Advice For Startup Founders and Emerging VC Managers from Sam Lessin of Slow Ventures

If you can pattern match across verticals, if you can pattern match across the ecosystem, if you're very disciplined in terms of what it is that you fund and why and what you're actually looking for in terms of people and theme, you'd rather be a generalist fund. You're going to make more money as a generalist fund than as a deep specialist.

Doing well. Thanks for having me. Happy to be here.

No. I think the idea of San Francisco Tech Week is ridiculous. Every week is Tech Week in San Francisco. It's like I would be more excited about San Francisco not Tech Week.

That makes sense because if you live in San Francisco, you don't need to go to Tech Week. You are Tech Week all the time. It's like, I will say my only commentary is I've had several founders come in for meetings and they're staying in the shittiest hotels because every hotel is like $10,000 a night because of Tech Week. So, it's great for the hotel industry. Go hotel industry. Well, frankly, you want to see that survive. You want to see restaurants...

You know, not sure. Yeah. What are we about? We've been doing this like 10 years-ish. Um, you know, everyone has a good founding story where you can kind of pick what date is the real founding, but the upshot is, you know, we've been doing it pretty professionally since 2014. Uh, we've invested five funds in our core seed product plus a few opportunity funds, plus we have a creator fund that we do and a bunch of exploratory stuff. Um, and look, we're the hyper-generalist early-stage seed investors. Um, we try to be first, we try to be right. Uh, we try to back amazing people doing important things in important spaces and we mostly waste money but every once in a while we don't.

We're very disciplined about the size and strategy of checks we write. You know, we are seed investors. We write one to three million dollar checks for 10% basically of companies. Um, we don't want to be on the board. We don't want to take 20%. We don't want to take 5%. We have like a pretty tight buy box from that perspective. And we think that there's really good discipline in terms of what that ends up meaning for what you do and don't invest in because, kind of like at the end of the day, like whatever metrics you pick drives who you are, right? Metrics are destiny. And so that's kind of a core metric we really think about. We think is the right buy box for us. We have an angel program, we go earlier. We have an opportunity fund we can be a little more creative with and do things. We have an 'oops, we missed it' bucket, right? Um, for important stuff that we just weren't in. Um, but yeah, that's kind of what we do, you know. Uh, and we're very, very, very agnostic on, you know, we're not a deep tech fund. We're not a whatever fund. You know, we've done a ton in crypto. We're not a crypto fund. We go where there's good opportunities to make lots of money and ideally deploy capital that makes a difference.

Yeah. I mean, like, look, our view is that, you know, we've done a lot in SaaS. We've done stuff in services. We've done stuff in — we've always done a lot in like crypto and security and all this. Our view is that there's no industry or market that's always good, right? What happens is these things go in cycles. There are seasons for investing in almost anything and you just got to be really sensitive to what the season is, what the opportunities are and what's happening. And funds that lock themselves into being like, we're just one thing, you can become like the deep expert in that thing and there's some value to that sometimes. But it's just too restrained. It's too constrained. You end up putting yourself in this position where there are times when you shouldn't be investing in that. But if you told everyone you're going to invest in that, then you're going to invest in it and you're either going to lose money or end up with like ridiculous companies, right? And so it's just, you know, our view is that if you can pattern match across verticals, if you can pattern match across the ecosystem, if you're very disciplined in terms of what it is that you fund and why and what you're actually looking for in terms of people and theme, you'd rather be a generalist fund. You're going to make more money as a generalist fund than as a deep specialist.

Well, so I think a few things early on, right? Like it's different than late. In the end of the day, after you're three funds in, the pitch to LPs is very simple, which is we either made money or we haven't. And we either still have a way to make money or we don't, right? It's actually the pitch has become pretty easy, right? And like there are people who get it, or you're in their buy box in terms of what they're looking to deploy into. There's a strong argument to deploy into seed funds. There's a strong argument not to, right? Like that's more about LP taste than it is about you. You need to know what business you're in. Um, so that's like the late. Early on, look, I mean, in the end of the day, um, the pitch is we think we're pretty smart and we have good access. Um, and we, and I think, and you kind of go from there. And the question is how do you demonstrate that you're pretty smart and have pretty good access, right? And I think there's a few ways to do that. You know, I tell young people always, even if you really want to be a venture capitalist or want to be doing early stage funding, you know, obviously the best case scenario is, you know, you're an executive at some company and you've written some seed checks and they've worked and you've demonstrated you, blah blah, and you have a cool fancy pedigree and blah blah. Fine. But the more important thing is actually to have intellectual receipts on being first and being right. And that's why I'm like a huge fan of people writing. Like, people come to me all the time in their early 20s like, I want to be a VC. Like they're like, here's my resume. Like I don't care what your resume is. Show me what you wrote. What have you written? Like what insight have you — send me interesting perspectives. Go find things that I didn't find. And even if you can't invest in them, tell me that you knew about it first and were right about it first, right? And the good news for us is I think going into the early funds, we had a bunch of angel checks we had personally written that were super successful. We had been executives at big companies, which in that era, you know, that helped. And we had a ton of writing where we were just like, look, you can just look, we've been right a few times, right? Um, and I think that really helps.

Look, all stories are — here's the short version, and don't believe all founding stories because they're all mostly made up. But basically the story is, you know, there's three of us that are GPs: me, Kevin Colleran, and Will Quest. Will came out a little bit later, you know, as we were going, and he's kind of our professional venture capitalist, you know, ex-Industry Ventures guy. Kind of came on initially focused on our opportunities fund and now does a lot across the board, including obviously our seed fund. You know, Kevin and I are both Facebook execs. Kevin was like the first ad sales person at Facebook. I was VP of product for many years when there weren't a thousand of those. There were three of us. And I reported to Mark for years through the IPO, running things like the profiles teams and the privacy teams and things like that. So I left in 2014, but, you know, I was there through a pretty interesting formative phase. I had started a company before that. I had invested in a bunch of stuff personally.

Slow originally was a collection of effectively angels who just pulled some money. Um, mostly all ex-Facebook people or Facebook people: Dustin Moskovitz, Sean Parker, people like that, you know, people who had a little liquidity. We were all messing around angel investing, and so there was a Slow vehicle, uh, originally managed by a guy named Dave Morin, who's a very close friend. And we basically just pulled up some angel capital and said, look, we're all doing deals on our own, we might as well also do some deals in common, right? And then, you know, that wasn't super professional, right? It was kind of just like a super angel pocket of money. Um, and then we basically professionalized it, you know, after I had left Facebook. Kevin had been kind of doing an interim job post his Facebook tenure at General Catalyst. We were like, you know, we both like investing. Let's start a real fund and kind of go after it. Um, so that was kind of the story, but it wasn't one of these like straight lines. It was kind of like, yeah, we were all kind of already doing angel investing and we liked it and we thought there was more to do there and scale. And, you know, our first fund honestly I think was too angel-plus weighted. It wasn't strategic enough. We weren't disciplined enough in certain places. It's fine, but it's not like a fabulous fund. It's kind of like a we're in a bunch of cool logos with not enough ownership, right? Um, and then I think, you know, our third fund, right? Because we called the original ones rocket funds, which is really just an angel pocket, right? The first one was technically Slow Two. Slow Three worked really well. It is working really well. We made a lot of money on it, right? And then we've kind of done four or five and kind of going from there.

I mean, basically the first real fund was 65, which at that era was a lot. Like the thing that was interesting in that era, because again it was a long time ago now, is the idea of professional seed/angel investing was very much not a thing, right? Like people were like, you can't make money on that. Investing is like the Series A and beyond and everything before that is just friends and family type money. That was kind of the mentality. But the idea of doing it professionally was at least not consensus. It went obviously very consensus after that. Um, but we had the benefit of it wasn't like there were a thousand people doing this. There were some people who liked the idea and some people who didn't like the idea. 65, then I think 145, then like 195 there. We try to keep the seed funds around 200. Um, I don't know how to make money well on more than $200 million seed funds. I also think it's extremely hard in 2025 to be less than 100 million. So my basic view is like if you want to do this, you kind of want to be in the $100 to $200 million range in a seed fund. Um, so we kind of just rinse and repeat that model. Uh, maybe we invest a little bit for inflation every once in a while, but one thing about us that's very different is like we really don't intellectually have a lot of respect for multi-stage venture capital. It's not that we don't get it. It's like a great business model. AUM is a great business model, right? It's actually a better business model than what we do, right?

It is. It is. It's like there's no question that it is better to make a ton of money on fees and justify it with DPI than it is to like actually try to make money on DPI, right? Um, for sure. Like it is just a more scalable, better industrial business model. It's just boring from our perspective. Um, and like we know what we like, and what we like is, you know, being right when other people don't see it yet, being first. You know, there's like — it's a vocation as much as it is like a profession.

It's not that hard to calculate. It's 2% of their AUM, right? Which is just like — now look, the irony is, right, you get into the details of venture, which no one actually understands, or no one outside of the industry understands, is like you're not making that, right? That's like the payout that you're supposed to pay back with all the DPI, right? And so you're just kind of front-loading effectively the cash you get paid, but it is effectively guaranteed, right? There's always some irony to it, right? You think about venture capitalists are supposed to be risk takers, but actually if you're a venture capital partner, it is probably the safest job in the world, right? Like you can't be fired for like 10 years. Your compensation is completely guaranteed, right? It's like it's as close to academic tenure as exists outside of the academy, right? Um,

The other thing to keep in mind with the big firms and AUM is like it's really simple. Like if you look at how, again, all the big firms are basically they're businesses. And again, I have no disrespect for them. I just think you got to call it what it is, right? And a lot of them want to go public or are trying to get public. And there's a lot of lessons from PE more broadly and buyout from this. Here's the funny thing. The financial markets do not value returns. They don't care. They're all valued based on effectively your ability to raise capital and the fee structure, right? And so it's just this ironic thing which is no one cares what's in them. Only people only care as like a fee stream. So they're obviously optimizing for fee stream because if they're ever going to go public, that's what they're valued based on.

That's what the public market wants, right? And so we have no intentions — I can announce here and now, we have no intentions of ever going public. We're not interested in any of that. But it just means again the incentives, and metrics are destiny. And so that's why I'm like so obsessed with more than like, oh, we are this type of fund. It's like, look, what do we do, right? Like we put this amount of capital in for this amount of ownership. We try to defend it and not lose all that by the time these companies have liquidity moments. Um, and we don't raise too much money. And we pride ourselves on being first and right and early.

No, it's not the cap. It's because it's hard to make that much money. It's hard — like if you own 10% of something, right, it goes public for $20 billion. Right? Now, the idea that you would make it to a $20 billion exit, right, hypothetically, without any dilution, is fantastical, right? Like, but let's pretend that you could, right? That means your investment — if you want to 10x on your fund, a $200 million fund, you want to return $2 billion in capital, which would be awesome. Like that's like a great [censored] fund. But you need to own 10% of a $20 billion company, or more realistically you need to own like — you think about it that way, like I actually think it's more like a billion-dollar outcome, right, because you're going to get diluted to five realistically, so like it's really a 5x fund at that point, very rough math. The idea that you're going to generate on $200 million in bets like, you know, 10, 20 billion in public marks in any reasonable time frame — it's not impossible at all, right, but it's hard, right? And the idea that you can do that repeatedly and well, right, is hard. So the idea you see these seed funds that are $400 million funds, you're like, 'Wow.' To actually make a lot of money, you have to be in like unbelievable stuff, right? And like I just — it's not that you can't hit it every once in a while, but I don't think you can manufacture it, right? And I think that at that point it's just gambling, right? Um, and I don't like that, right? I think less than 100, the problem is like you don't have enough shots on goal, right? Like, you know, if you're a solo GP running a tiny firm and you can get away with it, actually if you get it right you could do really, really well, but it's really hard and you don't have that many opportunities and you don't have enough money to defend your positions. There's like all these problems with it. So when you kind of bake out all those variables, it's like I'm pretty confident we can consistently make people serious money if we're like a $200 million fund, but I wouldn't say the same thing if we were a $400 million fund.

A lot. I mean, we probably reserve as much money for follow-ons as we put in up front. And this is one of the things people — again, seed investing is really hard, right? Because if you think about it, you can be in something that's a great business but super capital consumptive and you're [censored], right? And so like think about — like OpenAI is a great example of this. It's obviously like the company that everyone's like, 'Ah, I wish I had seeded OpenAI.' And again, you clearly would make money seeding OpenAI, right? But nowhere near as much money as people think, right? Because if you look at it, you know, I think there's some projections — and again, this is all kind of directional — or there's some projections I've seen reporting that's like the seed investors, because of all the capital that comes in for the compute and the hardware, not to mention paying people several hundred million a year, whatever the comp structure is, it's so capital intensive that like the seed investors are sitting somewhere like at a 25x, right? And the idea that you make a 25x on that type of investment potentially is like terrible, right? Like I've made 25x on so many things. Like that's actually like if you think about the way seed works and mortality rates, like that's just — you need a lot of that.

Um, you know, contrast that to like, you know, probably the best financial deal I've ever done was seeding Solana, right, where we made almost 2,000 times our money in like four years, right? And so like — and what's the difference? Like that was like the most capital efficient thing in the history of the world and OpenAI is like the least capital efficient thing in the history of the world. So the problem is like you have to reserve capital for normal companies and for defending positions, and then you just have to be super sensitive to the fact that like seed investing is a terrible business in businesses that are going to consume a lot of capital, right? Like you need capital efficiency to make it all work.

Yeah, absolutely. I mean, this is like the most boring thing ever, right? But like everyone says this and it's actually true, right? Which is you start out — we had I think one sort of institution or semi-institution in the first one. At this point, I don't know the numbers because my partner Kevin really handles all this, but like my bet is 80% of our capital is like a small number of really high-quality institutions. They're far better LPs. Um, they actually respond to capital calls, you know, they pick up the phone, right? They like, you know, they're actually, you know, occasionally helpful strategically. Um, occasionally, right? So like we're very professionalized from that perspective. Um, and I do think it is like — I've heard people try to make counterarguments on this, but I do think it's just one that you don't fight. It's like you'd rather have real institutional capital that's going to be with you for multiple rounds and gets it and will grow with you, etc.

Uh, more the latter, I'd say more the latter. I mean, again, I think when we talk about individuals, like a lot of people do have family offices, so like there are a lot of family offices, right, that were in the first version of what we were doing, but, um, yeah.

Yeah, well, in some ways this is a very old idea of ours. I actually wrote one of my essays to try to get into college about kind of the idea. I had bought the domain lifecapital.com and I was saying — this is when, like, the late '90s, I was like, you know, Martha Stewart's gone public, it's like, you know, in the future — I was ahead on the debt part. I was like, debt makes no sense for people, right, for individuals especially as the world gets more discontinuous in terms of outcomes and inequality. You want an equity structure, right? Which is basically like, yeah, like I'm — you know, you already pay the government 50% of what you make every year anyway, right? You'd rather raise capital and say, hey, here's the deal. I need capital to go to school and educate myself and get a kickstart in life, you know? I don't have a rich uncle, right? Like, and so I'm going to raise the money as equity. If I don't do well or don't do that well, don't worry about it. But if I'm Jeff Bezos, I'm going to pay like a few billion dollars right back into the system, not just like a return on the loan. I think that's like a much more sane way to think about personal finance in a lot of ways. And yet it doesn't exist for a whole bunch of reasons. Um, I love this idea. I've pursued over my career six different ways. The creator fund and what we're doing there was like the first way that we have institutional capital behind where people are like, that actually makes a lot of sense. And it basically comes down to this, which is there's this whole group of people who are effectively community entrepreneurs. They're super deep on a vertical. They love it. They've built a ton of trust with their community because they're the person producing the best content with the best advice, you know, but it's in a niche or a specific thing that really is their thing. If you're in that position, you have so many advantages, right, to company building. You have nearly free distribution to the right people. You have trust built already. Um, you probably actually have great ideas because you're talking to the right people all the time. You're native to the actual community. And so there's all these reasons you should be great at founding companies. And yet venture capitalists really won't fund it, really.

Like, people are okay funding sometimes what I call like companies started by these types of community leaders, which I actually think is not a good idea to fund them one-off, for reasons we can get into. But no one's like, 'Look, I trust you. You're the entrepreneur. It's seed investing for these communities.' And so we were like, look, there's a huge amount of money to be made doing this, providing capital in a place that doesn't otherwise get capital, which by the way is the whole point of seed investing. The point of seed investing is you're like, there's no easy way to get capital to build this business because no one trusts you or no one understands it yet. We'll understand you, we'll trust you, and we'll help you build it. So it's exactly synonymous. Um, but it requires an intellectual leap, right, for some people. And it also really importantly — you talked about LPs. You know, most LPs, their job is to go build like against a theme. They're like, 'We need six things that do this or four things that do this or we're in this segment of the market.' Because they're not actually picking individual managers. So the idea of being like, 'Hey, this is like a new category or a style of investing' is just much harder to pull off than saying we're yet another thing that looks like the things you already know, right? Um, so we started the fund. It's a $65 million vehicle. Um, we first did a bunch of these deals to prove to ourselves we liked it and we thought it made a lot of sense. It's going really well. Megan Lightcap is running it on the team. Um, and I'm really bullish on it. It's, you know, it's great to be — you think about pricing, it's like, you think about what a $20 million valuation...

buys you these days. What it buys you in the creative world, unsurprisingly, is dramatically better than what it buys you in AI, right? Like you can have two Stanford kids in an idea or someone who has like...

is like a really strong business and is like making a bunch of money and has a bunch of awesome ideas on where to take it and is like really much further along. So, you know, there's a bunch of nuances to it, but that's the short version.

Yeah, Jonathan Katz-Moses. I love that guy. That guy's awesome. Like he's probably... we, there's a few other deals, some of which aren't announced yet that we're really excited about, but he's actually a great guy to talk about because I think it fits this model almost perfectly, right? Which is JKM, Jonathan Katz-Moses. If you are not into woodworking, you almost certainly have not heard of Jonathan Katz-Moses, right? If you're super into woodworking, you've heard of him, right? You've seen his content, you probably follow him, right? And he's built a set of businesses around being the person who's super trusted in woodworking that are great businesses and working really well and wanted capital to scale up and go faster and wanted a partner to do that with. And like I think it's a win-win-win for everyone, right, from that perspective. So we, you know, gave him a few million bucks. You know, we don't own a piece of one of the businesses. We're like aligned with him. I think alignment with founders is key. If he tomorrow wakes up and says, 'I want to do XYZ,' we're not going to be like, 'Well, you told us you were going to do the other thing and like we're investing in other things, so like don't do it.' Like, absolutely. We want you to do what's best for you because we're aligned with wherever you're going, right? And like I think that's kind of the trust mentality and the alignment mentality is like one of the important things we've learned from seed investing is you're backing a person in like a theme, right? If you get too obsessed with the first business model or whatever, you're kind of missing the point.

Well, it's, I mean look, these things are not so black and white, right? Like the answer is yeah, he had a tools business and there's going to be a bigger tools business. Like there's other things he wants to go build. I think for creators, there are creators who just love making content and like that's all they'll ever do because that's what they want to spend their time on. And that's, I really respect that, but it's not really what we're designed to fund. We're designed to fund people who are entrepreneurs who happen to be community first, right? Which means it's much better if they've demonstrated that they're actually on the path to building businesses or, you know, actually selling things or they have a commercial intent because look, there are other great creators out there who are just in it for the content and I respect that. You can do just fine doing it and they're having a lot of fun. It's just not our thing.

Rough. Yeah, I think it depends on the vertical and the context and things like that. I'd actually say, you know, anyone who has a hundred thousand to a few million followers, it could make sense for. I mean, there are creators that are just far too big to need venture capital, right? They're like, 'I don't need this.' And that's true.

Beast is different. I actually, you know, like Beast is different. I wouldn't invest in Beast for a different reason, which is like, I don't know. We're really into verticals. Like we want you to be like, 'I am the person who's most trusted on X.' We're not that obsessed with like how many people watch a video. And the thing about that is like, I don't think he's so broad in a lot of ways for his appeal that there isn't like... I couldn't tell you he doesn't own woodworking. He doesn't own aviation, single plane aviation. Like there's no... I don't know what you sell, right? And so you know, the products he sells are CPG products. They're like chocolate or things like that. That's fine. That's what you can sell to everyone. But it's kind of not how we think about the most successful actual creative businesses even if it becomes a big brand, right?

Yeah.