Preparing for the Pitch with Arianna Simpson

Transcript

[Music] I'm Ariana I'm one of the general Partners here at a16z crypto um I have raised Capital so I actually um do not only sit on the kind of investor side of the table but have also been the one kind of in the trenches pitching so um I have a lot of empathy for how challenging it can be um and hopefully also a few kind of words of advice and wisdom that will be helpful so let's get started so what we're going to cover today is basically how you begin so before you even start putting together your deck what are you going to be thinking about pre pitch so before you start talking to investors what is sort

of your plan of action the pitch itself and then post pitch so what do you do after you've hopefully successfully raised money so before you begin your deck what you're going to want to do is answer two really important question questions um I think a lot of people think about pitching as sort of just transferring information but it's really about answering questions that live in the Investor's mind whether or not they ask them to explicitly so I think the first one is really why is this a big market so um when you're thinking about positioning your company you don't only want to talk about why this is a problem or why what you're building is cool but rather also tell the story of sort of the big vision and the big opportunity

um and then the secondary part of of that question is why are you specifically the best positioned to tackle that problem um I think one thing we think a lot about as investors is How Deeply have the founders explored the idea Maze and how good is the founder market fit so why are you and your team exactly the right people to be building this particular thing so those are kind of the two questions that you should try to be answering in the story arc of your uh of your deck which we'll get to in a second this is a question that I ask every founder almost in in a pitch because I think it really gives the founder the opportunity to sort of set the stage for what it is that your ultimate vision is going to be um and

even if the investor doesn't ask it to you explicitly I think it's really helpful to kind of paint that picture for them so they can imagine like how big is this opportunity really assuming everything goes according to plan and nothing ever goes according to plan but you can still get to that place or somewhere similar over time so um I think that should be kind of part of the the intention of the conversation is helping them see what you see for your future okay so before you get started with the actual pitch it's really helpful to kind of have a plan of action and not be going around sort of pitching randomly so um I I would say one of the earliest steps you should take is build a list of the investors that you want to talk to and order them in terms of

timing so it's often best to start with some of the the friendlier conversations that might be Angels it could be even other members of your cohort or advisers who can help give you feedback on your pitch so that you're not shooting your biggest shot with the investor that you most want on day one obviously your your uh answers to questions and sort of your narrative is going to get more and more refined over time so making sure that you can really um hone your answers to be as precise and concise uh as possible over time is is really helpful another important thing to make sure you have a good handle on before you start talking to investors is your competitive landscape obviously um you know if if an investor asks you oh well what about X

company and you're like oh I've never heard of them that doesn't um you know reflect super positively and I think it can can make you look a little bit uninformed so making sure that you have a great understanding of um who else is in your market and specifically if the investors that you're speaking to have any existing relationships in that market um is is is important to do um and then you also want to go into these meetings understanding like who exactly you're talking to what size of check do they write are they focused on this category and so that way you know if you're talking to a16z crypto you don't have to explain what an NFD is but maybe if you're starting with a generalist fund um you may need to give a little

bit more background context so just really understanding who you're talking to I think is important okay so getting in in front of the right investors obviously you're going to want to put your network to do um the best use I will say warm intros are obviously the the best way to go if you can get them um but it's also possible to write a great cold email and we can talk about that later in in the Q&A um but yes if you can get a warm intro obviously that's always going to be your your best bet as I mentioned you're going to want to go with the friendliest conversations first and then move on to some of the more challenging ones later um and then lastly I think obviously in a market like ours where there can be significant sort of Market fluctuations and there

are definitely better times or Worse times to raise around um you you may want to take that into consideration but at the same time what you really want to focus on is having all your ducks in a row you can't necessarily control the market but you can control um you know how you're positioned to the fund raise and that means you know having a good handle on your financials or making sure that you're thinking about the the uh fund raise as it relates to kind of big product announcements and things like that so being a little bit strategic about the timing of those things can be helpful too I'll let you guys read the quote First Time Founders are obsessed with product second time Founders are obsessed with distribution I think um this is really really true and something that we see time and time again with

with Founders um I think a lot of people end up starting companies because they're obsessed with a particular problem or a particular product um but the reality is if you don't have good distribution nobody's going to care so making sure that as you think about telling your story you have a really strong answer on uh go to market is you know I think a necessary step to uh figure out before you start talking with investors too much and I know you've gotten a lot of great content on that front already from Jason I know Maggie is's going to be speaking on this um but um yeah I think that's that's really just something that cannot be emphasized enough because at the end of the day um distri you know build it and they will

come is like a big big scam in my opinion it doesn't actually work like that and so figuring out what it what are going to be the important distribution channels for you is uh you know a big part of crafting your story for investors as we said not just product go to market and distribution Partners obviously Partnerships are can be an important part of the go to market motion as well um and then in web 3 I think very specifically building and growing your community I think obviously that um varies depending on on what exactly you're building but for example for games the community is hugely important so really understanding what does your community want how are you going to engage with them um and having crisp answers to all of that before you start talking to investors now that

you've magically figured out all of your go to market and distribution questions time to actually get ready for the pitch meeting so you're going to want to understand the market practice beforehand to make sure your answers are are really crisp and then also tailor the deck to the investors you're speaking with so again if you're talking to a generalist investor um versus a crypt native investor it may make sense to have a slightly different version verion of your deck that goes deeper into certain areas or not um you may also want to develop a teaser deck that sort of has you know 8 to 10 slides but doesn't give the full everything um because what you're really aiming to do when you're sending the deck out hopefully with a warm intro is to get a meeting so once you've done that then

you can go into more more in- depth and you can certainly follow up with with more materials but I think in many cases um you're better off holding a little bit of information back and instead um just focusing on on getting in the room with the investor and then you can reveal when you're going into these meetings I think it's also helpful to try to understand what the investor can do for you um and have an answer ready to the question of how can investors help you aside from just giving you money um I think that does a couple of things number one it shows that you hopefully have done research and understand the capabilities of that investor for example if you're talking to someone who specializes in helping companies recruit then you say oh

recruiting um and that also helps the investor start to Envision the relationship of working with you um and shows them that there are ways that they are equipped to help that match what sort of you're looking for okay the pitch we've arrived at the critical moment okay so a few Logistics um I know these seem very basic but I assure you I see hundreds of not thousands of pitches a year and you would be amazed at the condition in which some of those occur so I will just uh air on the side of being explicit um number one make sure that you have good lighting and that the investor can see you and that you do not look like you are in the witness protection program so like no hats no hoodies like let them see your face cuz

they are at the end of the day mostly evaluating you guys especially at the early stages of of investing so make sure that they can see you um energy I think is super critical obviously if you are trying to convince someone to give you money you want them to be excited and so being enthusiastic about whatever it is you're working on um is another thing that again sounds very basic but you'd be surprised how often people seem that they're bored with their own idea which is makes it hard for you as an investor to get very excited um enunciate so make sure that you're speaking clearly and that people can understand what you're talking about um don't be late duh and then read the room so if if for example you're talking to an investor and at a certain point they

seem like they're totally based out uh it might be a good time to ask them a question and bring them back into the conversation so that it's not just you monologuing for um you know 45 minutes or whatever so I think some of the the core ideas that you want to keep in mind as you're going into the pitch tell a story slow down obviously energy but not talking so fast that people can't follow along um have a team slide and I would actually encourage you to put this at the beginning of the deck versus the end um I think you know investors are in most cases yes they're looking at the market blah blah blah but a lot of it is really a determination of do we think this is the right team to build this thing and so having a a slide that

really showcases what makes you guys exceptional as Founders and why you're perfectly suited to building this right at the beginning sets the stage for the rest of the conversation do not lie like not even a little bit no absolutely not um investors have by definition really good networks and so they're always at least the good ones is going to check on you know is this partnership real or is this customer relationship real or how does the customer actually feel about what you're building um and so it's just it's again seems like it would never happen but you would be wrong um so you know just make sure that you're being completely honest and then do your research so make sure that you are also asking the investor questions that show

that you understand sort of what they do um and that helps you make the conversation again rather than a monologue into more of a discussion connect the dots for the investor so obviously you guys spend so much time thinking about your personal history as well as this the the subject matter that you're focused on um but investors don't and so you need to kind of connect the dots a little bit more so you're going to want to make sure to tailor your pitch to each investment meeting um explain how your background is relevant to what you're doing I think also it's great to touch on sort of the motivation of why you're doing this um what inspired you to build this why are you so passionate about this particular problem um and then get into the substance of what you're actually

building so when you arrive at negotiations um number one do not be an um investors negotiate for a living I do this day in and day out so unfortunately even the best founder uh negotiators are going to have a lot less experience than the person on the other side of the table and the result of that is that it often can come across as like a bit contrived when you're trying to be you know pull a fast one over the investor um I think it's and by the way the best investors will not try to play those games with you either so I think you're much better off in all cases just being authentic and saying you know we want to you know hey is this the best you can do we're looking for something

that's a little bit higher on the valuation side perhaps rather than being like H this is not you know not for us so um you know keep that in mind I think always maintaining a good kind of dynamic of respect with your investors is really important I always think it it it's not to your advantage to try to say we're looking for X valuation um the reason for that is it ends up always being a conversation between you and your lead investor um but what can happen what you're trying to do really is eliminate the maximum number of reasons why people could tell you no so if you're not saying what the price is then they can't tell you the price is too high because they could set the price so I think that always puts the the conversation in a better footing um

and also at the end of the day you know there is no set market price for an investment it's always sort of what the founder is willing to to do and what the investor is willing to do so you're much better off leaving that kind of conversation to a specific negotiation with the lead investor as opposed to coming out of the gate and at the end of the pitch saying this is the the price that we're looking for you will obviously be saying how much money you're looking to raise and investors can basically do the math on what the approximate dilution is for a given round and sort of that that helps sort of set the parameters without you having to say what what the price should be the name of the game is momentum so um I think the the number one goal in

negotiations is to really figure out how can you get the maximum number of term sheets possible I also think that you know putting on my friend hat for you guys um you will be better off if you can get more term sheets so again increasing the odds of of the of that means what does that mean it means corralling your conversations it's not helpful for you if you're at the final stage with one investor and you haven't even had the first meeting with your other potential favorite lead so you need to kind of try to time box things if you get an offer and there your other favorite investor you know hasn't given you an offer saying well hey we have this offer on the table but we'd really love to talk to you can we move our meeting up is definitely

something that you can do so you know I think happy to get into into this more in the questions if there are but I think um making sure that you can kind of Corral investor interest and and get people to want to move along quickly is definitely going to be to your uh best Advantage um and then lastly you're going to need to deprioritize the folks who don't lead rounds and like I said you're still going to want to have early conversations with angels and folks like that to crisp up your messaging but when you get to the later phases of the fundraise at the end of the day it's going to be the folks who are leading who are setting the Cadence of the round um and you need to make sure that you also have enough allocation left for those people so um at the end of the day

focusing on the leads is is the right way to play that post pitch now you've gotten into the happy position of getting 17 term sheets and you're trying to figure out whose term sheet do I take um so as we said you're going to want to negotiate always keeping it professional but definitely there's typically a little bit of wiggle room for most Investments and so um especially if you have leverage and by leverage I mean the other 16 term sheets um you're going to be in a position where you can hopefully get your investor to work with you a little bit on price um be persistent so you definitely want to time box your negotiations and not let the process drive you know drag on for for centuries um get a good lawyer I really cannot emphasize this enough a cheap lawyer is

super expensive and you just won't get the bill until years later uh but it will be a very Hefty one so do not do that that um you especially if you're working with tokens or web 3 specific Concepts you do not want them to be learning these ideas for the first time on your dime so definitely making sure that they have done a lot of similar Investments to this and fully understand what your specific needs are before you engage um is is critical and then lastly in the same way that investors are going to be doing reference checks on you whether or not they tell you that explicitly making sure that you are also doing that on them meaning talking to other portfolio Founders and things like that um to make sure that they are in

fact the best partner for you um is something I would definitely recommend doing close the deal dum dum dum okay so now that you have uh closed the deal amazing time to celebrate but unfortunately you are not done sorry for the bad news um but uh you now get to go from phase one to phase two meaning from company that is pitching to portfolio company what this really means is a Vibe shift so you know you're coming into the pitch you're like we are so amazing We Are Gonna Change the World we're going to build a trillion dollar company and then you're like ah help these are all our problems um but that's what you should be doing because realistically now the investor is

committed you guys are partners and that's great what that means is now there's no benefit to withholding the challenges that you're going through what you really want to do is be very up run about those so that the investor can actually help you uh overcome those when you're thinking about how to engage with your investors effectively I'm sure you guys know a lot of this already as as you've been working with us and other investors as well but um you want to make sure to never surprise your investors especially with any bad news always better to lead with that um and you know your investors at this point are committed it's like a marriage but you can't get a divorce so you're definitely going to want to be honest and open and for coming in in the relationship um I think in if you're

working with a team like ours that has specific operating teams that are really geared toward helping investors um helping companies with all of the things that um that they might need whether that's go to market or hiring or other things um you want to make sure that you are familiar with all the operating teams so they they can really help you um and save you a lot of time as you come across some of these Concepts also make sure to use their Network as you're thinking about hiring or um vetting new new roles um and then remember that you know it's it's a marathon not a Sprint and investors are definitely in it um for the long term with you as well okay cool well that was everything I have um happy to answer any questions

if there are so a lot of the raises that I've seen be really successful a lot of the founders put the time in to like make their moment before they go out and raise and and I'm curious like what are some of the most impressive or unique ways to that you think companies have like made their moment before they've actually started their fund raise I guess if by make your their moment you mean like get traction is that what you mean yeah I think that's part of it um yeah well that's always I mean if you could just wave your magic wand and make traction then it it I promise it'll make all of your fundraises a lot easier um I think the challenge is that's not always possible and often I think some of the toughest f fundraises are you think you're going to be able let's say you

raise a seed round and you're like we're totally going to be able to launch our game or launch our thing um without another round and then of course that never works and so you're like a few months out from launching but you still need to raise more money those I think can be tricky rounds because you are um you know you don't yet have the metrics to show and investors are like H we already put a bunch of money and we want to see the thing go before we fund it further but that's not always going to be possible so obviously in a magical world in which you have perfect control over this you're always better off launching with metrics at the same time that kind of comes with some risks

because let's say you launch and your first version of your product kind of flops well then you're like oh well we did launch and now it doesn't look very good whereas if you're really good Storyteller you can paint the picture and sell the vision I mean at a certain point you need to launch but like in the earlier stage you can paint the picture and and sell the vision without actually having to like show them the metrics so you know there's there's a little bit of risk it's hard to give kind of a one- siiz fits-all answer to that I think generally if you have the possibility of having the ability to launch and then give yourself enough time where you could iterate and improve things if they didn't go perfectly right when you launch that would be the best case

scenario and then you raise after that on the back of those metrics but if that's not possible then you may actually be better off raising on the vision again and waiting to do the launch until you have more capital and more wiggle room to make mistakes if you have to uh you mentioned the team slide to put that on the beginning of the of the pitch deck yeah would you put just the founding team or the core team that is maybe not the founding team or like relevant people maybe if they have if I have like a very relevant adviser um yeah how would you approach this especially as a solo founder I think as a solo founder I would definitely put if you have like

any employees or advisers who are impressive and whose background really compliments yours um then I would I would include them I think what you want to avoid is the opposite end of the spectrum where you have a slide with like literally 20 people's faces and it literally says their name you'd be shocked how often I see this slide and I'm like this doesn't tell me anything like oftentimes there's not even a last name I'm like cool this is like could it could have been anything you could have put blobs and it would have been the same thing so don't do that um but I think and the other important thing to do is like the point of that slide is to show that you are impressive saying 20 years of experience in banking is not impressive you are much better off

saying a logo like literally Stanford logo or insert company that you've work at that is very impressive that's going to get you way further than saying like 10 years of marketing experience like nobody cares it's like where were you doing marketing were you at a really shitty company or at a great company so you know I I think the point of that slide is to impress people and everything that you put on it should be geared towards specifically that hey um just a quick question so you're mentioning uh you know talking about other offers you may have from you know competing funds or whatnot what's best practice should you name the other funds that you have offers from or should you just say hey it's one of the top funds

in the space or something along those lines to be honest that's a matter of personal preference um I think you know if you don't say you're kind of leaving every fund has an arch nemesis so if you don't say you leave open the possibility that they will think that it's their arch nemesis which may you know scops them into wanting to give you a term sheet I mean I'm telling you like investor psychology is really entertaining um so I I definitely don't think it's bad to not say at the same time you know you you don't like I wouldn't say don't be dishonest by saying oh it's a top fund and actually

it's like you know your cousin's like LLC like so you want to keep it within like the realm of of Truth and reason um but you know it it sort of depends if if you want to share that or not there's not one correct answer thanks uh what would you say is the optimal amount of investors to have on a cap table oh interesting question um so I always think it's best to have one lead um named a6z crypto um but um in other scenarios where that may not be possible then I think you want to have is still one strong lead rather than a party round the reality is

in a party round what can sometimes have cuz sometimes Founders will say hey we think that having everyone on our cap table will mean that everybody will want us to win which sounds good in theory but what it actually means is that nobody has real skin in the game so when hits the fan and you like need a bridge around or like you're having some drama or whatever um nobody's really going to want to pick up the phone and so I think it's always much better to commit to having one partner that is the main one and then supplementing that with you know maybe one or two small funds that you think can be particularly value add or angels I think having Angel operators can be always great they they

often have a lot of operating experience that can be relevant help you augment your network um they are generally you know friendly and kind of have a different set of incentives than what a lead investor would have um so yeah I would say one lead investor maybe one to three small funds um and then some angels would be if I were going out to raise sort of my ideal round construction um it's also going to depend you know obviously you might have a round that's like Mega over subscrib so maybe you just have one lead and five Angels that's also fine going off on what saurin asked before so assuming that you do see traction but you don't you're not in a position that you're

you're out of Runway you you can you know push forward a bit more but you do feel this traction what's the best way to like gauge interest of starting a fundraising process without officially kind of saying you're fundraising it's always good to have I think a few investors that you're friendly with like kind of in the wings um the the tradeoff that you need to make is sort of you know investors will well- meaningly waste your time endlessly in the sense that like we have nothing better to do than to meet with all you fine smart folks um but you have something else to do which is building your company and so I think you're always going to need to kind of balance those two things so until you're ready to actually go out and fundraise I would not encourage you

to be taking a lot of investor coffees because that's going to fill up your entire calendar um however I do think if you have like two or three that you're like very interested in that um you have a good relationship with and that you want to kind of keep posted ahead of a fundraise then keeping them up to speed can be good um and that sort of gives them like investors know how this game goes everyone say oh I'm not raising now yes you are everyone's always raising um so what you want to do is like it it's having those a couple again very few but targeted meetings like that can really help you take some of the pressure off of the pitch because if you're like oh let's have coffee and

then you tell them about all the amazing things that are happening in your company you may and be like Oh yeah this other investor mentioned preempting like maybe you know we'll think about it but like we're just heads down now like investors know what that means and so if they're interested that may prompt them to to make the ask um it won't guaranteed work which is why I suggest doing that only in very specific targeted cases um you could also take the alternative strategy which I've also seen work which is when investors email you and say oh it'd be nice to catch up you're like no I'm too busy and and that makes all the investors want to talk to you even more because they're like wait a minute why won't it's it's like dating you know um so didn't text me back um so

so yeah I think either of those can be valid strategies but I think if you have a few that you already have a good relationship that you'd be excited to have lead your next round then keeping them up to speed and sort of you know lowkey casually um inviting them to make an offer if they're interested can be a good strategy um as in en would you have any advice about what would be the ideal time to have a price round as opposed to stack saves the main risk with safes that I've seen is that um Founders sometimes like kind of lose track of them and then all of a sudden when they do a price round they're like well what do you mean I only own 15% of my company like where did the rest of it go um and

it's actually I mean it sounds silly but I see it happen a fair amount and it's understandable because the math on safe is like ambiguous and kind of complicated um so I don't think that it's you know I probably wouldn't go past like buy a series a at the latest like you should do a priced round obviously it's more expensive and it's a little bit more timec consuming but I don't think it's um advantageous for you as a Founder to to drag that out too much I think when you're in the seed realm like I've seen I've seen a lot of companies do like a safe round or two and then do a price seed round or just do safes until the series a I think both

of those constructs are fine it's really going to come down to the investor preference um and your preference but I think generally speaking um either of those situations are fine as long as like by the time of the series a you're like okay we need to make a a big boy cap table and like you know yeah so my question is along the same lines I think which is you said in in the ne NE iations part that it's not shouldn't be the Founder's job to set the price right when you when you do a pitch if you don't say it right they'll ask how much are you raising and then usually I'd say they they'll Al also ask at what valuation so is is the idea to

say something along the lines of we're open to negotiation yeah I mean I would say you know we're happy to have our lead proposed terms is is what I would say um and again people are kind of going to figure it out so like at the seed round you will generally be selling 15 to 20% of the company all in at the series a you're probably selling 20% of the company plus or minus 5% on either side of that but I would say those are kind of ballpark ranges and so investors can hopefully do basic math so they can figure out based on the amount that you're raising like sort of what what the math backs into um but yeah I think leaving it sort of as yeah that's a conversation that we're happy to have

with our with our lead investor gives them the flexibility to propose something and gives you again the greatest odds of getting your number one term sheet or first term sheet which can hopefully help you precipitate multiple because it's really like the term sheet clustering is like extraordinary it's like if you get to one you're like way more likely to get to four than you are if you can't get to one so um again you're you're really just kind of trying to remove all the possible barriers to you getting that that first term sheet what's the best approach for trying to get actual feedback from a pitch from an investor ask me um um well look I think asking for feedback

is a really good way which you know people don't always do um I think it's always helpful if someone like an angel is probably more likely to give you real feedback if you explicitly ask for it because they're a little bit less constrained and they're probably only going to be doing like an early round so I think sometimes the incentives for bigger investors are not always to give you the right truth because you know it's like well we don't think it's quite there now honestly the more often than not the reason people pass is just because they don't get excited enough about what you're doing and like investors aren't

going to want to say like cuz it seems mediocre like that's that is more often than not the reason why it's a no um but the great news is that can totally change like you can pass on the first round and then you get really excited about by the second round so I think that's why it's also important to like not take it personally um but I think um you know a few things like if you're talking to a bigger fund and you have a relationship with someone more Junior um even you know say you meet a GP and a more Junior person if you're friendly with a more Junior person you can say hey would you mind getting on a quick call and just giving me your your thoughts um so that can be a good way to kind of get the real thing behind the

thing um yeah like I said angels can give you real feedback um yeah things like that if you could tell us your um maybe just like a favorite story of someone who just pitched you so well just like just did a great job good I was worried you were going to ask for a horrible pitch and I was like oh um it's like I have a lot of those but um uh yeah so um I would say one of my all-time favorite most memorable pitches was um from Anton from Talos um when they were raising their first round ever this was many years ago I wasn't even at andreon yet although I ended up investing in the company uh at that point in time and then I led the series a once I was at andreon and

they've since gone on to raise um a series B from General Atlantic at well over a billion dollar valuation when I met Anton it was literally him and his co-founder and a pitch deck they hadn't built anything um and I was living in San Francisco at the time and he basically um was a friend of a friend uh and she was like hey can I introduce you to my friend Anton I know him from MIT he's a really smart guy he's like doing some crypto thing um would you meet with him and I was like yeah sure sounds good so the day of rolls around and I really rarely have headaches but I had an absolutely splitting headache I was feeling horrible and I almost canceled this meeting because I was just like I

feel like a p pile of trash I don't want to meet anyone right now but he' come all the way from New York and I was like H I hate canceling at the last minute fine I'll take the meeting and in the meeting it was just so obvious that this guy was a killer and that he had the exact perfect skill set that he and his co-founder number one they had worked together building Financial infrastructure at this company called Broadway Technologies um which had done very well then they also worked at a firm called aqr which is like very successful hedge fund um and now he was like oh I'm going to take the exact model for what we built in the traditional Financial infrastructure world and I'm going to make it into uh for crypto um the the founder market fit was

obviously perfect he was just incredibly charismatic um big Israeli Charisma energy um and uh super smart had gone to MIT like obviously technical but also could sell um and you know I immediately I took the entire rest of the round which made the rest of his week very awkward because he was like you know there for all these meetings and he was like I have no allocation left Ariana took all of it sorry um but um ended up being a great investment so so was right about that one but I think it was just so obvious that he was the right founder to build this and that he was going to plow through any wall um in order to make it happen that I really wish my job was always that easy to really like oh

like this is an obvious yes and then also for it to work out so tokens versus Equity what do you prefer the real answer is it totally depends what you're building so I definitely don't think people should just be randomly bolting on tokens to things in order to like have Financial upside or anything like that but I do think if you have a network where a token makes sense then we would always rather see that with a token as opposed to not with a token I think the the to me you know having blockchainbased stuff that clearly is a network that doesn't have a token is a bit doesn't make sense like why are you doing that to yourself um obviously there are

regulatory challenges and all of that but if you can figure out a good model for that then I think in those cases you're always better off having a token and we think it's very important to invest in the thing so if the token is the integral part of the network then that's the asset that we want to be investing in that said not everything needs to have a token and we also do a lot of equity Investments toos the company I just mentioned was an equity investment they'll probably never have a token they're selling to like Banks and hedge funds and things like that and and so that doesn't make sense for them at this point in time um so it depends on what the investment is um but in the cases where a token makes sense is authentic it's well structured into the the form of the network or whatever it

is that you're building then we would be happy to invest in that I think the biggest thing for us is making sure that we are aligned with the founder so we would never want to make an investment in just a token if the founders have a bunch of equity because in that case like what if they need to Pivot and launch a different network well then all of a sudden we don't have any ownership in that one um so having you know both equity and tokens makes sense for us because it makes sure that we are aligned with um the founders and themselves all right [Music]