Jonathan Heiliger, General Partner at Vertex Ventures, talks about how the startup ecosystem has changed, and explains why founders DO/DON’T need to be in Silicon Valley. Jonathan also sheds light on the problem of matchmaking. He proposes solutions for ensuring that founders meet and partner with investors who are fit for them.
Jonathan Heiliger, General Partner at Vertex Ventures, talks about how the startup ecosystem has changed, and explains why founders DO/DON’T need to be in Silicon Valley. Jonathan also sheds light on the problem of matchmaking. He proposes solutions for ensuring that founders meet and partner with investors who are fit for them.
In this episode, you’ll learn:
4:27 A lot has changed in the startup ecosystem but Silicon Valley hasn’t lost its culture of supporting people.
16:05 What founders should expect when they work with investors and partners who run a concentrated portfolio.
24:28 Diversity in technology hubs is critical to maximizing the technology revolution’s potential
Non-profit organization that Jonathan is passionate about: VC OpenDoor
Jonathan Heiliger is a General Partner at Vertex Ventures. Jonathan currently serves on the board of directors of Webmonsters, in addition to Vertex portfolio companies PerimeterX, CloudAcademy, and SpaceIQ. He has individually invested in and actively helped several companies, including Cloudera, Coravin, Diffbot, Dropbox, Square, and ThousandEyes.
Prior to founding Vertex Ventures, Jonathan started the seed practice at North Bridge Venture Partners where he was General Partner (2012- 2014) and led global infrastructure, site architecture, and internal systems at Facebook (2007- 2012). Previously, Jonathan held executive engineering roles at Wal-Mart and Danger (acquired by Microsoft), was COO for Loudcloud (Opsware), and co-founder and CTO of GlobalCenter.
Fun fact: Jonathan started rebelling against his parents when he was nine years old by staying up all night to game, hack, and program a new computer.
Vertex Ventures is a global network of operator-investors who manage portfolios in the U.S., China, Israel, India and Southeast Asia. Vertex is a trusted partner to some of the world’s most enterprising founders who seek to disrupt large markets. The firm supports entrepreneurs with unmatched operating experience and deep access to the capital, talent, partners and customers they need to build truly global businesses. Its portfolio includes LaunchDarkly, PerimeterX, Very Good Security (VGS), Desktop Metal, testlio, and many more.
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Jonathan Heiliger: When I was growing up, my dad said I was a donkey because I would just keep running into the wall rather than looking for a way around it. I work with entrepreneurs who are the clever types, who are constantly looking and finding shortcuts and ways around things. But for most entrepreneurs, there's an element of, "hey, I'm willing to grind because it's not easy. It's actually more interesting."
Gopi Rangan: You are listening to The Sure Shot Entrepreneur, a podcast for founders with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision.
Welcome to The Sure Shot Entrepreneur. My guest today is Jonathan Heiliger. He's a General Partner at Vertex Ventures, based out of Palo Alto. We're going to talk about his investments in startups, what he looks for in entrepreneurs, what excites him, and why he does say no sometimes? Jonathan, welcome to The Sure Shot Entrepreneur.
Jonathan Heiliger: Thanks so much for having me.
Gopi Rangan: Tell us about yourself starting with your journey into venture capital.
Jonathan Heiliger: My personal journey into venture capital was long and twisted. I grew up in the Bay Area, almost dropped out of high school, didn't make it into college, but I was able to start a company. And prior to just doing that, I worked on commercializing the internet at Stanford and highly wanted to go to Stanford because...why not? But I didn't get in despite working on commercializing the internet there. I ended up starting a web hosting company when I was 19, a couple of years later, and I met Mike Moritz He was the first investor in our company. And that company was called ISI at the time and it grew up to bigger and better things in the hosting world. Ultimately, it was acquired by Global Crossing, where I was CTO and ran the network and did a bunch of other things including scouting for startups that would allow us to differentiate our product portfolio relative to our competitors at the time, like Sprint and Verizon and Level 3.
That led me to start a corporate venture fund for Global Crossing in 1999, which was either a great time or a terrible time to be an investor. For us, it worked out pretty well. We returned great multiples on our capital, but I also discovered at the ripe old age of 22 or 23, that I wasn't ready to have two breakfasts, two lunches, two dinners a day, and just chase around other VCs. I wanted to still be an entrepreneur. So, I quit and joined a company called LoudCloud at its inception. It's where I met one of my partners, worked with Ben Mark for many years, and fell in love with being an entrepreneur again. I sort of experienced that yo-yo a few more times working at places like Walmart and scaling their infrastructure, then Sequoia Capital, and hanging out and working with pretty much every partner there, deals and investments and diligence and different things.
I went back to the operating side once again at Facebook, joined there in 2007 and worked for Mark until 2012 - when there were about 1 billion people on the site - building and scaling their infrastructure team. It was at that point that I decided I was firmly committed to helping and mentoring and guiding and just sharing the lessons learned and the bumps and bruises I had accumulated with founders and with companies.
When I left Facebook, I spent a bunch of time interviewing at venture funds, which is probably worth a podcast into itself because it's a long and arduous process where you generally have the same conversation over and over again, because most venture funds are not comprised of operators and so they don't tend to coordinate very well. I ended up joining a fund, was there for a short period of time, about two, three years before the fund ended up not continuing. My pendulum swung in the other direction again and wanted to be an entrepreneur. So, I got together with In Sik Rhee, the co-founder of LoudCloud. He and I decided that we wanted to work together and start a venture fund together. That's what led us to create Vertex in the US. Vertex is a network of funds. We share the brand Vertex and we share an anchor investor in Twilio sec, but all of the different vertices, we have cousins in Israel and China and Southeast Asia. All are run and managed separately. That's what we did six years ago, and we have decided to be focused and concentrated investors, which unfortunately means we say no to a lot of things because we want to do a few things. We want to be meaningful and engaged advisors and helpers for those founders rather than making lots and lots of investments. That's not to say that one strategy is better than the other. It's just our particular strategy. At the end of the day, venture funds are comprised of people, mostly making human decisions, not data-driven decisions, especially at the early stages.
Gopi Rangan: This is fascinating. I want to talk about how you make decisions, how you use data today. But there's a lot to unpack here. I see that you are one of the original nerds of Silicon Valley trying to commercialize the internet. And you jumped on both sides, on the entrepreneurship side, and on the investment side a few times. You've seen a ton of changes happen over the past couple of decades since the mid-nineties in Silicon Valley.
How is the startup ecosystem different today compared to how it was when you were starting companies?
Jonathan Heiliger: Oh goodness! Wildly different, Gopi. Starting at a high level, the earth is flat in startup land. Most founders and technologists, not all [and one thing we should talk about is people who've been inside of Silicon valley institutions versus not been inside of Silicon Valley institutions...and I use the word Silicon Valley here to represent tech institutions regardless of where they are] but most founders tend to be one or two hops away from other technologists and people that want to brainstorm entrepreneurial ideas and take that kind of risk. Many decades ago, before I had as much gray hair as I have now, that wasn't the case. You would raise $5 or $10 million. That was your Series A and you would immediately spend half of that budget on buying server hardware and infrastructure and data centers and all that type of thing. The cloud has forever changed that and turned that into cents and dollars to get up and going. Of course, it gets more expensive once you have millions of users, but at least to start things off, you don't need millions of dollars to build a website anymore.
The other big change from the technical standpoint is that open-source software has really blossomed. When we started LoudCloud, open source was in its infancy. Linux was the only f dominant and scale project, and it was competing against Sun Solaris, IBM's AIX operating system but you couldn't build your entire application stack using open source at the time. Today, you can, and you can either use it for free, you do all the work or you could pay for it. As I said, it's for cents and dollars, either from cloud providers or from lots of other third-party infrastructure people.
The last piece is, access to capital has gotten significantly greater. The number of dollars in private equity and venture capital has risen dramatically. There are lots of good statistics there for single-digit billions to hundreds of billions of dollars in the last 20 years. There's a good reason for it. It's that technology has been the single largest contributor to GDP growth in the US and possibly in the world over that same period of time. I do think that technology has delivered a lot of very positive returns, both financially and socially on the world, and it will continue to do so.
Gopi Rangan: Access to capital, open-source software, and the cost of starting a company going down - those are all strong, positive trends that have fueled entrepreneurship.
I've been in Silicon Valley for 20-plus years. I feel like the community was much more cohesive. It was a lot easier to reach out to Ben Horowitz's of the world or the Steve Jobs's of the world. If you really wanted to get to them, there was a way to get to them. But today, I think the community has become much more siloed, much harder to get to more prominent people for getting a job, to work in those organizations, but even getting a meeting with those people has become quite difficult.
Maybe that's the sign of maturity, where the ecosystem is much stronger and there are a lot more people. But I do miss those good days when it was easy to get to anybody. It was a casual conversation on University Avenue.
Jonathan Heiliger: I agree the access to people has changed, but by and large, at least the people that I interact with are always leaving the door open or they're leaving time on their calendar to have free forum conversations with people that don't come from a qualified intro and so forth. That sort of openness at Silicon Valley still exists. Is that what you're referring to or is it the accessibility of people?
Gopi Rangan: It's the sheer volume of people. It's fairly hard to find a connection that easily gets us to the people we want to. It becomes much more difficult because the network is much broader and wider, but that culture of supporting people, keeping the door open, it's still there. And I think that's part of the magic of Silicon Valley. You mentioned that you don't like to do two lunches, two breakfasts, and two dinners, but you are in the business. Being in venture capital is doing those things. Why is venture capital interesting to you? Why do you like this job?
Jonathan Heiliger: I'm sure there's a good multi-layer chocolate cake waiting for us after the answer to that question, Gopi😃.
I do think that one of the great things about venture capital is that it's a little bit like joining an early-stage startup, but rather than doing it serially, you're doing several in parallel. We have some key differences. When I was an operator, I could join one company and work at one company at a time. But obviously, I had friends who asked for help or advice, or I asked them for their help and their advice. So, I would reserve time for those conversations. Now as a VC, our job is to look out horizontally at all of the things that are happening in the market, in the landscape, and bring back data and perspective to the founder or founders who are running the business and has to be focused on just running and scaling the business. To me, that's one of the funniest things. It means that you have to constantly be learning. It means that you get to help people and really help people think through meaningful problems about their business. Maybe there's a very limited set of people they can talk to about the problems, whether it's their spouse or their co-founder or something like that. Oftentimes, there are really thorny human issues or strategic issues, and I spend a lot of my time as that sounding board for the founder. It's not about coming up with the right answer, but in turn, asking different questions and then being able to connect that founder to other smarter, actually talented people, not VCs like me, in helping him or her resolve whatever the strategic questions are or product questions are that they're wrestling with?
Gopi Rangan: Yeah, there's the operator side of you that really wants to build things and the desire for you to work on multiple projects at the same time. You're marrying the two of those. This role as a VC allows you to work with some fabulous founders. You can build and at the same time you can support these founders create their vision.
Jonathan Heiliger: That's really the hope. And I've been doing this now since about 2013, which means I'm sort of in the awkward teenage phase of my career. We've made a handful of investments. The good news is the ones that don't work tend to show themselves earlier than the ones that work...because the ones that work keep working and keep growing. The projects that don't work, just because they don't work doesn't mean that the founders weren't good people or they didn't give it all they could. It may have meant that they were in a bad market or that the market changed out from underneath them and collectively, we all missed something and screwed something up. I still talk to those founders and I guess maybe I'm more impressed that they still talk to me.
Gopi Rangan: I want to talk about founders, but I have one last question about your view on the technology trends. It made sense for founders to be in Silicon Valley in the nineties and early 2000s. This was the center of the universe for innovation. The technology evolution essentially started here. Is that still relevant now? Is Silicon Valley still the center of the universe for technology innovation? Do entrepreneurs need to be here? What is your advice for them?
Jonathan Heiliger: I don't think that entrepreneurs need to be here. I don't think they need to be rooted in Silicon valley, but I do think they need to have a foot in Silicon Valley depending on the type of business they're in for a couple of years. One, there remains incredible serendipity, whether you're on University Avenue or on South Park or Sandhill Road at the Rosewood, in bumping into and meeting people who are potential recruits and employees, investors, partners, et cetera. I think this ecosystem doesn't exist anywhere else as richly as it does in Silicon Valley.
For companies, for example, there's more SaaS businesses than I could count that don't need to necessarily have a presence or have the Silicon Valley DNA. More importantly, if you're starting a Netflix clone for Estonia, you probably don't need to be in Silicon Valley. You actually need to be in your local market and understand the constituency and the users in those local markets. Or if you're starting a ride sharing company, again, you don't need Silicon Valley expertise or DNA or partnerships, at least not at day zero and day one. Where it does matter is if you're building B2B software, if you're building enterprise software, there are not just the deepest well of experience people, by people I mean engineers and product thinkers and marketers, but also salespeople that are either based in Silicon Valley or whose calling card to Silicon Valley, they may be in Texas or Iowa or Colorado - because salespeople and go-to-market people tend to be based everywhere - but the leadership staff and stack tends to be based in Silicon Valley, just rooted in that network.
Looking back at my own career and the different arcs that it has had, a lot of it was based in Silicon Valley. My first company was in Sunnyvale, and we were predominantly based there and then opened a presence in the East Coast. One of the most challenging things, it doesn't matter where you are or what business you're in when you're starting a company, is getting and keeping people on the same page. One of the most pressing piece of advice I got from Mike Moritz is there's no better way to get people to communicate than when you can get everyone in the same room, and when you have that shared context and shared neighborhood of kind of how to process and analyze problems.
Other examples of that is LoudCloud and Opsware. As we were growing and building that company from zero to 600 employees, we had pretty much everyone in Sunnyvale for quite a while, except for the sales team that was distributed. And that was the result of working with folks like Andy Rachleff and Bill Campbell, who were incredible company builders, but also incredible humans, and realizing that as great as even this podcast is, and being able to talk to you today and for people that are going to listen to it tomorrow and well into the future, it's not the same as sitting down and having a cup of coffee or whiskey and working out problems in real time with people.
So, the short answer is; no, you don't have to be in Silicon valley, but I do think that starting a company, wherever it is, having people together as much as possible is the greatest accelerant to getting that company up and going.
Gopi Rangan: Yeah. I see your answers started with a no and then landed on a yes. I see why...because 30% of my portfolio is located in the Silicon Valley. I expected way more. I expected 70% or 80% of these companies will be in Silicon Valley, and I would invest here locally But great entrepreneurs exist anywhere. It's our job as investors to go find them and support them and give them the best space to build great businesses. If they can do it in their hometown, that's even better. But yeah, I still feel like Silicon Valley has the strongest glue. I hope that our other hubs will grow, but if you got to pick one hub, it is Silicon Valley.
Jonathan Heiliger: I would agree. Like you said, 30% of your founders are in Silicon Valley. In the case of Vertex and Vertex US, about half of our first fund, which we started in 2015, came from outside of Silicon Valley. That could be as far away as Ukraine or Korea or India or Boston. In fund two, 75% of the companies were started outside of Silicon Valley. We run a very concentrated portfolio. Both of those funds have 20 companies. That corresponds to 10 companies and 15 companies respectively, so relatively small numbers on an absolute basis. We didn't intentionally seek out founders who were outside of Silicon Valley. These were people who had started their business somewhere and decided to come to Silicon Valley, or in some cases the East Coast, just set up headquarters and business operations. That's when we happened to either intersect with them either just before they made that move and they were in their home market and home country, or just after they made that move because they decided on their own to come to 'Silicon Valley'.
Gopi Rangan: You mentioned a concentrated portfolio and I want to now talk about startups. What does that mean? What does it mean for entrepreneurs when they work with a VC that has a concentrated portfolio, you could feel free to give examples of startups.
Jonathan Heiliger: Sure. What founders should expect when they work with investors and partners who run a concentrated portfolio is hopefully they get people who are accessible and partners who are accessible. We have lots of friends who are on 20 to 25 boards. That's a lot of time spent in board meetings. Personally, I don't find board meetings super productive. I find the Sunday night texts threads or Tuesday afternoon phone calls much more productive than the organized two or three hour sessions, and those sessions can extend to four hours as the company gets close to going public or goes public. I've been involved in a handful of those situations.
In terms of the engaged investor, founders and investors are getting into a relationship. It is a true partnership. It's a marriage, and it's one that is actually very difficult to break. I could divorce my wife faster than I could get off of boards and separate from companies. A lot of founders don't appreciate that when they're hiring an investor or selecting an investor - that it's a long-term relationship, and it's one that is very difficult to separate. You're giving up stock and some amount of control in your company. Some founders are very savvy, probably most famously folks like Mark Zuckerberg at Facebook and Travis Kalanick at Uber retained control of their companies through thick and thin. Most founders don't have that luxury because they're not being pursued by as many investors.
In terms of working with Vertex, the reason we like to be focused and have our focus portfolio is as I said to be engaged, which means that the relationships that I have in enterprise buyers and people who will evaluate and purchase and ultimately help these businesses grow, I can't send them a hundred things and expect them to look at all 100 and say, "yeah, I'm interested in all of this." But when I send them two or three things, the feedback I get is, "Hey, Jonathan, this either isn't a fit right now and here's why, or it is and we really appreciate you being a tastemaker for us." And so, that tastemaking ability with enterprise buyers is something that is very difficult to replicate and scale. We've seen other firms do this and make attempts at programs to run EBCs and all these things. And the feedback we've heard from founders is that it's great almost content marketing and branding, but it's actually has not been meaningful for them in terms of revenue generation, where things like targeted intros and knowing who the buyer is at the right point in time and why the product that the founder is building matches up with the problem the buyer has, that's really where value gets created. So, being able to do those types of things is something that I enjoy and something that we enjoy as a team and as a firm. And that's what has allowed us to be successful with a relatively small portfolio of companies and founders.
Gopi Rangan: You're very articulate in describing how you approach this journey with an entrepreneur at Vertex Ventures. These are long-term relationships. They always start with the first meeting where you're strangers. I really like venture capital for this reason. Quickly, these relationships turn into a long-term relationship that lasts for a lifetime. But in that first meeting, what happens? What are you looking for when you meet an entrepreneur for the first time? What questions do you ask?
Jonathan Heiliger: Great question. One of the things I really like about venture is that we do get to pick who we work with. That's not said arrogantly. It's meant in the sense of "I get to pick that you and I get to work together and we get to talk today. You get to interview me and we're both opting into doing this."
A few things that we really look for in terms of founder archetypes, it starts with visionary builders, people who are doers, who have shown that they can iterate and execute their way into markets. Oftentimes, this is because they've experienced the problem firsthand and they got really frustrated that they experienced this problem and they kept experiencing it. So they had to leave their job and start a company because they wanted to solve it. For example, that's what led us to start PerimeterX with Omri, Ido and Ophir, which is a security company. It was the first investment when we started at Vertex. Or when we met Edith and John, the founders of LaunchDarkly. LaunchDarkly is a feature management platform and allows developers to ship code more confidently. It was something that our infrastructure team at Facebook had built to allow Facebook to scale more rapidly. So, I met Edith, and met John and was like like, "oh! I know this problem well." I'll be honest. At first when I met them and talked to them, I wasn't sure that that was a real company. I thought it was just like a side feature. By the way, I thought the same thing when I heard about Splunk for the first time...and jeez! I was $20 billion wrong on that one. Thankfully, we were able to convince Edith and John to work with us at LaunchDarkly. We're proud investors there.
We also like founders who have high integrity, who are super stubborn and who enjoy going against the herd and actually think that that's fun. Being a founder takes tremendous grit and a willingness to challenge people who say you can't do something and it can't be done that way. When I met Mahmoud, who's the founder of VGS (Very Good Security), that was exactly his mentality. We invested five or six years ago and that's still his mentality today. He wants to not just solve a privacy problem and a data security problem with VGS, but actually solve transactional and financial crime problems using security and privacy and tie those things together.
The last two things that I think are tremendously important is that people have to be infectious. They have to be able to sell their stock, whether it's to their employee or to an investor. There's some nuances and differences there, but it also comes from people who are empathetic and can rally their troops and know that they're going to have to weather storms together with the people they hire because not every company is up and to the right. In fact, you have to meet any company that has ever been up into the right consistently. I've seen this play out time and time again. A real-world example there is, I was partners with Ric Fulop at North Bridge a long time ago. He left the firm and started Desktop Metal where we're investors. Desktop Metal is a 3D metal printing company, and the company went public last year via SPAC. Ric is still positive and optimistic and is able to imbue that optimism in everyone in his company so that they don't lose faith and hope of their mission despite what the public markets may or may not be valuing the company today.
The last thing is really just diversity and diverse abilities. It's great to have a team of people who all come out of one set of shared experiences, but that tends to mean that there's actually more blind spots in those teams than teams where they have diverse backgrounds and diverse abilities, whether that's geographic diversity or company backgrounds or upbringing and education backgrounds. All those things contribute to building a stronger, bigger, better vision for a company rather than, "Hey, we're four people that have all worked together for two decades, and we're just going to go and do this thing because we had this problem." That might be the kernel, but I want to then see how that kernel can develop and change and take new forms by adding thoughts and ideas from outside of that nucleus.
Gopi Rangan: You've clearly outlined the list of characteristics that you appreciate and you'd like to see in entrepreneurs. One specific thing that I'm really curious to understand a little more is you mentioned super stubborn. I understand founders need to be optimistic. But I'm curious to understand; why is that important for you and how stubborn can they be?
Jonathan Heiliger: Well, I'm a pretty stubborn person, so I think I need to work with other stubborn people, probably. When I was growing up, my dad said I was a donkey because I would just keep running into the wall rather than looking for a way around it. I work with entrepreneurs who are the clever types, who are constantly looking and finding shortcuts and ways around things. But for most entrepreneurs, there's an element of, "Hey, I'm willing to grind because it's not easy. It's actually more interesting." That's why I admire that trait and respect that trait a whole lot more than someone who's like, "hey, I tried this thing and it worked and I captured lightning" and then that then gave them the confidence to try two more things, and two more things. I'm not sure that that person learns about the why as much as the person who's grinding away at whether it's solving a problem or hiring somebody or iterating on sales contract - whatever the sort of challenge in front of them is. That's not to say that I want to work with people who are steadfast and don't take feedback and don't learn from their mistakes. That's not it at all. The whole point is that they're stubborn and they're curious, and that they are learning as they're doing and iterating.
Gopi Rangan: Oh! This is fascinating. You've given many specific examples of startups, founders, and how they exhibited certain characteristics. I see where the need for stubbornness comes from. It comes from the place of optimism. They definitely learn from feedback. That quality of relentless perseverance is what differentiates some of the most successful entrepreneurs compared to others. And that's, I think, what you're alluding to.
Jonathan Heiliger: Yeah. Exactly. It's the relentless pursuit.
Gopi Rangan: I want to come back to your view on the market in general. A lot of things have changed in venture capital over the years. You've been an entrepreneur. You've been a technology executive. You commercialized the internet. You saw a billion people use Facebook as a platform. And you've been actively investing and serving on boards of companies. Through this experience, if you were to change one thing about the venture capital industry, what would you change to make it better?
Jonathan Heiliger: That's a good question. While I'm thinking about it, where would you start with that, Gopi?
Gopi Rangan: I have a lot of things. The topic that comes up most often in my conversations is diversity. I think the Michael Moritz's of the world were great in building the industry, but I think as the leaders of the industry, they have failed in building diversity into the ecosystem. I would like to change that not only because it's nice to do, and we need to give opportunities to other people, but I think it makes business sense. We're ignoring a big chunk of opportunities where we can build profitable businesses, iconic companies for the long-term that really have an impact on people's lives, and these can be extremely lucrative for an investment as well. We're not doing that because we're only looking at certain types of patterns that we are used to. We stay with those patterns. We can bring different kinds of entrepreneurs, different kinds of investors into the industry. I think we'll unleash much more potential with this technology leverage.
Jonathan Heiliger: Yeah, I agree with you. There's not enough diversity in technology in particular. Venture capital is a small part of that. And I think that to some degree, it starts with the venture side of how companies form and get started in those communities in those networks.
One of the things that we did a couple of years ago, is we started a community action group called VC OpenDoor, because I was tired of everyone looking for a warm intro as a way to meet a VC. So, I asked people, "Hey, would you just give a Calendly link or some other way of making yourself available for office hours, for people who don't have a warm intro?"
This group has been running for about two years. I think we're closing in on 200 investors who've said, "Hey, I'm willing to meet people. Here's a link to my calendar and a form to fill out to get time for a meeting". There've been about 450 connections made. Completely no warm intros, nothing like that, and dollars have actually been commited on the back of this 450 meetings - a couple million dollars. So, the numbers are small, but it's a good start from where we were a couple of years ago where it literally was "here's a form on a website or get a warm intro out to people."
One of the biggest challenges is there's a sort of matchmaking that needs to happen between the founder or founders and who's going to be a good fit for them. Honestly, Gopi, that's where we as partners spend a lot of time with our portfolio companies, as they go on to raise whatever the next round of capital is. And we're talking to founders about, "Hey, it's not just about the venture firm, but it's the partner at the firm. Are they hot on your business market or are they cool on your business market? Do they have time? Do they not have time? Have they made other recent relevant or adjacent investments?" There's been a few people who've attempted to categorize all of this data, but one of the challenges of early-stage investing is we are often very wrong with the direction that companies take and businesses take. I might say that one day I'm a cybersecurity investor, and then I look back a year or two years later and I realize that I'm actually not a cyber security investor, and that I've invested actually in different vertical FinTech businesses or something like that because the businesses have sort of pivoted and waxed and waned into that field.
That matchmaking problem is something I think a lot about solving and I do think that the incubators and Y Combinator in particular has probably done the best job of that, given the sort of cohort structure and the openness to which they have made the application process and their own vetting process.
Gopi Rangan: You've shared some deeply thoughtful ideas on how to improve venture capital as it exists today. And I see that you're actively involved in building that community.
I usually ask my last question about: what are you passionate about in community development? I see that with VC OpenDoor, the mission is to pledge time to support entrepreneurs from underprivileged backgrounds so we can bring more diversity into the ecosystem.
Thank you so much for sharing your stories. Thank you for sharing your nuggets of wisdom. I look forward to sharing them with the world.
Jonathan Heiliger: It's my pleasure. Thanks. This was fun.
Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoy listening to real-life stories about early believers supporting ambitious entrepreneurs.
Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast. I look forward to catching you at the next episode.