No. Absolutely. I mean, what I would say on that is I was very fortunate of so Howard was big on into the work from home. Mhmm. And so and also what I wanted to say, so he's got a 25 angel, you know, investing career with David Heeman, a part of Underdog Labs, right, which we're an anchor LPN, which I think I shared with you. I can kind of get into Underdog later.
To the point of he was kind of early in on the work from home and so he created this, him and David, a company called Flexjobs with Sarah. Welcome to The Investor, a podcast where I, Joel Palofinkle, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights.
Okay, looks like we're live. So I'm excited for my guest today, Peter. I've gotten to know him for the last, probably a year now. We're both New Yorkers, both investing through our families, investing in different asset classes. So always excited to get to know another fellow investor. Peter, so just as an intro for the community, you know, Peter Love, he he's part of his family office.
They've done a lot of venture and private markets investing both into funds and to direct deals and from from, you know, learning about his family a little bit. Believe it was your father that kind of had a really strong track record in the past in the venture and tech ecosystem. So why don't we have you double down on your family's history, your background and some of your experiences investing in tech. Then I'll just jump in with some questions and some conversations. Absolutely.
No, and thank you so much for having Joel. You said, it's been great getting to know you over the past year. Yeah, kind of some background on family history is, come from a background of my great grandpa was the CEO of Chrysler and then my grandfather after that was the CEO of Grand National Steel, National Steel. And then my father, I think from that ended up wanting to do maybe more management, then also more of the startup side.
But there's come from a family where feel like you wanna put your best foot forward, right? And also a good family of, we go to the Adirondacks and everything and so we're very close. So I'm very excited. We're about to spend July 4 together. But yeah, and so And then a little bit kind of on my father's background specifically and kind of how the family office was started.
And so he went to college, he went to Colgate, necessarily maybe wasn't focusing as much time on the studies, but was interested in the stock market and other areas like that. And so he started to with one of his friends at the time, Cliff Roboto. And so they got very interested in stocks and started trading it and created this club. Then also then started to create these tools for investing in stocks. And so then they thought to themselves, Why don't we just go make this for Wall Street?
A lot of it was around the charting and the technical analysis. And so yeah, they were able to kind of build that out. And then new company in the 90s called Rogue Wave that was also big into the software development space. And so they ended up getting bought out by Rogue Wave which ended up going public in the 90s. And then, yeah, after that, he kind of created Love to Know Media, which is a portfolio of websites. So love to know, yourdictionary.com, Golf Link.
And so yeah, I think back when he was kind of in college right in the 80s and kind of 90s at that time, everyone was kind of going into Wall Street right into banking and everything, especially right in New York. So he says that was kind of an outlier among his friend groups and a lot of people thinking themselves, what are you doing going into the startup space and all that. Obviously much more popular nowadays. But yeah, also right thirty years ago the startup space not what it is today.
And so a lot more people questioning. Yeah, mean, and then my background also. So I started my career at PitchBook. So from Northern California, I played soccer at the University of Rochester. I get a lot of questions, why'd you go from Northern California to Rochester? I asked myself that the same, a couple of times when I was at Rochester, the same question. And so it was good.
Played soccer there, got a great education, developed a lot of great friendships that I still keep in touch with today and it's great being in New York. And then definitely though wanted to go back to San Francisco, especially with those cold winters and being from Northern California, wasn't used to those. So I went back to San Francisco. And yeah, wanted to I think probably junior or senior year of college, I think I wanted to get into sales.
I've always been a social person, enjoy conversations like these. But I enjoy tough conversations sometimes and then also making the deal and stuff. I didn't that's kinda what I formulated then and was able to find PitchBook, which was an incredible place to start my career. You know, would absolutely suggest it for anyone. Great company. And so I went through went by Starsos. To the SDR. Right?
And so you also really just get a good sense of a sales of, like, a good competent, right, well run sales structure from the SDRs to, okay, how do you book meetings, you know, the intermediaries of cold calling. Right? So we got accounts, you know, the the the should be accounts and, you know, you just cold call them and that definitely, you know, put some hair on your chest and good experience. Right? And yeah. And it was good.
And then ultimately, right, going to the AE role and closing deals there. But I I think Pitchfork just got me really interested in the capital markets. I didn't necessarily, you know, know that I would be interested in venture and startups. Actually, the advice that I got from my father was to not go into startups. Sure. It's like What did what did he want you to do? Did he want you to just kinda get into high finance and for foreign investment firms?
He he wanted me he's know, he wanted me to do something that I was interested in, but, yeah, he did one of his advices was don't, maybe do what I did, which is startups. Especially he's always done very early stage kind of pre seed and everything. But no, he's been extremely supportive and everything. Of find and I think he was also in kind of the same mindset of he's like, I think you do decent in sales. So yeah, I was able to find PitchBook there.
But really then started to have these cool conversations with venture GPs and investment bankers and managing partners and private equity GPs and principals and just really smart, established, well off. And then you try to sell them a product and things get more difficult from there and stuff. But having early on in my career just got me really interested in, you know, the technology.
If you talk to some of these VCs and the investments that they're making, you know, at the forefront of the technology, and I think that got me really interested. And so yeah. And then basically wanted to get into startups but then didn't maybe wanna necessarily like also had this opportunity right of the family office that kind of towards my time at the end of PitchBook.
My father, I think, was interested in me kind of joining for, you know, on you know, we're not massive operations, Joel, you know, like not massive. And with the lack of distributions that was going on, right Mhmm. And exits, right, we definitely were getting very particular right on the funds that we were committing to and definitely felt like that well, he felt that he wanted to replace some of those funds. Right? So then I came on.
I probably sourced forty, sixty funds for us last year, which is great experience. And then, yeah, ended up what ended up finding a a startup called called Stan that was kind of like AI, you know, it was VC investment. I don't know. I wish I can technically say whatever on that. But then ended up going to Edda, and so now I'm at a startup that was spun out of FJ Labs.
And so I say, you know, like there's deal flow, there's portfolio management tools, there's LP, there's contact ratio management tools. And so Edda, similar to PitchBook, right, of in the capital market space, you know, is a place where you can keep track of your deal flow, portfolio management, but also your CRM. And then we have AI capabilities around a pitch deck reader, a cap table reader, due diligence writer.
So if you ever you know, I always say, like, for people who use Affinity, it's like Affinity with a portfolio management tool and AI capabilities. And so if anyone's ever interested, definitely let me know. But it's been it's been cool. It's been a cool journey kind of over the last four years entering the job market and seeing what real life is like. Yeah, no, absolutely. So couple things just zooming out. We've had a handful of next gen families on our show.
And, you know, what's interesting is like there was a guy that came on last week and he was like, look, you know, I both of my parents were were entrepreneurs. Like my wife owned a fabric business. My father owned, I think some type of, I think he owned like a bunch of Arby's. Know, the fast food sandwich shop and roast beef. So I think they owned a couple of those. So he, you know, at the age of like seven years old, you know, they were talking about P and L and and businesses.
So, walk me through kind of like your childhood. Yeah. You know, having a father that was an entrepreneur and you know, kind of the the conversations that were going on in the dinner table and how that influence your your sales ability and and just kinda Yeah. Maybe the ups and downs of that or whatever you're allowed to share. No. Absolutely. I mean, what I would say on that is I was very fortunate of so Howard was big on into the work from home.
Also what I wanted to say, he's got a 25 angel investing career with David Heeman, a part of Underdog Labs, right, which we're an anchor LPN, which I think I shared with you. I can get into Underdog later. But to the point of he was kind of early in on the work from home and so he created this, him and David, a company called Flexjobs with Sarah That was a business that your father incubated, Flexjobs? Yeah, Exactly, Flexjobs and then was able to exit.
This was probably fifteen years ago on the work from home so very early into that space and so I was able to have a good exit on that. To the point of was fortunate of he was around, he'd be in his office a lot and stuff. Our dinner conversations were very like, What did you do today? What was a good thing? What was a bad thing? We did a high, we did a low. Oh, wow. Was like an investor update every night of year almost. It was great.
To get insightful insights from him, but then also I'd say to your point of hearing about venture and then also love to know media, right? But it's cool to hear about some of the early stage startups. For example, I would always hear about this company called Hotel Tonight. He would always give me updates on companies like that. And, you know, we're one of the first checks, you know, into Hotel Tonight. It was actually second time founder Sam Shane that we came back.
But to the point of Hotel Tonight and it just you hear about it throughout, you know, and it's it's cool. So then it gets this big exit, you know, to Airbnb. So I'd say, you know, it was cool to get updates, you know, about these companies. And, I've heard a lot about the media space, and I'd say we've also been big into consumer tech, OpenTable, Trulia as well.
And then how that correlates I'd say to sales is I'd say for that of my siblings My sister by the way has a company called Nori, which is the handheld ironing. So they're nationwide in Target, so it's for stealing your Oh wow. Yeah, if you've come across them.
And then my brother, just having the brother relationship that we did, I'd say we all are still competitive also in terms of today of Obviously we are so supportive of each other and all that, but I'd say probably just the great relationships that I have with my siblings from growing up, but then also really driving each other. I'd say, for example, when I see my sister, they get into Nationwide at Target, that's so great for me and that just makes me want to do those types of great things.
So I'd say it was very fortunate kind of upbringing of Howard being early on the work from home and flex jobs. Then I'd attribute of I've got great siblings and I think we do a good job of not even directly pushing each other, but yeah.
Yeah and I'd say the competitive, I mean, look, entrepreneurship and business is a sport you know, you are proud of your siblings for all the success they've had but when you're like, man, she's in like a thousand stores, maybe I should too, you know, and it kinda drives you. It's kinda you're fueling force. Sure. It kinda plays off each other too, you know? So I think that definitely I resonates with me. I always say I'm just trying to keep up with Annabelle.
That's why said How does your father how did how did you see your father start a business? So he started the the fintech analytics company probably before that was a thing right before PitchBook was probably around. And, there's a couple of parallels, Peter, that I think we spoke about. So I think I told you, I shared with you that I had a stint in fintech. I worked for one of the biggest fintech data analytics companies for private and public markets.
Yeah. So my job was like doing product, right? So I had to really think about like screen We're doing mobile. So like really thinking through like, you know, if you're looking at a chart, you know, you want to pinch and zoom, right? But like maybe the pinching and zooming is with two fingers on an iPad. Right? So we had to, like, really, really, like, nerd out on, like, form factors. And then, you know, I had a brief stint in the media space.
So I was a, you know, product, you know, project manager for some of the, you know, media brands in in New So it sounds like the trajectory of your father was kind of So it was the FinTech company, then he launched FlexJobs and then Love to Know is really kind of the recent venture. Is that the three ventures that he's built? Yeah, so I'd say like they love to know media as like a portfolio of websites. And so a couple of companies actually, it's actually headquartered in Spain.
And so when I was in Barcelona, I did a little work for them on kind of like the Google SEO side. And so a lot of it is just trying to gain traction and then selling advertisement space. That was kind of like the love to know media. But then yeah, he kind of had then he started to do 100 direct investments. But to the point of when he did do an investment, was very interested in being hands on and helping out, right?
Because thinking if I am going to commit money, wanna help out and do it the right way to the point of we've slowed a little bit on directs just because he's like, hey, I'm gonna be maybe potentially 75, 80 by the time I start to see returns. I'm like, please don't say that and all that.
But no, think what was the to the point of, was it was a question on like starting companies of like how do you get like, you know, he start, know, so I guess does he, I'm assuming, know, you kind of think about the problem statement and then from there maybe get some feedback. I mean, so have you seen kind of a pattern because your sister's also built a product And my wife actually would love to get your feedback on this live from everybody too.
But like my wife and I kind of came up with like a hardware concept, like a hardware device that we could jam on in a few, but like, just curious how your family just goes out to launch and then obviously focuses on revenue and growth. My dad actually wrote a full book called The J Curve. Oh wow. Yeah let me share it in here. It'll be great. And so he basically lays it out right of, he's basically got the six basically main parts which is the create.
So you know just creating the value, getting the idea out there and then releasing it. And then I think that's kind of where and one of our winners, we always kind of talk about Tenor, which is one of my buddies is kind of a poster child you know of morphing and releasing, right? But then after releasing morphing and finding good product market fit and not just trying to push and scale without finding product market fit. And so I think that's definitely something that Howard emphasizes, right?
As you know, don't be afraid to pivot. Really find good product market fit before you try to And then to the point of before you scale, and this is kind of the fourth one of model, Right? And so then really get your business model together once you found product market fit. And then, yeah, go and scale. And then the last is harvest. And so, yeah, he's released a full book. I've read it a couple times.
I'd highly suggest go reading it because yeah, he's got his life's work, stories from that, Flexjobs, some other ones. And so yeah, that's what I would say kind of. Yeah. Went ahead and posted it there so everybody has it also.
Yeah. What are some of the learnings that you've learned with you and maybe obviously hearing it from your father at the dinner table in terms of maybe some of the challenges with flex jobs, with the fintech space, and now with with media or not even challenges, maybe just learnings because those are different businesses. Yeah. That have different nuances.
Yeah. That's and I think that's probably one of the biggest ones is just that's why I'd say so there's tenor and then there was a lot of the books and kind of like the examples are companies, you know, that maybe thought, you know, that or maybe they weren't finding any product market fit at all. Yeah. And then they end up, you know, finding it through morphing. Like for example, Tenor, I think, started as college payments processing. Then from that it went to sales enablement, you know.
And then from that now it's fine. It's found its place basically in healthcare workflow and automating, you know, the patient referral system. Right? And so basically morphing through that. But then also right you know of picking good founders and what does that look like also. And so you know second time founders we think second time founders are great right. You know people that maybe didn't, you know, have a massive big first exit, you know, and then now they're starting their second company.
We've definitely found success through that. Then I mean, like what what we look for kind of when we do go about making, you know, the investments because we do the pre seed angel, you know, is the founder, you know, and, you know, are they do they you know, are they hustling? Are they doing the proper research? You know, are they are they generating sales themselves? You know, are they are they not scaling too quickly?
Like for, you know, the companies that are just hiring, you know, there's an example in the book of, you know, thinking that you found product market fit and then trying to scale and then realizing that you didn't and then kind of having to go back there. Yeah. And that's how I'd say, like, on the direct investment side. And then also I can kind of, like, elaborate, you know, on how we view fund investments as well. But yeah.
Mhmm. Yeah. No. I'd love to have a breakdown because I think this is helpful for other LPs too. Like, walk me through your process of Yeah. Sourcing and screening funds and then kind of like the process of like maybe diligence and getting them over the line. And, you know, as you know, we're one of the biggest platforms and accelerators for fund managers. So we see so many of them and many of them have similar strategies. Many of them are all great people too. Right?
And there's a limited amount of capital to deploy very similar to a direct strategy as well. So we'd love to know kind of some of the thoughts around how you're looking at managers to invest in. Yeah. I could take and then also, like, I think you asked on some stuff on how to maybe potentially differentiate. And so I'll first start one. So, yeah, we started committing to funds kind of in the early two thousands.
Some of them worked out like Madrona, some of them did not that I came in and replaced. But what we look for is strong track record, whether that's you were a GP at another firm or whether you have a strong angel track record. And then also kind of going on that too of if it's a five person firm and maybe they're on their fourth or fifth fund, are those people that you know had the drove those early funds you know with high RRRs, are they still on the team? Right?
Mhmm. On the fourth and fifth fund. So are the people that were picking those initial winners, are they still out the fund? And then I'd also say point for you guys too, I guess, to to address that. Are you are you betting on emerging fan I'm biased. Managers? Yeah. Do you do you guys like fun ones, or do you prefer to kinda come in at, fun two or fun three, to to that point?
What's interesting guys, if you look at kind of some of those early funds, right, especially maybe the micro, you know, $25,000,000 funds, right? Those can yield some 30, you know, high 30% IRRs. Probably a 5X multiple at that size, right? It's much easier than like 100 or $300,000,000 fund to get that multiple.
So most people I would say, and I'm assuming you guys are seeing that too, like, you just proportionally, you can just directionally have a higher multiple just because the fund is smaller. Right? So That's just denominator effect, right, of whatever the fund is. And so having to return a certain amount. Right? And if the fund size is only 2,000,000 and you return, you know, 10,000,000 or whatever plus. But then also I think it's really interesting. Right?
And, you know, there's been some podcasts. Right? Like BG two, Bill Gurley, Brad Gershuner. I love that podcast. I kinda talk about it of, you know, kind of this dynamic that's kind of started to maybe creep in of larger fund size. Right? And then going for the management fees kind of rather and these mega funds. Right? Like billion plus. Right? All that maybe being instead well, not instead of maybe.
Instead of, you know, they should be focused on picking the best companies, right, and focused on the interest, right, and creating the best interest and making money there. You know? And we've had con you know, you've had conversations, you know, with some of these mega funds too. Right? And, they're doing whatever and they're doing decently, but to the point of maybe if they cut their fund size, whatever, couple 100,000,000, their fund returns are even bigger.
And so why people still love to raise these mega funds and all that. We get it too. It's like the management fees, Yeah. Mean, to your point, they're in the business of asset gathering. So once they're at like a billion in assets, the actual business is really just raising assets and the performance usually is pretty mediocre.
But like those LPs at that scale, they're not looking for like a five X. They're looking for maybe a 10% like the same the same returns that they would get investing in maybe some type of indexed product and they want they're investing in the brand. Right. So like Bridgewater is not most likely again, I don't have the data. Right. But like they're not five X ing their their entire fund or they're not delivering, you know, above average, I'm assuming performance.
It's the marketing and the brand that people and the and the reliability of the brand that I think people are just putting their money with. Yeah. You know, and I think we also talk about what were you saying? No. I was just gonna say, I would say, you know, alternatively, these these younger, smaller managers, they, they have to outperform to survive, right, to actually just stay relevant and hopefully get a fund.
They have to hustle like founders and and deliver those returns back to those LPs to get you know, to to have LPs share share their ideas with other LPs and get more people in. Yeah. No. Exactly. And so it's, you know, finding, finding those smaller ones, right? Because there's a lot of micro VC funds out there and stuff. And so that's when it also becomes important on track record and everything. To the point of look, well, we don't want to probably do a billion fund.
That's just not really in our wheelhouse. Probably, I don't know. Specifically, we're not gonna do billion, right? We do definitely first time funds to the point of what we just talked about of they can be some of the highest IRR returning funds. So also I'd say what we're also is we're looking towards private equity more, kind of right, with just the quicker horizon and getting money back quicker in the secondaries market.
I think it's good to see the venture IPO and M and A space heat up a little bit. And I think it's overall good signs for the VC space. But we've also definitely kind of gotten more interested in private equity. Look, we've evolved now to also, I was kind of brought on to diversify, right? And we always say we were purposely heavily allocated right to pre seed funds. That's kind of how wealth was generated and everything.
So I kind of came on and so got more series A, series B growth, some healthcare that we were probably lacking on, some private equity exposure. Secondaries fund. Obviously secondaries place has done well recently. Even venture debt, we've looked at oil and gas funds. And so it is kind of cool in terms of the stuff we get to see. Right?
And then Mhmm. Also I I definitely wanna mention, right, that there's over, you know, the 50%, you know, quasi like single family office hedge fund towards the public equities and the stocks. And so the three people of us are Howard, Matthew, Larsen. Right? We worked at Baird for ten, fifteen years. He's extremely smart, one of the smartest people I know. And so it's kind of the three of us.
And so it's cool of just the terms of what we get to see from the funds, but then also on the public equity side. I think like Cotu, Altimeter, I'm just more saying they're connected and I think there's definitely parallels to be drawn, right, from the public and the private markets. And so it's really cool and I've really enjoyed joining the family. It's basically been like a year and a half now.
I joined last year and I've just having these conversations with these really smart people and hearing what do they think is going on. And a lot of people are becoming bullish, right? Especially if they're in fundraising mode. But there is evidence to back that. I don't know. Think it's a really also I think you hear a lot of investors and people talk about this AI super cycle, right, and the hype. And we could be going into a good wave here. So I don't know.
And it would be interesting also in terms of how you think where we potentially might be going and what you make of some of IPOs and some of the IPOs. The VC backed IPOs doing decently though well and they're performing better. Yep. I'm taking a couple of notes here. Let's break this out into maybe first time funds, what you look for. And then I would say probably I think you gave a good point beyond Fund one, what the team seems things like the team members.
Would say also like beyond Fund one, it's looking at their infrastructure, like who's doing their admin? Are they actually or does it make sense to do audits at this point? Right. So maybe rapid fire a couple of pieces. I think for emerging managers, even if it's an Angel track record, you could develop some type of synthetic track record stitching together some type of IRR right over like the last 10 companies. Let's say you did like 25 to 50 ks checks as an Angel. Yeah, we've seen that.
Yeah. So there's some synthetic thing that you could probably put together. Maybe talk to like a fund, you know, CFO to help kind of organize that so it makes sense. It's not just like just like cobbled together, but like, know, maybe professionalize your angel track record so you can kind of show something that is in the form of like a pseudo fund 1.5. But like, what else are you looking for?
Maybe on the hard skills and the soft skills for emerging managers like fund ones and then maybe beyond fund ones coming into fund two. Are you looking for some DPI? Are you looking for some returns already in fund two? Are you okay, you know, realistically seeing that happen in fund three or four? Yeah. And so we also one thing that we definitely think about too is your ability to win deals. Right?
You know, people VC in theory, right, like you should be seeing a good amount of deal flow, you know, across the board. And so then it comes down to, right, how are you winning those deals? Whether that's your track record, maybe it's your expertise. Right? Mhmm. You know, show us show us, right, like a competitive deal, you know, whatever a good company. Right?
That, you know, is whatever seems to be picking up some momentum that had a ton of interest, right, from other VC firms, you know, but for the whatever reason it was, right, why were you able to win that deal? And for example, like if we can if we hear, right, you know, a good investment, right, and they got in on it and they're telling us how we got it they got into us, that's great. Mhmm. I also would say something interesting. So have you ever read Never Split The Difference, Chris Williams?
Yeah. That's a good that's a good book. Really good book. So I would say I think it's got a really interesting point of I feel sometimes these VC fund managers, they try to get to the next yes, right? They're asking me these questions, right? And everything. They're like, Does that sound good? And you're kind of like, Yeah. The point of what the book talks about is you're kind of just saying yes to say yes to whatever, like not disagree or whatever.
And so I would say ask almost like and get past surface level, ask some maybe deeper questions to get to, Well, no, that's actually not how we think about it, right? Because I feel this is also from doing sales at Edo right? And PitchBook and everything. You know you hear some people and they try to get to the next yes, the next yes, and then they're just disingenuous kind of yeses.
And so it's asking like a tough question or whatever or maybe, yeah, we can't, you know, that or maybe maybe that's something that we can't help out with, you know, or like getting to a point of disagreement. Right? I don't know because I just I don't know if you feel this as well, Joel, but I feel like sometimes you get on a call with these fund managers and they're asking these questions and, you know, they're clearly just trying to get you to say yes sometimes. Right?
Of like, oh, does this sound good? And you're like, yeah. Maybe in theory. Yeah. But, you know, maybe get past surface level to also make a deeper connection to the point of these are relationships. Yeah. Right? No, I get it. So that's actually been a piece of feedback I heard from a manager a couple of weeks ago. I mean, they go to these events and it's very surface level relationships. You know, kind of just, hey, you know, let me know what you're allocating to these days.
Then it kind of ends there versus asking about someone's family or asking kind of a little more about what they're interested in or maybe making a connection. Right. I think there's a huge currency that someone can have if like, look, you're interested in private equity. You're also, you know, looking at other asset classes. Maybe there's a really interesting private equity manager that would be good for you to talk to.
And like, you know, you're the one that kind of facilitated that you built some goodwill doing that, but also just learning more deeper. Like, what what is the LP actually looking for? I think that definitely helps. Yeah. Or to even maybe, like, talk about a loss. Like, talk about a loss and how you learn from that, you know, that led you to, you know, then making a good decision like that.
Mhmm. And to the point of don't hide things in the deck, whatever if you're on your third fund and whatever, your first fund didn't have a great IRR, just tell us why. Don't hide it. It's like if you hide things, you know, obviously we're looking for IRR, DPI, you know, all metrics like that. And so if you don't include those in the deck, then it's gonna be one of our first questions. Mhmm. And especially then if you dodge around it, then that does not do much for building rapport.
In fact, probably does a little bit of the opposite. Yeah. So for fun one, as a recap, obviously some type of synthetic angel track record, the ability to win deals, ability to get super competitive. I think in terms of connection building, like these early investors are probably going to be mostly angels or high net worth individuals. So you really like having someone really just invest in you. And that comes from deeper connections and maybe just opening up about loss.
Anything else on like just first time fund ones that are like angels now trying to launch their first one. What else have you looked at or what's gotten you over the line for fun? Those type of fun one. Day one debut funds. Yeah. And I think it's also right. Assuming all the people are in venture, do really do like it and everything and what they're doing.
I would also say some GPs come across a little more excited and genuine and they're like, Hey, this is It just seems like they're very excited. I feel like as cliche and as cheesy it can sound sometimes, we like that. Maybe that's because we're a little cheesy, whatever, like family office. We like that kind of energy and stuff. Maybe that doesn't play as well with an institution, right? An LP or endowment, right? But for us, if you're just super bubbly, And you're telling us why you love it.
Yeah, then I'd also this is also a little bit old fashioned, but you know, show up with a button down or a collared shirt. Know, if you're gonna I'm kind of the same way like for sales, right? Like if I'm gonna ask someone for money, like I'm gonna put on a collared shirt, I'm gonna put on a button down. Nothing crazy, right? But I'm not gonna show up in like a white t shirt, you know?
And with, with, with, you know, I'm just like in my bed or whatever and in, in, in a room, in a dark room and you know, you're asking for money and stuff and it's, I don't think that's a good way to go about it. Yeah. No, it's first impressions and I think some of those old school things that you learn from how to win friends and influence people still are relevant. Remember somebody's name, shake someone's hand, send a thank you email. Mean, have a friend- 100%.
I have a friend that's old school that mails thank you cards and, like, this this friend of mine has known me for a long time, so he doesn't even need to send me a thank you card because he does. We're we're on that level where we've just known each other for a long time, but he's still old school. He still still does it, that goes far because most people don't do it. They're lazy. You know? Yeah. No. A 100%. And I guess also I'd say is probably reserve, you know, some follow ons.
You know, we whether that's like 30 or whatever, I don't know, you maybe don't have to do 40, but something around 30%, right? And I don't know if you feel this way as well Joel, but we feel that especially if you're doing whatever pre seed seed angel, you should be able to double down on your winners. Right? Like you should be in, you know, close enough contact and, you know, have the, you know, just just just have the intuitiveness or whatever to then go and double down on something.
I don't know. That that's something No. I totally get it. I think it all depends on if you have a concentrate like, if you've if you're, like, a high conviction, like, deep tech concentrated fund with, 12 investments, then I would say those funds I've seen have had over 50% in follow ons. And then the funds that are a little more diversified have like 25 to 30 companies. They're probably around the 30 to 35, even maybe even 40% range.
But I've seen a higher conviction with and a higher follow on because they have so much conviction and they have to so they can just double down. So some of them are like lead only funds that are doing 12 deals and they're really, really betting on this company, blowing it out of the park and possibly returning the fun. And you have the bandwidth to do that with like a smaller fund. And I'm assuming like some of the KPIs would at fun one is probably like MoIC TVPI.
There's probably no IRR yet, right? Like any other metrics that you look at? I mean, we look for markups, right? That are companies that have actually gone through the financing round. Yep. Not some of these hypothetical markups that you sometimes hear of. But yeah, I'd say we definitely look for companies that are going under markups. Yeah, for example, Underdog, we like to see some of their investments. So like Tenor, right, they got in at Preseed. Mhmm. They just raised at a 620,000,000 post.
Mhmm. Then your first check into that, Underdog Labs. Code Metal, they just raised 52 out of 52,000,000 post after 12,000,000 post. And so those are kind of also the stuff that we look for. And then beyond fund one, what are maybe a couple soft skills or attributes versus technical KPIs that you're looking for in terms of performance? I mean, obviously, fund two might not even have DPI, But beyond DPI, anything else that you're, you know, kinda zeroing in on beyond fund one?
Like, maybe fund two, fund three? For sure. Yeah. I think, like, I well, one thing we look for is just kind of consistencies, whether that's, like, fund size, And then whether that at the stage too, right? So if you're a 30,000,000 whatever deep tech AI play fund, and then maybe you do 40 in your second fund. But then you go to like 200 in fund three, it's just a different strategy. Right?
In terms of and especially if the people go, oh yeah, we did kind of some of the pre seed seed, now we kind of want to do more series A. You know we both like series A, there's a reason kind of why some people choose either or or whatever pre seed angel. You know and so I'd say being consistent kind of with your strategy of what have you had success with? What we would like to hear probably is rinse and repeat.
We sometimes say that is, Hey, the strategy here is we're going to raise maybe 20,000,000 more because we missed out on some, right, because our deal flow is so good. Yeah. Yeah. Because it's a huge risk. Right? I mean, because if you're jumping from 40 to 200, there's the uncertainty if you can close that money. Then also on top of it, you're gonna have to there's additional expenses on your income statement and your P and L for like hiring more staff to deploy that.
So there's some uncertainty in terms of like, can you hire the right people to deploy at the same rate and still deliver the same type of performance. And then, you know, it's just the whole portfolio construction gets thrown off too because you're projecting out different types of returns. It may not be what you bought into in the first fund. Yeah. And to your point of what you were saying is if you don't raise that, right?
So if you go from 40 to 200 and you're raising a $200,000,000 fund, you only get to 80 and you've made some initial investments, right? Investing like you think you're going to invest at a 200,000,000, then you just have a bunch of highly concentrated positions, which is an extremely risky way to go about venture. Yeah. No. That's a good point. What are you interested in private equity? What sectors are you interested in?
You're looking at, like, some of the boring businesses or more Yeah, I don't know. We do come to some of the industrials kind of consumer. We love CPG. Don't know. So this is what we just did like Shore Capital Partners. They have very impressive track record. And that's someone who kind of came back too. Right? I think it's and this is kind of for LPs in general, kind of like for ourselves. Right?
Of it's an interesting and it's kind of tender where there's an opportunity, right, to get into some of those bigger funds maybe that you weren't able to get in previously. Mhmm. You know, is some of those private equity firms also they'll hire minimums. Right? Or I don't know. Maybe they wanna entertain pension endowments or whatever more. But yeah, we've you know, whether that's private equity, whether that's venture, you know, I don't know, maybe, you know, venture debt or whatever.
Mhmm. I think it's an interesting opportunity there. But then, yeah, I think on top what what was kind of the question of Just the industries that you Well, before they went all on a tangent. No. No. No. You're good. No. I think, you know, I think you covered it. I think industrials and there's a lot of these legacy businesses that are going. Yeah, there's a lot of these legacy businesses where the the yeah, the people can't really manage those businesses anymore.
So there's opportunity to kind of maybe do a roll up. And I'll tell you this, I'm seeing a lot of funds, especially at the mega fund level that are actually bolting on like a venture studio or even like a roll up strategy alongside their RIA. I think it was like Tribe Capital that pretty much set up a roll up strategy.
So I think there's a lot of these PE funds that like venture funds that are actually getting into we have crossover, but I think there's going be a new thing called growth equity PE where like you're in the growth equity stage, but there's probably a white space before the exit where there's maybe just buyout and that's bolted on as like a buyout strategy, makes sense.
And then especially if you're like a family office, you're already used to building a holding company with different companies that you've incubated. It makes sense to just have a M and A practice within your family office to just strategically buy different businesses that complement your business. If you're in the media space, maybe there's AI that can auto generate content that maybe you just buy that company that gets folded into Love to Know. I don't know.
I mean, I know that we're over time, but- It's fascinating. Yeah. So we could jam on that at some point too. But I guess give me one life lesson that you'd like to share with us maybe from a professional standpoint, maybe from a mentor or obviously from your father who's one of the best mentors. But leave us with one piece of wisdom.
Yeah, no, would say definitely and this is for me, I've been around probably four years and so this is probably for particular, maybe people starting a new job also, But entering it is just like don't be afraid to fail. Like go, I would say fail fast. Whether it's starting your career, whether it's a new job, It is totally applicable I think to the new job, right? But if you're in a new role, there's things you're supposed to go about. You you and me both know, we start new roles.
Like obviously in the first month, maybe like month and half, two months, you don't fully understand. I'm like what the heck is PitchBook in the first like month and a half of my But you need to start asking questions you know, and you need to figure out one what you're doing. You need to put yourself in difficult situations, difficult conversations right.
Calling people you know that maybe you wouldn't want to of you know of hounding this private equity guy who tells you you know to f off at the end. Which is that also you know gets you used to those nerves and the pressure and everything. But then what also I was gonna say is if you don't, you know, take things head on and you fail and you know then you are failing five or six months later, right, on something that's a pretty basic you know task, then that doesn't also look good.
And then also what I would say is, this is just kind of like sales and stuff, I'm just getting used to nerve of whatever makes you most nervous about your job, right? Whether maybe for me it's like a big call or whatever, and I would get so nervous at the beginning. It'd probably sound like I was about to shit my pants sometimes. Sure. But that comes across, right? And so you go over it. And I was fortunate.
I had two great mentors at Pitchcock that they're like, You sounded like you were about to shit your pants. And so to the point of it's it's getting used to those nerves and nothing is going to get you used to those nerves except putting you in that situation that's uncomfortable. No. I totally agree. Just facing your demons head on and then after a while, it just kinda becomes your routine. Yeah. A 100%.
Yeah, no. Mean, and then to the point of, okay, you take that call head on, you know, and then those nerves, you know, are a little bit, you know, they're not as much there because you had a good call and you build on that. And then I got I'd say this is from the David Goggins Can't Hurt Me book of the cookie jar. Of you know think about all of your and then as you know go through your career think about all the cool things that you've done right?
Mhmm. I think that's also something that sometimes like I don't do a good enough job of of, okay. This is what I've done. Here's are all the good things, you know, and then and then keep that like kind of cookie jar. And when you're about to go through a tough situation or whatever, reference all of those situations, you know, where you did something super tough and cool and overcame that. But I would say just try to like just take things head on and if you fail, you fail.
Because to the point of if you avoid situations of trying to fail, I don't think that's gonna I don't think that's gonna help you in the long term. Yeah. No. Absolutely. Well, hey, Peter. This is amazing. It was fun hanging out last night, and, we'll continue to do some more fun stuff in the city and hopefully in other cities. Yeah. No. I appreciate it.
Yeah. And just also quick quick plugs, Underdog Labs, BC fun, and then also I'm helping out Snazzy Beverages, which is a rated drink cocktail, different kind of, like, cocktails on the Arnold Palmer. And then also, Eda, if people are interested in that, let me know. But I really appreciate it, Joel. And definitely, you know, let's please keep letting me know of all the great Sun Capital events. And, yeah, look forward to also just continuing having these conversations and sharing deals.
Absolutely. All right. Thanks so much, Peter. Have a good day and everyone else with the community, thank you for tuning in. Thank you so much. Yep. All right. See you.