00:00:00 moving the needle on founder failure one conversation at a time I'm your host Justin Gordon and welcome to startup 2.0 by spark XYZ join us each week as we give you access to some of the top investors and entrepreneurs in the country to help you think through and overcome the top challenges that startup space today's guest is Lorant grill and entrepreneur turn venture capitalist also the lead investor of luma launch and Lorant is one of the most genuine people in the los angeles venture community and we're

00:00:38 excited to have him on the show today the rock welcome to the show hey how are you good happy to have you on first of many many more interviews we have to do here which isn't be so much fun and we want to start off with first off is what areas is your company focus on yes so luma launch I can sort of give the high level background we are a early-stage pre-student seed investors specifically focusing on software businesses b2c so we're looking at about 50% of the the companies we look at are in the consumer space and about 50% in

00:01:11 the b2b enterprise space so vertical status businesses marketplaces we have a little bit of some some allocation towards media so that ranges between gaming or VRA our social we have a couple content investments but we have predominantly focused on traditional software businesses yeah and is that change at all over time is that kind of all that's always been your focus I think due to the nature of how early we are because we are a precede fun yeah you know we have to be opportunistic and vertical agnostic and so over the years

00:01:46 we've had more of a focus on certain verticals be it you know vertical SAS businesses I can name a couple in our portfolio like tap cart or Boulevard but we also have looked at some sort of outside the box companies like Gemma switch is a direct-to-consumer jewelry business and so we're looking for great founders in the end and unfortunately unfortunately at the same time we have to really be open to a lot of different types of businesses and it's really more about finding the right opportunities

00:02:20 yeah and then being open in different types of businesses as well and with your fun then just but just six why's what does the check sighs kind of are you actively investing lots of things yeah so our average check size is $250,000 we've gone as low as a hundred and as high as half a million it really depends on the stage of the business the valuation what the allocation is and so on so so actively investing we've been investing for about four years now we are absolutely actively investing we're looking at doing between six and

00:02:50 eight deals a year okay so that's what we've done so far yeah we follow on to many of our investments especially you know the ones that are taking on pretty significant next stage capital so we like to stick with our investments as long as we can yeah and then we like to have just kind of a general idea of what your investment thesis is so I don't even have one or kind of what that looks like currently yeah yeah so as I mentioned we're vertical agnostic and again what that means is we are trying to focus on

00:03:20 software businesses right and the reason for that is because they're much more easily scalable high margins allows our early check to have a longer life cycle you know I think once you start investing in certain businesses that I'll give you a few examples of verticals that we try to avoid healthcare where they're you know there's some regulatory compliance and things like that FDA whatnot yeah it's just there's a lot of unknowns that we try to avoid in those scenarios certain long sales cycles are difficult at the

00:03:49 early stage so selling directly EdTech for instance selling directly into schools it's such a short sales cycle but also a very long decision process and getting in when you only have 12 to 18 months to really prove out a product there's a lot of fear that we have around investing in those types of businesses included in that I would say you know gov tech government tech is tough and then FinTech along kind of along the same lines of health care with the regulations we look at all of these industries there's no question that we

00:04:18 will absolutely explore investments in them but we're far less likely to do a deal because of some of those fears yeah and knowing that you still look at that what are you looking for what would make you potentially even invest in something in those industries that maybe aren't your main ones the ones you're focused on the most is there anything that like really jumps out at you you know I I don't think I could give you like an exact thing I think it really comes down to if there's some huge advantage of the

00:04:40 founder that we feel like is going to be able to de-risk our fears that's one you know I I think in the in some of those cases having some other co investors who have strong you know have a very strong understanding of the space that we can lean on I think that's part of it yeah but overall you know I think look we haven't done so where 27 investments in or 26 or 27 investments in and we haven't done it yet and so you know I think that's the the proof in the pudding right there so yeah so but you

00:05:14 still so you still look just because you kind of have to maybe you look right now I'm looking at a deal I'm not gonna say which the deal is yeah we're looking at a deal right now that would fall under that category okay cuz yeah it's a fin it's a fin tech highly regulated business and we're really excited about it and there's a chance that you know we end up making that investment and it would fall outside of our purview at least in the past yeah and in that same vein then like what is your due

00:05:36 diligence process as you're looking through these different companies what's that entail exactly again I think that's a huge dependency on on the stage of the business one right so if they have revenue if they have clients customers whatever maybe yeah you know we can actually look into that so one of the big things is identifying some of their their customers and trying to speak to them and and finding out why they value this product if it's like a vertical SAS products right on the customer side

00:06:02 really trying to dig into the customer behavior and the true value of what they're providing and that can sometimes take a little bit of time but look the reality is that precede and seed you're kind of like as much as this super cliche but you are betting on the founders so it's really about digging into their backgrounds and and getting to know them as well as you can in two to three weeks and I think you win some and you lose some yeah because you can only get to know someone so well in a short amount of time but ultimately you

00:06:32 know what it comes to diligence it's really especially since a good portion of the investments we make are pre-revenue and occasionally pre-product we are trying to gather as much information as we can about the founders themselves about the space the competition obviously who's tried to do this and why they failed those types of things are what often lead to at least us being willing to take a swing on that specific product yeah and then Dean little deeper just into the founders and how you're

00:07:00 finding and evaluating them like only a couple weeks you mention like two three weeks looking at them are you multiple conversations with them from each different person at the firm like how does that work in terms of evaluating them and seeing okay if someone want to pull the trigger on exactly yeah so you know we have a small team there there's three of us on the launch side and then we have well I'll actually rewind a little bit so what makes this very unique as a fund is we are actually funded by a single investor and that

00:07:27 investor is luma luma we used to be called with pictures but luma is one of the largest independent creative studios in the world and luma is focused on visual effects and now we're looking at we're actually in development on some original pictures as well awesome but we don't what makes us very unique because we don't function like any other strategic corporate venture we're investing obviously as I've mentioned in a wide variety of verticals yeah and so our process you know we hyper focus on storytelling and branding and what that

00:07:59 means is every business whether you're a customer facing consumer facing how are you telling your story that story is ultimately going to present your value and whatever that is right and so every company has to tell a great story whether it's to investors or their customers or whatever they're doing to educate the market that's like the core of their business and so me and Matt and Danielle are have really taken a strong focus on helping our priests even seed investments position themselves effectively in the market so that they

00:08:34 can tell their story you know effective yeah right right and so our process is you know I'll meet someone or Danielle or Matt will meet someone get to know them a little bit if we think that they are you know there's some there we'll bring it to the group the three of us from there honestly it's a it's a sometimes will immediately be like this is a no-brainer let's bring this to our investment committee which includes our CEO and CEO of the business overall and then we have a final pitch and we generally make a decision fairly

00:09:02 quickly yeah and obviously everything's gonna be different with every company right depending on there's so many different companies different industries whatever but you mentioned like something's at home run right away what would that even look like then for a company like oh wow yeah that's someone we you just know it honestly like that's that's just like a it's partly a gut thing yeah you just know it there's no quantitative well write his name behind that yeah you just kind of feel it from yeah if everyone just looks

00:09:25 at and and sometimes whether the truth is sometimes those are the ones that you lose your money on right and I think more often than not it's the controversial ones the ones you have to really do the work those are the best companies you know some of our best performing companies now looking back in the last three to four years have been the ones where we've had actually some discrepancies amongst the team where we had to work through it because I think you know you look at some of the the greatest examples in tech Airbnb uber

00:09:51 some of these these companies that have gone on to be you know colossal successes you go back to their early investors and they were almost all very split decisions yeah I don't remember the firm but but one of the firms who invested in Airbnb talks about this and where they say like it was a it was a real process to actually get it across the line because people you know and as you can imagine go back so the early days yeah you're gonna sleep on someone's random couch like it's it's one of those really weird out-of-the-box

00:10:20 conversations that people weren't necessarily thinking about oh wait no they're gonna be the largest hotel chain in the world yeah and everyone is gonna do this right and so it just doesn't you know you have to be able to have some some I'd say some friction yeah in order to really make a company that's actually gonna be game-changing and so I don't necessarily love the companies as much when it's like everyone's like oh this is an absolute no-brainer I think fighting for it a little bit and having real conviction in certain

00:10:47 aspects of the business and having conviction and that business's ability to create a market is key to yeah potentially doing something that's not just a hundred million dollars but looking for those 50 billion dollar companies one to that point to it if it's a no-brainer for you guys and there's a no-brainer for everyone else so that's that type of thing so why us why is that's gonna be direct exactly yeah and then with that to them on the other side of things Huck there's obviously gonna be some factors that

00:11:11 immediately kind of take people out of it like that startup like no we're not gonna invest in there what are some of those things where you guys were you're like yeah that's just a no for certain companies the immediate knows you know I look the reality is I think most of the time the immediate knows are coming from one of two things one I don't see that value like I don't I don't look whatever the story is that they're telling the product value is not clear so whatever the business is I'll ask you know why is

00:11:41 this something that someone can't live without why is this a product that is such a pain point that they're gonna be willing to pay more money for what is this replacing if it's a SAS business for instance right what product is this replacing and if I don't feel like right away that there's something very clear that they're they're either producing some form of like indispensable value for that company or customer that's a very quick easy no yeah um the other thing is just the founders I mean I

00:12:10 think ultimately it's not always whether or not I think sometimes real like oh well this founder has grind or effort or you know the tenacity to be successful that's one component but I also think something that people don't talk about as much is is this person unfairly positioned to be the most successful entrepreneur in the specific job right yeah it's not just about do they have that entrepreneurial spirit to be successful not every business for every entrepreneur matches up that entrepreneur may be amazing to develop a

00:12:40 SAS business right they just they're built that way they're I don't care what the SAS business is give them a chance but if you're building a consumer software business or a consumer goods business whatever you're gonna have to have a sense of taste you're gonna have to have a sense of cool factor you have to understand what's gonna catch and that just doesn't necessarily come from you know hard work and whatnot so matching the and that's just like high level if you're going into a business that has any sort of regulations or

00:13:09 anything like that a real strong understanding how to navigate those regulations I think is huge and so sometimes I think more often than not I'll look at a founder to say I just don't think you're the right person to build this not because you are not smarter and it's not about that it says I don't see that you're the right person to actually build this product yeah and knowing though that obviously the company doesn't have more than the founder it's gonna be a finding team like what are you looking for industry

00:13:30 expertise from what at least one of them right how do you what are you looking for in terms of that team makeup and dynamic yeah I mean I think this most often when we're looking at software we would like to see a technical co-founder right that's it's only and really it comes down to the fact of you're gonna have to make a lot of changes along the way the product that you have today at our stage again being super super early the product that you have at our stage really won't probably be the product

00:13:59 that you have in a year or two like you're gonna have to pivot you're gonna have to be nimble and what gives you an unfair advantage as a start-up versa massive conglomerate is the fact that you can be nimble so if you don't have that strong technical team or a technical founder it makes it a little bit more difficult not saying we won't invest in founders that aren't technical but it definitely helps I think answering this question is a little bit difficult at the micro level just because every company is so

00:14:24 different right so just saying like that the founding team or anything but like that is sort of a high level nuanced component of the founding teams that we're looking at that I think are across the board pretty consistent yeah they all they all have a technical co-founder within that and they have yes they don't all have one but a large percentage oh okay gotcha and then I with that with founders as well and with the startups what kind of challenges you typically see them facing that you guys can help

00:14:50 them with or that you have expertise to kind of guide them the right direction like yeah my background is in operations we I think like many other early-stage venture funds there are certain there are certain things you have to do right you have to help them with fundraising that's just the reality and that's a if not the most important thing for a venture back business one that you plan on having to raise capital for you have to put them in a position to be able to raise money so that means introductions

00:15:23 means helping them with their pitch helping them you know shape their their story understand the KPIs that they need to track and go after that's table stakes right yeah I think that's kind of like the low level we do a good job of that I think we've really done a great job of establishing ourselves in that front but as I mentioned I think the big thing that we really focus on is helping people with their product brand brand strategy and story that's where we've tried to put our focus on because that's

00:15:52 a differentiator and and every as I said every business needs to do that and so I think ultimately you know all of the things that we provide which we've created a very strong platform some of the companies that we invest in we actually bring in-house Wow unlike a traditional accelerator there's no classes demo days no standard terms no like requirements of you know showing up insurance certain times but we do provide a lot of the same resources a very strong mentor expert network that we continue to add on to again trying to

00:16:26 focus as much as we can on this concept of storytelling and being a little bit unique in that front we do have a lot of other great mentors that can help you build your sales team or help you you know with the dev team or whatever it may be or recruiting we have a very strong partner network so wonderful people that we've vetted vendors that can help you along the way because as a early-stage startup you can't do everything you can't hire for everything you're gonna have to outsource a variety of things to get you to that next stage

00:16:50 and so we feel why don't we do a lot of the vetting for them so that when they say hey we're looking for a great you know paid marketing agency or we're looking for a new law firm and we're looking for real estate whatever it is we have a strong vetted list of partners that we trust and then you know I think finally just the fact that we are very scrappy as a fund it permeates into our investments yeah roll up our sleeves and we do what we can sometimes companies need our help sometimes they don't and

00:17:19 sometimes the bets like the best thing you can do is not get involved yeah so if things are going really well and like they don't need your help well don't screw it up right and so what I bothers me sometimes is investors feel like they have to constantly be involved with every single decision well you know keep an eye on it but overall be there as support and sometimes we get very involved but no no you know not every investment we make yeah it depends on the company it's kind of always moving forward so it always depends on

00:17:48 that and one day I'm wondering too is with these different companies and investing obviously a multitude of them like what are some of the reasons why startups fail and that people kind of know this from some other examples but I'm just curious on your perspective on why you think startups tend to fail or what you've seen with your companies or anything at all yeah I'll just take the the learnings from I mean we've had a handful of companies already go under it's just the nature of our business

00:18:13 course a couple times they failed because they didn't have enough they weren't funded enough in the beginning they just they needed to raise more money to reach a product market fit now would they have I don't know but that definitely took woat a friend of ours at amplified Palmer Cole and I'm a butcher this so I'm sorry Paul but we don't want to give them enough rope to hang themselves right so you want to make sure that they have enough funding to reach whatever the hell product market fit is right but to reach

00:18:45 some kind of threshold that they can then go and raise their next round of funding or even take their company to profitability so that's one that's happened a couple times very poor cash management has happened a couple times where I've you know they have been sufficiently funded but they are almost overly cocky that they'll be able to raise so they you know pump in millions of dollars into a business with the assumption that will you know snap their fingers and they'll raise yeah that's unfortunate because a lot of people lose

00:19:18 their shirts on those types of investments and that those ones hurt the most because obviously if you're like wow they were so capitalized and they still didn't even reach they didn't even get out to market like that's crazy to me right so that happens and that's tough and then like the odd one of the obvious ones is you just don't reach part you try everything and you know you're converting customers at 1% and you just can't for you've tried everything and you've exhausted all your different options you've pivoted three

00:19:41 times and just there's not a market for it there was a thesis that we had early on and investing in a space and ultimately we were wrong yeah and that's how most companies I think fail especially if you've got the founders correctly they will give it it you know the right shot yeah and they'll continue to iterate and and try everything they can but ultimately sometimes it just doesn't work yeah and one thing I don't think many people talk about what is that conversation like with the founder when trying to decide it's not gonna

00:20:06 work you can kind of see that they're not sure they may be asking you for advice how does that go yeah I think with every found every founder handled it differently um you know I think the only thing we can ask for the only thing we can ask for as as investors is that you try everything you can right like don't give up right away iterate iterate iterate test different things because you never know something maybe there's like your biggest home run swing something this works but ultimately you know you do what you can to be to be the

00:20:36 best fiduciary to your investors and we make these investments knowing that most of them are gonna fail so you know don't hide certain things be very upfront and transparent and let us help you and I think the people the founders who let us do that look it's just again we will support you and maybe even invest in you in your next company because you did that right yeah that's the key what areas of the startup landscape are you most excited about right now I think messaging is the you know the next I don't want to say frontier

00:21:08 because it's not but the next there's a lot of companies that are being built off of messaging we have a couple in our portfolio that are focusing on it you know I think that when you look at other culture one of the ways that you can often see sort of how trends are going is you just look at other countries and you know where they've developed into and looking at China and and how they use WeChat and the level of how their lives sort of function around the just text messaging experience I think and

00:21:37 again we function very differently in the u.s. than we do in other countries specifically in Asia but I think that we're gonna see a strong shift towards more platforms that are built off of the SMS experience and I know like right now a lot of people are building stuff on facebook Messenger and a variety of other platforms I think ultimately the SMS experience is what were not only addicted to because the open rates are 98% within I forget it within like 30 seconds or something crazy but you know it's become a and I

00:22:13 always I always laugh about this but my message is the most powerful social media platform in the world kind of if you look at a kid and a kid being a teenager in this day and age yes they're all obviously on snapchat and the socials and the snapchat numbers are actually incredible still you know how you know how old you are is is when you can still call it snapchat cuz it snaps now right yeah snapchat but if you look at a phone of a teenager they probably have forty to a hundred group messages

00:22:48 going at once oh yeah that are across a wide variety of conversations and topics and if you take if you sort of remove yourself from that and think about it and all of the you know the the add-ons the applications that iMessage has that they're using to to enhance that content that isn't contemplate that's social media yeah exactly and so all of these conversations are super hyper specific to their personalization and I think that and what I mean by that is you'll have like a group chat with a few of

00:23:16 your friends talking about Game of Thrones and you'll have some people talking about you know mundane are your fantasy football league where you have you're just like random you name it I've just seen really rant I have some random group chats that I don't even want to talk about 30 MB a group chats at USC it's so wild right so these group chats are permeating across the younger generation it's becoming a version of social media and I think with that there's an expectation of personalization that comes with the

00:23:42 the every platform that we interact with I think that there is almost a a narcissistic expectation that everything is built for us which you know to me it's like you're just an aspect but the reality is you know it's just an expectation that everything is tailored and personalized for the individual and so any product that you're creating right now you have to take that into account and so it doesn't necessarily have to be messaging but thinking about why message is becoming the most powerful platform

00:24:13 yeah is because me you you know everyone is is is expecting a very personal experience whether it's shopping whether it's content whatever it is that you're doing your browsing experiences have to be tailored for you which again like someone our statistic if you think about it's like well why are you so special because you're not or me but that's what we're starting to see a lot more more of customization around those types of platforms I think it's interesting I mean with that done to it what do you

00:24:44 think are the actual opportunities in terms of businesses I building on top of applications on top of there but like how does that work yeah I mean like I've I'll just give you a few examples well sure we have a company called community which is is growing really fast but it's a platform that allows brands artists influencers I think they're focusing right now on artists mostly but to be able to put out a ten digit phone number and have their fans communicate that with them through text message right and

00:25:11 that essentially is just social media if you think about it mean it's not like 10 million people communicating with Beyonce Knowles is not her sitting there all day texting with them I don't think any expectation of that happening but through these conversations the the content that that she's sending out to her fans is gonna be personalized to those individuals whether it is based on their age their location their gender their interests whatever it may be they start to get to know the individuals far

00:25:39 better than any sort of billboard social media platform can do like Twitter and Instagram and so on yeah and so like there's one example that's actually a b2b business they're actually selling to the artists who then you know utilize their platform which is interesting another one that you know that I've seen there's a lot of customer service platforms but specifically tailored for certain industries I've seen some subscription services where they'll text you you know every single day I think Gary Vaynerchuk has

00:26:05 one wine wine tech yeah right so you sends out a text every day of some wine deal and you just say yes or no and it's like wow done right that's a totally different way of shopping than we've had even a year or two ago so there's a lot of platforms that you'll I mean I wouldn't be surprised if if there was a very specific Shopify form that was created just for text messaging yeah I'm granted Shopify me do this because it's company exact but uh you know I I'm very bullish on Shopify because of a variety of things and

00:26:35 that's you know concept of personalized shopping they just passed eBay I think a second biggest behind Amazon yeah I think it's only a matter of time today yeah I mean I don't know I don't know the public markets also don't don't take this as a horseman buying that stock right there's anything else in terms of just things you're excited about besides messaging or is that just the main one you've been thinking about um I mean I've always been a fan of vertical SAS businesses and what that means specifically is find a problem that is

00:27:05 antiquated and solve it specifically you know I think we have a lot of platforms that are trying to solve everything at once but if you actually solve a very specific pain point going back to my valued conversation if you solve a very specific pain point and then sort of enter into a space through that and then permeate once you're in this base into other verticals yeah I think that there's something really cool there you know we have a few businesses that we've invested that have really solved the

00:27:28 specific problem for a specific demographic Salons need help with X right yeah I think there's a lot of value to those types of businesses I like to look at those and and try to understand the customer it's a lot easier to understand the customer because you can spend time with very specific other than being like oh yeah we're gonna send sell to companies right well what companies I pretty much any company can use this okay yeah that's wonderful I can't wait for that right that's quite the market you have exactly

00:27:55 with that - then so knowing that's like kind of startups I like different industries there what do you see the changes being in venture capital in the next few years anything specific industry as a whole where it's going like really anything yeah well so we've we have a ton of money in the space right there's there's money there's money being invested across a variety of different players angels have a ton of liquidity family offices have more liquidity than they have in a very very long time we have a

00:28:25 lot of venture funds not only in LA but obviously across the country and so and and more importantly you even have like large PE firms funneling down to as early is like late seed which is crazy and so with that you're seeing a lot of businesses getting funded that shouldn't right there's a lot of irresponsible investing prices are going through the roof in terms of valuations which I think ultimately gonna hurt the entrepreneurs more than anything because the reality is you have to build a business in the end at a certain point

00:28:58 like you can raise all the money in the world but you have to prove something out and if you're a piece of [ __ ] business you're a piece of [ __ ] business right right and so with all this money coming in there's a lot of bad businesses getting funded so I think the next year or two is gonna there's gonna be a correction of sorts and it may not have anything to do with the markets themselves it's just at a certain point like the other shoe has to drop so we'll see yeah and with that you obviously

00:29:21 have talked about the VC side of investing kind what you're looking for due diligence process for the founders what should they be looking for in a venture capitalist or an investor in their company you just don't want them to be an [ __ ] right I think one yeah I mean I think ultimately like it's very rare that a venture investor will be the reason you're successful but very often that investor it can be the reason you're a failure and I've seen more like more often than not VCS causing problems

00:29:50 versus being a solution now there are obviously there are tons of amazing venture capitalists out there that that opened tons of doors and provide incredible feedback and help businesses and I'm not saying that but that vetting process a long time ago when I was an operator I was speaking to Ron Conway who is a very successful investor up in the bay and he did a whole seminar on interviewing your investor and how important it is that you do diligence on your investor so just like a whole conversation about like the diligence

00:30:28 process which normally we talk about like today yeah on our end but do the diligence process for your investors yeah and you may get you know starry-eyed by the idea of a brand or you may get started out by the idea of of just a check in general yeah but that can ultimately be the reason that you fail so really making sure that you're in line both morally but also just with the vision of your business with the investors that you're bringing on because they're like co-founders so you know how you however

00:30:56 you would vet a co-founder at the early stage specifically you should be vetting your VCS as well yeah and with that to have to dig deeper are there any questions you'd actually suggest they ask if you see like you should be asking this or this or this anything that comes to mind that they should I mean I think about I think the high-level one would just like what specifically is interesting to you about our business right like that's a huge thing yeah right why do you want to invest in my business I think people don't want to

00:31:22 ask that question because they're afraid that maybe like I'm gonna convince them through this question that they're not gonna know this you you should know why I Lauren I'm excited about investing in your business yeah because ultimately like if I don't have that conviction and buy-in and if I'm sort of just playing along and and I think something's good here all right that's that's like an telltale sign of this is probably not gonna be like a long term relationship especially when [ __ ] hits the fan yeah right because

00:31:50 almost every business we've invested in had some downturn it may not you know some are less than others but you have to work through it and if you don't have the conviction as an investor to help them and feel confident that we're gonna get through that you're gonna ultimately kind of toss them to the curb and focus on something else yeah and so I think that's like a great question to ask a lot of the other ones are more generic but I think that one's a big one ask yeah there anything that would be a cap on their side as well I

00:32:14 know where they probably shouldn't take on that investor you mentioned that then being an a so obviously what does that even how are they know early on like wolf I'm Ivette that yes especially others I was going to say the best way to vet that is I would I mean I offer this to all of our our potential investments but it's you should talk to other founders in the portfolio yeah and I think you know for me I say look let me know any founders you want to talk to I'm happy to make that that connection

00:32:41 you know ideally you don't ask this person this person or this person because no I'm just kidding no but you know we we we genuinely encourage our founders to to connect with some of our other founders because look I think if you do good work you shouldn't be afraid of make a connection right in terms of VC in your career how'd you get in a VC in the first place luck and timing I don't know I well luck depending on if you think that what I do right now is awesome and that's a whole nother conversation maybe maybe unlucky

00:33:14 actually maybe I shouldn't I wish I didn't okay so I was an operator a variety of different companies early stage seed companies founder early founding team I've been you know in variety of different tech businesses across you know IDI educational software video streaming food delivery marketplace on-demand service I worked at I worked for a vet company for a while so I've been in a variety of businesses as a generalist frankly I mean I really am NOT an expert in anything something I sometimes regret is that I didn't learn

00:33:51 a skill in college specifically coding or design yeah I think you know if anyone who's in college or high school is thinking about what they're going to study in school study a skill because like the amount of flexibility that you you doesn't mean you have to be a coder but the amount of flexibility that you have in order to build a business is just endless and the fact that I'm reliant on someone else to do everything I wanted to do in terms of vision is very difficult right and so point is I was a generalist across a variety of

00:34:21 different types of businesses and I met the luma team who was looking to build out luma launch wasn't even called women launched at the time but we luma yeah and we were in line with our visions and that was you know almost four years four years ago so yeah is it what you expected I think the perception of VC and the reality of VC are two different things especially at our stage yeah you know it's a lot of work and you know I think there's this perception that and it rightfully so there's sort of this

00:34:58 armchair expert I'm sitting here right now talking to you like as if I'm some expert and I don't know [ __ ] right so like the reality is you know we I've spent a good amount of time in the tech industry and now I've done this long enough to at least be able to wreck a certain pattern recognition and and be helpful where I can but I think what's really dangerous with these C's is when they start feeling like they have a sense of entitlement and when there's like we're better than other founders

00:35:22 frankly I think that founders are inv founders I don't have I don't think I have the gene that it takes to be crazy enough to be a founder because it's so hard like you have to work you know through through so many difficult times and and you have to have the as I said almost like a naivety like when it goes to naivete when you're yeah that when you're going into a business because there are so many difficult moments that come with that and so being on the VC side I often kind of take a look through the

00:35:58 the looking-glass in this case and I'm mvs because it's like when you see the success of a linear product right when you when you work for a week and you look back and you go wow look what we built yeah I don't get that right I think a lot of this is hamsterwheel I'm running on a hamster wheel I'm running on a hamster wheel you do diligence for a while and you make a decision you go left or right and it's like swipe left swipe right like tinder of founders and so you know like you either say no and you get back on the

00:36:28 hamster wheel and you do it all over again you see yes and guess what you're back on the hamster wheel into doing it again and there's a lack of like this is the negative no we'll talk about the positive real quickly but there's sort of a lack of accomplishment sometimes that comes with that and then even when you get involved to the businesses which we do and we're very hands-on it's still their company and it'll always be their company and like their success we'd love to share with that but like ultimately

00:36:53 you know we're supportive we're you know we're a co-founder but we're not right we're involved as much as we can and then you kind of go back and you sort of look at another deal now to me it's great because I'm super ad D I love the idea of being able to like dive headfirst into something the next day come back and go into you know one day I'm in a social media product and then I'm in a you know content business then I'm in a consumer software business that's fun and and yet like the fact is I get to meet some of the smartest

00:37:21 people in the world and you're meeting some time people who are trying to take crazy swings you're like how like it's it's incredible to like listen to some of the these founders talk whether I invest or not yeah and I think that's the plus I get to meet some of the coolest people and you know the actual job itself is fun but there are some things that people don't see that are you know it takes a toll on you for sure yeah and you kind of mentioned like there's obviously working in different companies

00:37:45 different days but I'm here since - like what your day a day or week to week kind of looks like as a VCI LUMO right now I go to the beach Monday through the perception of you see is that like we like watching yeah some of it's true we yeah so I mean look my days are filled with meetings I think the way that you can be a good early stage of you see is you talk to as many entrepreneurs as you possibly can pattern-recognition to an extent is a big part of success is just seeing what's out there and understanding you

00:38:20 know what is good verse what is bad because if you only see bad you're gonna assume that it's good or you're gonna force yourself to think it's good so I take a lot of meetings I you know I'm constantly interfacing with other investors not only because of deal flow you because that's actually a small part of it for me a lot of is because I have all of these early investors I mean early founders and I need to sort of help them out and so you know constantly talking to later stage investors about

00:38:46 what our portfolio is doing how they're doing who to keep an eye on so I travel a lot to do that as well and then obviously in between all of that helping those companies wherever possible so you know it depending on the day we could be working on a variety of things just maybe just sitting down and listening to them complain about how they've had a really rough week which is actually incredibly important to be a supportive founders or a supportive investor - founders is understanding that they're

00:39:11 humans as well yeah ultimately you know one of my biggest challenges and I won't see what the founder is there you know who you are I've told them dozens of times like I need you to just take a day off and relax because you're burning yourself out and just because you're doing 14 hours a day of work doesn't mean you're getting 14 hours of productivity if you take some time for yourself and you actually you know regenerate recoup that 14 hours will be like 16 hours or more importantly you can do nine to 10 to 12

00:39:36 hours and it will be 14 hours of work right and so sometimes you just got to be the voice of reason in the room and so I try to spend some time really talking to founders whenever possible when I feel like they needed yeah which is helpful and obviously they have liked you as a resource they have you to go to or your team and go to but then what other resources or things do you suggest to the founders entrepreneurs to help them as they build their companies if you have anything at all specifically that you think of that

00:40:01 you suggest to them what are like some of the resources but they books whether it be anything at all that they should look at yes you know I know the books thing I think is funny so like a lot of a lot of funds will like to hear you know give a bunch of books to their founders when they first invest I kind of want to do that in some ways but I I can suggest books at times I don't you know I don't want to be the the person that does that but you know I think for us the resources come from really the

00:40:33 mentor Network you know we just have a when we started launch the premise was to create a platform that was community based yeah LA is still very nascent we're still extremely small in comparison to San Francisco and a little bit and frankly in comparison to New York and so I think right now it's about sort of rising the tide for the entire LA ecosystem and part of that is a lot of people here who are extremely successful want to give back and we're giving them a forum to do that and so we have a you know I know amplifies done a

00:41:03 great job of this and and mucker and and a long list of other funds have done a great job of cultivating the ecosystem of people who have been successful in a variety of different verticals to support these early stage investor early stage founders and I stress that you know that's the number one resource but more importantly I think the best resource that any of our companies have had is the other portfolio companies in our port like better surrounding them so if they work in our space the best advice or the the most valuable

00:41:36 experiences have actually come from just founders sitting next to each other and having conversations about some of the problems that they're having and getting advice yeah which just shows the power of having that community that can office not a we work yeah people think we have a co-working space like no it's a portfolio company so we work yeah Touche anything else did want to tell entrepreneurs founders anything you think of anything at all really before we wrap things up you know I think just

00:42:00 like how we need to think about founders as people I think it's important to understand that investors you know there's a person behind the investor as well and so when you're going out and raising capital the importance of connecting with a human being is vital to success especially early on I'm pretty rough around the edges when it comes to like I don't I don't fall under a lot of the the social norms that are expected from these seas and I do that on purpose because I think that you know I'm a young investor in the grand scheme

00:42:32 of things a lot of VCS have 30 40 years of experience there's kind of their retirement swan song when they're in the VC side and it's a very different experience to have me as an investor on your cap table than having someone who is 50 60 years old who has been through multiple businesses and IPOs and that's amazing and the value of that is you know incomprehensible but recognizing who you're talking to when you walk into the room and having a conversation with a human being is like so incredibly

00:43:02 important for a variety of things because I need to do that as well as you that's when you're going to get the best connections and the best investing relationships and so do your homework in some ways and what I mean by that is get to know the person that you're talking to prior to walking into the room if you're a founder looking for money don't just look at the website and see what they're wearing and I love when I hear that it's like yeah I'm wearing a black t-shirt I wear this in my picture on my

00:43:28 LinkedIn like okay fine so you're not you know I'm not gonna wear a suit great but do you actually know who I am Yeah right um you know I'm originally from Hawaii I moved to LA my parents are divorced I can give you a whole long list listen to some podcasts okay I know right do it if it matters and not because we're important because if you have you have 45 minutes to create a very very important relationship that could change your life it could change my life ideally it's mutually beneficial right if we invest

00:43:56 in an incredible company we're all successful and that's what we want take the time to get to know them once you know unfortunately when you're on our side as a VC I don't necessarily have the same level of time right away to do that but as soon as I feel like you've taken the time and there's a connection made that's what I'm gonna be doing I'm gonna find out as much about you as I can where are you from do you have any brothers or sisters yeah you know what did your parents do and so on and so forth that matters

00:44:21 because that's like the the essence of who you are as a founder is that's who you are as a person I don't want to invest in a piece of [ __ ] right like I want to invest in someone that I am proud to say that person is in my portfolio I took a gamble on that person when you know when they were not doing any revenue what is and frankly my best investments have been because I have like a very strong relationship and so I don't know if any of that made sense but I think that like for me the number one

00:44:47 thing I wish people would take away from some of these talks or whatever this is podcast web series is that make a connection because ultimately that connection is is gonna permeate for a very long time yeah and for you why are you in VC in the first place yes I know how you got here and everything but why I wake up and arguments that question is no it's my question I'll talk to my therapist next week about it why am i envy so why do you stay in BC is about that way right well it sounds like I've

00:45:20 been very negative I'm not I'm not like that's the funny thing I think it's again I think it's super I think everyone has negativity around what they're doing like no matter what you're constantly gonna be questioning what of course is this the right thing for me should I be doing this right of course I've been doing this for four years now and and I love it I don't want any like I don't want you to think that that's not how I feel yeah I just think it's important for people to understand that it's not all you know flowers and

00:45:46 there's a lot that comes into it's a very complex job that complex in the sense that it's a it's a it's a mindfuck right like in the end like you're you're you're constantly like trying to help these founders but it's not your business and your you know there's all of these things that come into play and and do I love you see of course I do I'm an operator at heart though I want to build stuff right so I think that's kind of where launch came from is the fact that we like to build this platform and

00:46:10 build this brand specifically on the concept of supporting our founders and and maybe that's why I sometimes you know I'm a little bit more emotional about the concept of like connecting with those Saunders because it's sort of living vicariously through them yeah do I want to do this moving forward I guess is the question yeah I mean I think that there are different ways that you can be a VC and frankly I think that our industry is kind of [ __ ] up like I think that we need more people who are

00:46:36 willing to to recognize that and and and try to change the dynamics a little bit because ultimately money prevails right if you have the money you can do whatever you want and and that's you know I understand that but at the same time like if we want our founders overall to be successful we need to be thinking about this in a more holistic way and so yes I want to move forward but I want to move forward with the same perspective of not becoming what I hate yeah and and as soon as I become that I

00:47:03 hope my friends and people around me will tell me that you know what happened to the new Lorant that said this you know however many years ago yeah and hopefully get a reality check so I don't I don't become you know what I don't like about VC yeah and I used to mention you love you see but you mentioned you're also an operator and you don't get to share in the same thing if you're if you're a founder it's different than if you're the investor do you think you'll ever get back into starting a company I don't know yeah maybe as I

00:47:28 said I don't think I'm a I'm definitely not a solo founder yeah I'm an operator I'm pretty analytical I'd like to I don't believe that I'm necessarily the big vision guy and then what I mean by I may have ideas but there's a very big gesture I have an idea in having a big vision I'm I probably would live more on like the CEO Oh role as an operator in terms of my my mental thing but I don't know what I'm gonna do Yeah right like talk to me in 10 years we'll see what happens yeah I kind of you know I do my

00:47:55 best to to be the best investor today that I can be for luma and and continue to build our portfolio and be as supportive to our founders as I can and you know whatever happens in the future is is why it's called the future yeah Touche where can people go to reach out to connect with you our website is luma launch com we do take applications for investment whether it's are coming into our space or just traditional like seed investment I highly recommend you get someone to also recommend you I hate

00:48:34 when people say this but it's true and I specifically say it because it's sort of a barometer to understanding your ability to to find a connection and hustle I think like anything else I'm not that hard to get in touch with you know I I'm I'm fairly responsive as much as I possibly can but we do get such a massive influx of inbound yeah that in order to like squeak through the noise it's very unlikely that it's gonna happen simply from just like a cold you know cold email yeah and I think every

00:49:02 investor says oh well we'll look at cold emails and I say the same thing but the reality is we do look at it but it doesn't necessarily speak to who you are as a person and I think that that's the difference is I need to know that what I'm looking at isn't just an idea on a piece of paper because there's the amount of the same idea that I see doesn't differentiate you from the rest yeah so try to figure out some unique way of connecting with us because I think that you know there are a few of us and I'm

00:49:25 sure that you can figure something on and if you don't have look a lot of people don't have great connections and I totally understand that so you know good luck I mean I I'm not I'm out and about all the time to find me and I'll talk to you I'll spend as much time as I possibly can you know after events and and have a conversation in person I'd rather do that and then do cold emails yeah LaRon thank you so much for coming the show thanks for having me thanks for checking out stir up 2.0 from spark XYZ

00:49:50 if you want to learn more about startups and investing and check us out join the ecosystem at spark XYZ dot IO