The days I think of the round is large and thus it will get lots of coverage, I don't think is necessarily true anymore. Or at least just because you raised 80 or $100 million, it's not de facto mean that I or Alex or somebody else is going to write an in-depth story on it.
What makes a round interesting to you guys? Is it the players, the founder story?
To me it's kind of the same way that founders should be pitching a VC, which is what is the problem I'm solving. Unfortunately, there are lots of startups that are solving real problems that are insanely boring problems, and I'm like, that can be a great business. It makes a shitty story.
I guess I've heard from some reporters that they have kind of caps or minimums on what they'll cover. So like I won't cover a round below 50 million.
I would say at Forbes we don't have a hard rule there, but there is a sliding scale. And I think part of why that is is...
Who some of your best sources are and where you get those leaks you call me with.
The best sources are always somebody who feels wronged.
Do you worry about bias though? I mean if you're talking to people that are disgruntled or angry they lost out on a deal or...
No, sure. You obviously have to check it. I mean obviously you have to check it. There's always this question of why does somebody leak? And I think there's two reasons. One...
Hi. Nice to see everyone. Thank you JJ and Haymaker for having us here today. I have been running comms at Founders Fund for close to 11 years now. And I have to say for that whole time, these two have been two of the most well-respected and sometimes feared reporters in the game. So it's fun to be up here with them and on this side of the questions. I'm hoping we can cover obviously VC and tech reporting, but also ask them about some kind of broader trends in media because I'm sure they'll have interesting perspectives. So to start out with, I guess, what do you hope to accomplish with your VC coverage or why is it interesting to cover VC?
Instill fear. Well, successful. I guess why is it interesting to cover the money with so much money floating around? What's interesting about VC today?
Oh, sure. I mean, VC, it's the money of innovation, right? I mean, no matter what a startup does, whether it's in healthcare, whether it's in space, or whether it's in tech, they all, with a few small bootstrapped exceptions, require venture capital or at least take venture capital funding. And I think particularly as a reporter, you get to see these companies kind of grow over time and we kind of track it often kind of from a funding stage perspective, right? Because those are these milestones. But I mean, it really, you know, when you've been doing it as long as Alex and I have been doing it, you see these companies that are these household names that are these things that are integral to so many of our lives or our businesses, but we've kind of gotten to watch them from the beginning and seen, you know, what was that investment thesis when the VC, you know, put $10 million in 10 years ago. Did it work? Did it not work? How did it change? And I think that's to me that's kind of the most interesting piece of it.
I would say, you know, growing up at Forbes and I've been there for 12 years, which is crazy that we're all still here. You know, we were taught to follow the money and that the money often leads to power, influence and outcomes. And I think, you know, obviously one thing that I grapple with, I think maybe Dan would grapple with too, is we don't want to exaggerate the role of venture capital in the tech ecosystem. I think, you know, often reporters and VCs are similar in that they are most inspired talking to the founders themselves and founders are actually going to make or break these companies often not so much the VCs. But I do think, you know, that venture capital is rocket fuel for good and bad and so if you follow the rocket fuel it's easier to follow the space shuttle. If you only follow the space shuttle and you don't know any of the science you're just like, oh did that explode or work? I don't really understand.
Makes sense. And I imagine, especially you Alex because you tend to do more long-form reporting, get a lot of pitches on individual investors and profiles and that sort of thing. What makes an individual VC interesting to you today to cover if anything?
Well to start my career it was a really ugly cowboy shirt. So I think my first Forbes cover story was about Chris Sacca in sort of the Uber heyday and that name may or may not mean anything to people. He was on Shark Tank and it was kind of a wild wild person to get to know with very cheap rayon cowboy shirts. I think they're a lot fancier now that he's a billionaire. But for me, the personalities have to be kind of interesting, influential people and then sort of doing something a little bit different. That I think is something that I've really leaned into more in my coverage in recent years is I write more about emerging managers, underrepresented managers or you'll love this, contrarian managers because you know consensus funds firm raised $2 billion. It's its eighth fund, business as usual, same strategy. No one in this room wants to read that unless it's their own company and even then maybe they don't want to read it.
Fair enough. So we were chatting backstage and saying all anyone really wants to hear from a panel like this is probably how you can get your funding news covered. So with the amount of funding news coming out today, what makes a round interesting to you guys? Is it the players, the founder story, something else?
Yeah, I mean for starters there are, as you said, there's a ton, right? There weren't that many today, but there are days legitimately where there's 25 or 30 rounds, you know, globally, you know, say of over $5 million or more and sometimes multiple ones that are hundred million or more. So, kind of the days I think of the round is large and thus it will get lots of coverage I don't think is necessarily true anymore. At least just because you raised $80 or $100 million, it's not de facto mean that I or Alex or somebody else is going to write an in-depth story on it. To me, it's kind of the same way that a founder should be pitching a VC which is what is the problem I'm solving and is it an interesting problem. And unfortunately there are lots of startups that are solving real problems that are insanely boring problems and I'm like that can be a great business, it makes a shitty story. So, if you have an interesting problem you're trying to solve, call it for real people or something that has... it's kind of this thing of like Axios, we have this line that's often the second line of our story which says why it matters and where that came from was we had a newsroom of about 12 people when we launched and we couldn't cover everything. So, we had to be able to answer that question for ourselves and it was really a how would you explain this to your friend at the bar who doesn't give a about this? How would you explain it and make it relevant to them? If we can answer it, and I still think that's true for a lot of funding announcements, why does it matter?
Yeah, I think along those lines, just keeping in mind this audience, I think that one thing I always say to comms pros, whether it's for the company or a firm or consulting and it's not even clear who they're working with, would you plausibly read this story if it was about your competitor? And I think, you know, if not, if it's really like we just need this announcement out, the outcome is that we need this news in the world, I think it's fine to have a corporate blog post or even I actually am not against press releases because as a reporter, I will go back and look at them as sort of a public record. You know, facts at this time, these were named customers then, this was the growth. That can be really helpful when you're writing about the company a year or two later. So, I'm actually not against that. I think, you know, I always tell people, why do you really want to be talking to Forbes? What is really the goal there? If it's just like be in Forbes or be in the conversation, I don't think that's as specific. You know, we're a business publication. We care about hard numbers. We care about bigger, you know, business impact or trends. And so, I think like if you can't present that and if this was about your competitor, you wouldn't read it. It's kind of a waste of everyone's time to be pushing for it.
Can I add on the press release side because I have a compendium in my newsletter every day of all deals. So, press releases are great unless they don't tell me what the company does until like the eighth paragraph. Drives me out of my damn mind trying to sometimes figure out what some of these startups do. Leave aside that they're all AI powered now. But yeah, that it's the small little...
I want the numbers. I want the numbers. I want... don't mix equity and debt and just say you raised $100 million and then a year later I have to talk to your VCs to figure out how much of that was equity. Like please just put the real facts in there.
Thank you for supporting me and saying this could be a blog post most of the time because I still have a lot of founders who raise... By the way, again with the blog post, lead with the news, not 8 years ago, I met Jimmy at a coffee shop and he told me, 'Oh my lord.'
I think that's important if you're a VC, though, because you have to prove that you knew this person before the other VCs.
Yeah, there you go. Fair enough. I guess I've heard from some reporters, it sounds like this isn't the case with you guys, but they have kind of caps or minimums on what they'll cover. So, like, I won't cover a round below 50 million or unless the valuation is a billion or something like that. Sounds like probably not the case for you guys if there's like an interesting story behind.
It's not the case for me. I generally won't put a blurb up if it's less than a million dollars just because it just becomes too much. But no, like there's a section of my newsletter called the BFD and sometimes that is a massive round, right? Company raises a couple billion dollars or there's a huge merger. There have been four or five million funding rounds in that spot where much bigger rounds were announced that day because it's legitimately to me at least interesting.
I would say at Forbes we don't have a hard rule there, but there is a sliding scale. And I think part of why that is is why do we cover funding rounds in the first place? Why did that become so popular? I believe it's because it's a bit of a proxy for startup growth. You know, we don't get year-to-year revenue or cohort analysis or some of the numbers that an investor might have or a startup might have internally. And so how much funding you've raised and what your valuation is became a proxy for sort of how far along are you as a company. And I think if you're a seed stage company, the answer is often not very far. And so do you have big customers we can talk to? Do you have meaningful revenue we can talk about? Probably not. And so I think in general we end up covering a lot fewer let's say seed rounds or earlier at a place like Forbes because if I'm only let's say writing one funding story a month maybe and maybe one new fund a month, if you're thinking just head-to-head like all the different companies we could be talking about often there will be a company further along in the journey that might be where I want to spend my time. So while there isn't like a hard and fast rule, like probabilistically I'm not going to likely cover let's say a seed stage round.
Yeah, makes sense. My last funding related question. Everything seems to be about AI right now. Every round is an AI round. Does that make you want to follow the money and track that more? Are you totally sick of AI and looking for something new to cover?
I'm not sick of it. I'm sick of people saying they have... I mean AI at this point has become like what the internet was in 2001, right? Like yes, everybody's using it to some extent or applying it to their technology, but it's not their technology. There's exceptions, right? OpenAI is an AI company. Anthropic is legitimately like that. That's their thing. But like if you're... here's the way you can test it. If the company was founded seven years ago and didn't mention AI until the last 12 months, good time to go back to the press releases. It's not an AI company. So I'm like I'm not sick of covering it. It is like to me right now there's two huge sea changes in kind of startup business. AI is one. I think GLP-1s are the other which is in a very different spot. But like those are the two big sea changes in tech and they are legitimately I think influencing almost every company and if they're not, I actually that would be an interesting thing to write about would be the company that's just like no we have no interest.
Yeah. The GLP-1 thing, have you seen a lot of VC movement there? I haven't seen a lot of...
I'm not seeing so much VCs move there. I think what I'm seeing is a recognition more on the private equity side that it's about to change not just healthcare but also food consumption and other things in some really really fundamental ways. If you look, and this will be true in VCs when it comes to biotech and you're seeing some of this right, when you think of all the biotech money and that's like 25% of all venture even though it doesn't get talked about much, so much of it is for certain heart diseases, so much of it is for diabetes and other things that are kind of obesity related and if obesity gets like literally slashed in half or even a third it changes the economics of absolutely everything and also of certain foods and food production, alcohol, etc.
I think we do have a weekly AI newsletter written by my colleague Rashi Shrivastava who's amazing. You should all hit her up with your AI news. We also have like a great weekly newsletter on science and we write about AI there too. I think we see AI kind of increasingly in all of our beats. And so it definitely is hard if you're a boring SaaS company and you just sell B2B software but now you have AI in it and you're like well now we're an AI company and that's exciting. Probably not. But if you are, you know, a crazy frontier model business that thinks you can take on Anthropic and OpenAI and has raised a ton of money, like of course we're not going to like say no, we're done covering LLMs. But, you know, I do think also I see a friend from The Information in the audience. There are teams that are so aggressive in covering like hot beats like AI, you know, where I have to think to myself is Stephanie at The Information or is Sharon at Bloomberg or all these other people are they going to quick hit this AI news so fast that it doesn't even really make sense for me. I don't know if you have this Dan with the newsletter but for me it's sort of like I think of myself as like an artillery piece and I have to like line up my shot and sometimes that's going to take too long so I don't even bother with a certain story.
I don't give things nearly that much thought. That's really impressive. It's really... I mean look the other piece of the on the LLM side particularly, you know, these massive rounds, it's going to be... look we like to... I generally like most of the VCs and the founders I cover but it is a lot more fun to watch these things collapse and there are going... so like when other industries have had massive bonfires in the past it hasn't quite been what this is going to be because you're talking here about five, six, $800 million checks. It's going to make some of the unicorn stuff look like child's play because these are not all going to succeed. And when they fail, they might fail spectacularly.
Yeah. Interesting. So switching gears, since we have Alex up here, I have to ask about the Midas list, which I'm sure most of you are familiar with. It is one of the most talked about and hated on pieces of VC journalism out there, I would say. What is it about the Midas list that gets people so worked up?
Well, I think VCs are very competitive and vain people. No, but I mean, our 30 Under 30 list, VC, the Midas list, they always get a lot of attention. I do think we're proud of the fact that we try to make them more credible every single year. We've had a bunch of people try to do a version of the Midas list and it's so much harder than it seems to do right. I started doing it in 2014 and I feel like we've made even a lot of progress in that 10 years. But you know a lot of people in this industry, you know you talk to some folks like Nicole Perlroth, Erica Fry, like they actually worked on Midas when I was still in high school. So this is a brand that's been around for a long time. We work really hard to make it as good as possible. And then what I like to joke to people and it's kind of true is there's usually only one VC happy with a Midas list if that.
It's number one. Fair enough.
Dan, you sort of started or were going to start a competitor maybe a few years ago. And it fell through. Why has it been so hard for anyone to start a competitor? I feel like it's something people talk about.
I think I was doing it at Fortune then I left and then had to do a startup and it did not seem like the best use of my time. We'll say Midas has gotten a lot better from the analytics piece. I mean when it started for the first 10 years it was garbage. It really was, it was really really bad. It didn't... and then there was this brief period of time where it included private marks of companies that were worth I think it was like 100 million or more but nothing under that. I was like, 'Wait a minute, but if you invest at 90 million and the company's now worth 100 million, that seems a lot worse than if you invested at five and it's worth 15, but those didn't get counted at all. Those people didn't exist.' Anyway, I think it's gotten a lot better. But look, it is hard to do. You also have certain VCs who don't want to release the information. Then there really is such a bifurcation in venture right now, you know, and you guys do try to do this but like the person who's putting the $2 million seed check in compared to the person who's putting the $200 million series E round, like they're not the same business anymore.
I think that's a really good point. We recognized this in launching the Midas Seed list a couple years ago because our number one complaint about the Midas list besides my partner or me was, you know, 10 spots below and you know people who have complained to us. I think the biggest complaint we got as an industry that we really took to heart was it's really hard for a seed investor who strikes gold with a small check, returns the fund many times over. That's like a great venture deal. But then how do you compare that with let's say someone we've profiled at Founders Fund like Brian Singerman who was converting big later stage checks into billions of dollars like that is really hard and I think as the venture industry does bifurcate to kind of more like private equity with the multi-billion dollar funds and then these sort of focused smaller funds that is a structural challenge I think in how we think about venture like overall like holistically. And so for Forbes, we created the seed list and then we have this increasingly complicated model that tries to kind of balance, you know, big bold returns against sort of consistent high cash returns. But of course, it's going to be imperfect.
