Investing in Startups

Gaurav Jain is the Cofounder and Managing Partner of Afore Capital. Afore is one of the OGs of institutional pre-seed investing and runs the largest dedicated pre-seed venture fund in the world. We talked about momentum as a moat, how vibe-coding effects pre-seed investing, and the importance of great product and distribution. Here's a longer breakdown…   Gaurav explains why momentum has become more durable than traditional moats, especially in a world where AI is making it easier to build products quickly. Instead of relying on old ideas of defensibility, he argues that the best startups create constant forward motion through product improvement, user pull, and rapid execution.   We talk about what Afore Capital looks for at the pre-seed stage, when there may be very little company built and not much data to evaluate. Gaurav shares how he thinks about backing founders early, what signals matter most before traction exists, and why team quality often matters more than a polished market narrative.   Gaurav also breaks down how AI is changing startup formation, from reducing the amount of capital needed to build a company to speeding up the path from idea to product and customer feedback. The conversation explores what this means for founders, investors, and the pace of competition in the earliest stages.   A big theme in the episode is distribution and founder-led selling. Gaurav talks about why distribution can’t be treated as an afterthought, why technical founders still need to learn how to get in front of customers, and how the best early companies pair strong product instincts with a clear path to demand.   Finally, we discuss how pre-seed investing has evolved over the last decade and what Gaurav has learned from helping define the category. He shares lessons on market size, founder selection, and why early-stage investing is often less about predicting categories and more about recognizing the people most capable of creating momentum from nothing.   Investing in Startups is produced by Seaplane Ventures and hosted by Joe Magyer. 

We're celebrating our recent 50th episode with a special conversation between host Joe Magyer and guest host Chris Hill of Money Unplugged. Chris interviews Joe about his lessons learned from the first 50 episodes, how AI is impacting startups and venture capital, what Joe has changed his mind about, and investing in startups, both the craft and the show. Joe and Chris also unpack how AI has reshaped venture in just two years—changing what it costs to start a company, how many people startups need to hire, how quickly they can build product, and why investors are again leaning into the category after a brutal post-2021 reset.   They revisit one of venture’s oldest debates: concentrated vs. diversified portfolios. Joe explains why some investors want as many shots on goal as possible, while others prefer to place fewer, higher-conviction bets so they can spend more time with founders and have a better chance of meaningful ownership in the winners. Another core tension in the episode is consensus vs. non-consensus investing. Joe talks through why the hottest deals often get hot for good reasons—great founders, fast growth, strong co-investors—but also why crowded rounds can compress returns and leave investors paying up for certainty that may already be priced in.   Finally, Joe also shares how hosting the podcast has changed his own investing style. Hearing other managers explain their frameworks pushed him to rethink rigid reserve strategies, become more flexible about follow-on investing, and focus more on doubling down when real conviction builds through direct founder relationships.   Investing in Startups is produced by Seaplane Ventures and (usually) hosted by Joe Magyer. 

We're excited to share this interview with Zal Bilimoria, founding partner at Refactor Capital, recorded live at the recent Future Titans emerging manager summit. Zal is a high-conviction, hard-tech investor and solo capitalist who manages more than $225 million. He has a fascinating career, from building products at Netflix and LinkedIn to being an early employee at a16z to later forming Refactor. We talked about why Zal is solo, what he learned from a16z, why he invests with conviction, how he built a robust firm without any employees supporting him, and how he managed to lead a Series D round despite his firm being a Seed expert. We also discussed:   Why Zal chose the solo GP path (on purpose): after seeing large-firm partnership dynamics at Andreessen Horowitz, he optimized for speed, autonomy, and founder time—especially important at seed where decision velocity matters. Refactor started as a two-GP fund with David Lee (ex–SV Angel), then David retired earlier than expected—forcing Zal to rebuild the LP base and prove the strategy could work with a single decision-maker.   A “right-sized” fund strategy as an operating system: Zal explains why he’s stayed around ~$50M per fund, targets ~20 companies per fund, and focuses on ~8–10% ownership at entry to keep the model manageable and return-capable. He actively tracks how many portfolio companies “graduate” (to Series A and beyond) each year so his board/support load stays sustainable without adding headcount.   Robustness for LPs (the “hit-by-a-bus” plan): Zal shares a concrete solo-GP risk mitigation tactic—he carries a life insurance policy payable to the management company so LPs have resources to recruit a successor or wind down assets without crushing fund performance.   Hard tech example that feels sci-fi (with real traction): Solugen. Zal recounts leading Solugen’s seed ~9 years ago and watching it scale into a large revenue business—then pivoting into a high-demand defense chemistry product with major government pull.   How a seed lead ends up leading a Series D: during the 2022 market reset, Zal had an SPV ready (~$20M) to secure pro rata; when no one wanted to “stick their neck out” as lead, he wrote the first term sheet—unlocking the round and attracting co-leads/followers.   Reserve strategy shift: he describes moving from ~50% reserves to ~20% reserves—preferring more “shots on goal” at pre-seed/seed, and noting how hard it is to consistently pick Series A winners even when top firms lead the round.   Investing in Startups is hosted by Joe Magyer, founder and managing partner of Seaplane Ventures.

Seth Levine is a Partner at Foundry Group, a longtime early-stage firm investing in both startups and emerging fund managers. We talked about the art of working with founders, short-term-ism, knowing your own competitive advantage, why AI will create more jobs than it disrupts, and the myth of overnight success. Here's the longer of what we covered:   Doing the real work with founders and GPs – Seth explains why his favorite part of Foundry is deep, collaborative problem-solving with CEOs and emerging managers, not formal board meetings, and why he sees himself as “in the influence game,” working for founders rather than controlling them.   Fund size is fund strategy – He walks through why Foundry chose not to become a perpetual, multi-generational platform, and how everything from check size to reserves, board work, and follow-on strategy has to flow from the true size and intent of the fund—not from chasing a bigger AUM number.   What LPs miss about emerging managers – Drawing on Foundry’s long history backing funds, Seth argues most LPs behave like asset allocators who over-weight pedigree, underwrite theses too superficially, and don’t dig hard enough into a GP’s real edge, philosophy, and personal “why” for running a firm.   Under-explored fund models he loves – Seth highlights niche yet powerful strategies: Arthur Ventures’ “under-the-radar” B2B SaaS approach, roll-ups of orphaned 2019–2020 vintage funds, and hybrid revenue-based vehicles that blend debt-style payback with equity upside for founders.   If he were starting fresh today – From a pure performance standpoint, he’d run a much more diversified early-stage book with lots of initial positions and minimal follow-ons—Taleb-inspired barbell thinking—and, in a wilder alternate life, maybe build a Series A or growth platform in Saudi Arabia to ride frontier-market upside.   Capital Evolution & fixing capitalism, not ditching it – Seth shares the origin story of his new book, his evolving view on when companies should (and shouldn’t) wade into politics, the shift from shareholder primacy toward broader stakeholders, and why medium- to long-term thinking and greater economic dynamism are essential.   AI, entrepreneurship, and why venture’s glamor is BS – He’s long-term bullish and short-term cautious on AI, seeing it as a huge unlock for productivity and entrepreneurship far beyond tech—but also a source of disruption that needs thoughtful retraining and policy.    Investing in Startups is hosted by Joe Magyer and produced by Seaplane Ventures.

Conor Brennan-Burke, co-founder of Hyperspell who explains AI agents and product vision, and Manu Ebert, co-founder focused on memory and context for agents. They unpack how agents act across tools, why context is the key bottleneck, real-world deployments from support to healthcare, adoption hurdles like fear and verification, and their YC founding persistence.

Courtney McCrea, Cofounder and Managing Partner of Recast Capital, backs and builds emerging venture managers. She discusses why backing early managers matters. She explains fundraising realities, how LPs should evaluate first-time funds, solo GP versus partnership risks, and practical diligence like targeted reference checks. She also covers pods for peer support and the hesitant pace of AI adoption among LPs.

Dan Teran is a Cofounder and Managing Partner of Gutter Capital. Gutter is an early-stage firm based out of New York focused on founders tackling the world’s toughest problems. We talked about why Gutter invests with conviction, why they seek out founders with unique insights rather than Gutter trying to dream up their own, and how AI can solve problems in the real world, not just online. We also dug into:   + Gutter’s core focus on vertical AI, vertical SaaS, and marketplaces tackling messy, real-world problems + Why Dan gravitates toward underestimated, “lived-experience” founders over polished, pedigreed profiles + Inside Elbow Grease, Gutter’s AI accelerator: structure, check size, and how they plan to keep backing winners + How Gutter turns talent into a product: embedded head of talent and heavy support on early hiring + The firm’s discipline on valuations, small fund sizes, and staying aligned with founders in a top-heavy market + Why Gutter insists on taking a board seat at seed and how that sets companies up for stronger Series As + Dan’s lessons from selling Managed by Q to WeWork and why founders should build acquirer relationships early + Two contrarian views: second-time founders are overrated, and the best founders do want real help from their investors   Investing in Startups is produced by Seaplane Ventures and hosted by Joe Magyer.  

Our guest this week is David Gardner, Cofounder of The Motley Fool. David is one of the best stock pickers of his generation. While for many investors a single 100X investment would be a career-defining win, David has earned a 100X return on 6 companies including Nvidia, Tesla, Amazon, and Netflix. We talked about breaking the rules of investing, optionality, valuation, letting winners run, and much more. David is one of the investors I’ve learned the most from over the years, so I really hope you enjoy this one.   Investing in Startups is produced by Seaplane Ventures and hosted by Seaplane Managing Partner Joe Magyer.

David Zhou is an investor in emerging managers, an angel investor, a blogger, and the host of the Superclusters podcast. We talked about how LPs can size up emerging managers, how VCs can stand out, portfolio construction, and which of sourcing, picking, and winning is the most important. We also explored:   + Why David thinks that “access beats picking (then winning)” for most emerging managers—and how check size changes that calculus.   + Follow-ons: when “all or none” makes sense, how signaling risk compounds past Series B, and why selling by Series C can be clean for seed managers.   + LP incentives in the wild: marks scrutiny for new managers vs. “ignorance is bliss” for existing ones—plus how TVPI vs. IRR targets shape decisions.   + The tough-love playbook behind “Dear Emerging Manager” and “Dear LP,” and why sloppy valuation methods and survivorship bias mislead GPs.   + Differentiation framework: sell the market → the strategy → then you; use “flaws, limitations, restrictions” to confront the elephants in the room.   + Fund design realities: reserve strategy, fund size vs. dilution (esp. in hard tech), and why some LP minimums are a built-in constraint.   + Context from fresh market data: median seed at ~$20M and AI capturing a huge share of early deals—what those trends mean for formation and pricing.   + Plus: Abe Othman’s follow-on finding (funds that never follow on beat always-follow funds 63% of the time) as a jumping-off point for David’s take.   Investing in Startups is a Seaplane Ventures production hosted by Joe Magyer.

We're trying something new with our first roundtable! Our guests are Sonia Nagar from SNAK Venture Partners and Colin Gardiner from Yonder Ventures. Sonia and Colin are both early-stage investors, friends of mine, and experts on marketplaces and network effects. We talked about AI’s role in marketplaces, why network effects aren’t more popular (even though they should be), how to make your own luck, what it’s really like to raise your first venture fund, and more. I hope you enjoy and thanks for listening.   Investing in Startups is produced by Seaplane Ventures.