going to start tightening their wallets or we're going to go through, you know, a downturn and your customers are going to start drying out. If you're signed to the government, there's going to be a shutdown and your contract gets delayed four to five months. So I think that's probably the biggest, biggest mistake we've seen with folks and most important thing to think about. Yeah. Are there any other, I actually, maybe a different way of looking at it is the relationship you have with your VCs going forward. Any expectation setting or feedback you've given to founders is what they can expect from the VCs once that round is closed because sometimes founders get a little either confused or they don't really know how that relationship kind of pans out after. Yeah. I mean, I think it goes, you know, this is a lot to say with what we're talking about with choosing the right syndicate. We have heard from a lot where, you know, a lot of VCs write a check and kind of disappear of stop answering maybe dial into the board meeting rather than coming in person once a quarter or stop shipping up to the board meetings if they're a board observer or anything like that. But if you're choosing the right ones and you get the good people around the table, I think it just looks like a lot of random ongoing communication. As I said earlier, I'm a big fan of random calls, random texts about questions, things like that. And so I feel like that's the relationship I have with a lot of founders. I was texting one of ours about our dogs this weekend and then talking about making some introductions to him across our portfolio with potential customers and partners and things like that and then going to see him up in LA later this week to grab a beer. If you choose the good ones, I think it can look a lot like a friendship quite frankly where there's a mix of personal chat but also a lot of work chat. And then particularly with Harpoon, we are helping a lot on the government, federal, go to market motions. And so I think we have much more regular catch ups with our companies than a lot of other C's particularly at the early stages and where we're helping them out with those. Matt, you do a lot with website design and helping them with their pitch deck design and things like that. So I think you're catching up with them a bunch. We also help a lot with kind of fundraising strategy for those subsequent rounds. And so we're helping craft the story. You know, I actually make sure that they don't fall into those traps of the pitch deck that we talked about at the beginning of this. And we actually help with thinking through the investor list and helping make those more minute introductions. And so I think if you picked the right DCs, you're going to have a very good back and forth relationship where hopefully they're answering the phone call in the first or second ring or at least texting you back, setting up time. Last question is just around kind of open for you. Last minute feedback, advice, things you've given to founders that are just going into this fundraising process as a whole help maybe set the standard for them. Yeah, I'd say it's a broad piece of advice both for that and for building a company which is, and I mean, this is such a tough thing. But I think it's a giant problem where people fail whether it's the actual company fails or the fundraise fails which is refusing to be flexible and refusing to adapt. And we've seen some great companies where they had an initial idea which we loved the idea. We backed the founders based on that. But we truly, you know, we're backing the founders and not necessarily always just the idea. We're backing that you will be able to do something, you'll be able to get something done. And they made a technological discovery along the way, completely pivoted the business, brand new end product, now doing better than we ever could have expected. And, you know, we're thrilled for them. And I think that happens with the fundraiser process too, is maybe you and your head thought that, you know, you could raise a $10 million seed ground, but, you know, the market is telling you that, you know, you should go for three to four and then go up with that big round, once you have maybe a contractor, once you make that kind of, you know, hit that tech milestone. And I think that's important to be able to go for that. And back to the valuation thing, you know, maybe you had expectations in your mind for a much higher valuation, but that's not what the market says. It's more important to go for that good investor, that good syndicate, rather than continuing to fight and getting stuck trying to get, you know, double the valuation that the market's giving you. So I think those are the best founders where we can really believe that they're going to do whatever it takes to get this business, to get this business off the ground and to continue to continue winning. And we always like to say too, is that we'd rather back a founder that goes down with the sinking ship and puts everything into it, rather than one that kind of just half-asses it along the way. And so I think that's probably my biggest piece of advice. Yeah, a lot of it. Riley, thank you so much. This was a lot of information. Yeah, thank you, Matt. I'm just under 45 minutes. Any place for a folkskin, continue along, follow you in hard-pune black flag. Any of the news there? Yeah, I mean, we continuously update our website with news and, you know, write down some things on there and then always feel free to reach out to me on LinkedIn or on X or email or anything like that. I'm always happy to chat with folks and get up to, you know, LA. I'm from the South Bay from Manhattan Beach and so spent a ton of time up in El Segundo, Torrance, Regando, Hawthorne, all that and spent a lot of time in the Bay area as well. And so hopefully, if anyone listening, get to hang out with you in person sometime soon. Yeah. Awesome. We'll appreciate it again. Like I mentioned earlier, I have the pleasure of working with you every day. So I'm sure that we will talk again soon. Yeah, we'll get to see you in person soon. Yeah, sounds good. All right. Bye, Riley. All right. Thanks, Matt. [MUSIC]