Y Combinator companies arent attractive to other VCs with Anton Fedorov of Flashpoint VC

Summary

Anton, a laser physicist turned VC, shares his journey from studying physics to working in finance and trading stocks and bonds.This podcast episode with Anton Fedorov of Flashpoint VC is a goldmine of insights for first-time founders, from the challenges of launching a fund to the qualities he looks for in founders. Anton also discusses the risks and challenges of down rounds and messy cap tables. He highlights the significance of data-driven decision-making and the need for transparency during due diligence.

Takeaways

1. Articulating the size of the market is crucial for founders when pitching to investors.
2. The ability to hire and build a strong team is an important factor for investors.
3. Founder-market fit is becoming increasingly important in a saturated startup ecosystem.
4. Understanding the fund cycle and the stage at which a VC invests is important for founders when approaching investors.
5. Flashpoint VC offers different products like venture debt and growth debt to provide additional funding options for startups. Understand yourself and double down on your strengths
6. Invest in founders building global companies with potential for efficiency
7. Look for companies with built teams and revenue generation
Be cautious of down rounds and messy cap tables
8. Data-driven decision-making and transparency are crucial during due diligence

Chapters

00:00 Trailer
01:33 Anton Life Context
12:24 What value YC provides to VC company
14:18 Startup ecosystem needs more YC'S
15:40 According to VC'S founders make this mistake in pitch deck
20:45 Founders should be care about FUND CYCLE
31:26 Founder should be include this in pitch deck
38:11 What differentiate a founder from a CEO'S / Thoughts on hiring CFOs CMOS
42:05 Advice to founder who takes down rounder and liquidation.
45:07 Learn how you set cap tables
48:15 What's the least risky series
51:25 Investment decision process at flasho
56:56 Ritual
1:00:40 Ending

Connect with Mudassir

🎥 YouTube Channel - @prodcircleHQ
🐦 Twitter - https://twitter.com/ProdcircleHQ
📸 Instagram - https://instagram.com/prodcirclehq
💻 Website - https://prodcircle.com/
👥 Linkedin - https://www.linkedin.com/in/mudassir-mustafa/

Transcript

Mudassir (00:02.735)
So this is this causing the upload on both side. So we do not have a disturbance. Cool, hopefully it's gonna go pretty well. All right, cool. Please do a clap for me.

Mudassir (00:18.366)
Thank you. It helps us in syncing audio and video. It's a thing that we use in post-production. Okay, awesome. Rolling now. Hey Anton, welcome to the show. Super excited to have you. How are you doing today?

Anton (Flashpoint VC) (00:24.35)
Yeah, nice.

Anton (Flashpoint VC) (00:31.115)
All good, thanks for having me.

Mudassir (00:33.254)
My pleasure to have you here. Every single time I have anybody on the podcast, whoever that person is, I always start with one particular question, and that is, what is your story? Where do you come from? What's the context you have of your life? Let's start there.

Anton (Flashpoint VC) (00:48.686)
Sure, it's been a while. I'm actually a laser physicist by training. And so before I got into the VC world, I thought that just like my dad, I'm going to be studying physics and doing laser experiments. And I did that for a few years while I was in college. And

Mudassir (00:51.347)
Ha!

Anton (Flashpoint VC) (01:15.214)
By probably senior year, I kind of realized that I don't have to... I don't have what it takes to be a physicist. I'm not that passionate about science to really get laser focused on a specific problem. And it's not like two, three centuries ago where you could have been very generalist physicist. Today, you really have to be laser physics and I don't know.

whether that's crystals or ceramics or some other stuff. And so I kind of said, OK, now I'm going to go into finance. And basically, I picked up a CFA book, read through it in a course of a week. Basically, there was a job fairy at my university. And so like, EPMG was saying, OK, people who want to get into finance, this is a good path.

And so I said, yes, great. I don't know nothing about finance, but I read this book. And so I passed the interview and basically landed a job at KPMG in corporate finance. Did that for a year. You train in Excel as a laser physicist doing this research, et cetera. So I was pretty efficient in Excel. So I was good at corporate finance as well, because that's all you do, build models. And so after that.

Mudassir (02:30.82)
Mm-hmm.

Anton (Flashpoint VC) (02:40.754)
I got poached by a friend of mine who was already trading stocks and bonds. And so I joined him. I was one of the largest desk managers in Central Europe, mostly managing pension money. And so I got exposure into public markets relatively early in my career. And so you get to research a lot of the stocks and bonds. And that's you get macro, basically experience.

What are interest rates? Why are they important? And so what does Central Bank, what does it do? So you get basically macroeconomics, one-on-one on the job. And did that for a couple of years. And then we joined a high net worth individual who was basically launching his family office, starting to invest into private companies, basically through that.

gig, I got exposed into private markets. And then I saw there was flow coming into Europe already in the earlier parts of the previous decade. And so I thought, OK, I know how to code, because most businesses do, because they need to write a script for their experiments. So I built a team, basically drained all my savings into the startup. We built the product, launched in three months. It was got SEO.

I learned how to acquire users, got to first-yearly revenue was like two tens of thousands of dollars a month. But the unit economics weren't great. We just decided, let's build something, and we built something. But that something didn't really have a lot of long-term value, I think, and so I had to give them my own way.

Mudassir (04:25.571)
Mm-hmm. Yeah.

Anton (Flashpoint VC) (04:37.426)
And so like zero bank account. And I thought, okay, like this is pretty interesting to like do something in technology space, but probably my, you know, and being entrepreneur, it's a lot of this, you know, kind of like cosine function or sine function, a lot of volatility. And so I wanted a little bit less volatility, to be honest. And so I found...

Mudassir (05:01.626)
Yeah.

Anton (Flashpoint VC) (05:05.174)
two investment bankers who did IPOs for a living before. And they launched a fund. It was a Fund One, Flashpoint Fund One. And basically, I said, let me join you. And so I did. And I've been here for 11 years, basically, building Flashpoint together with Alex and Michael.

Mudassir (05:26.965)
Awesome. Do you miss being a founder?

Anton (Flashpoint VC) (05:30.174)
I think there is a joy that I miss when you ship out something and when you get that user traction. Somebody buys something for the first time or you hit that, and there's daily milestones. But I think it also comes with a downside because everything, when somebody churns, and especially the early days, it's very hard to...

Mudassir (05:39.048)
Mm-hmm.

Mudassir (05:45.706)
Mm-hmm.

Anton (Flashpoint VC) (05:59.822)
to put that emotional distance, you live the company. And I think in the investment world, and running a VC firm, I think there is still volatility, but the volatility, to describe it sort of using math, is you have like running a company is like running, it's like a function that is, I don't know, sign of like 2X, I would say. So very, you know.

Very volatile but like running a BC is sort of like a sign of X by 2 so you still have this volatility of good periods and bad periods but But you can you have time you have to really time to adapt. You don't have this like daily emotional swings. And so Some people, you know Basically live on that, you know Thrust of you know joy and disappointment and that's how they energize for me

Mudassir (06:31.506)
Yep.

Mudassir (06:41.438)
delayed. Yeah yeah.

Anton (Flashpoint VC) (06:58.374)
I want a slightly more paced environment. I think VC is the one where you still get that. And running VC is almost, it is running a business. It's not that different. But everything is a bit slower versus a company.

Mudassir (07:01.85)
Yeah. Less adrenaline.

Mudassir (07:09.683)
Yeah.

Mudassir (07:18.182)
Awesome. So is starting a fund, and you've been with Flashpoint from the earliest of the days, starting a fund a really difficult thing? Because when you and I met for the first time, we talked about what does it feel like to be a GP or a fund manager or something? So what exactly does it feel like to manage a fund, to run a fund or something? What exactly does that look like?

Anton (Flashpoint VC) (07:46.474)
I think there is... And it depends when you're just starting out or when you've already been doing that for a while. I think there is definitely more structure when you're doing it, not for the first time. But when you're launching an organization, you're...

you pretty much, in a sense, don't have any processes for the most part, right? So like in a company. So you need to figure out, okay, how's the deal flow is gonna go, right? So then you go into, okay, I got the deal flow, so I've got pitch decks and meetings with founders. That's assuming you already raised capital.

And so if you don't have a raised pool of capital, then you first need to figure out how you're going to raise it. And so there was a lot of selling involved in the early days. But when you're launching the fund for the first time, I guess the first thing to probably answer is what's your angle?

like, what's your unique sound proposition, both to founders and RLTs? It's very hard to launch generic fun, I think, these days. So you need to either go on a specific founder set, whether that's being very geographical focus or very vertical focus. So you might go into Deep Tech, or you might go into cyber, if you have background in cyber. But basically,

The next step is trying to unite that ICP with the target LP audience that you're trying to raise money from. So if you have access to institutional money, then your job is a little bit easier because they typically write bigger checks. So you need only like five, seven names to really kick off the fund. You're going to have your anchor LP. And then around that anchor LP, you might have another five, seven LPs that are like...

Anton (Flashpoint VC) (09:52.258)
half the size or a tenth of the size, but that will get you enough to get that first closing. If you don't have access to institutional piece, that's where things are becoming a little bit more tricky because then it's probably like a best family offices, or just founders or high net worth individuals. And so they don't really write large checks. So you need like a sheer volume of them, right? So in that sense, you...

Mudassir (10:16.411)
Yeah.

Anton (Flashpoint VC) (10:22.154)
you almost have to sort of like, and it's like a marketplace, right? So you need to solve one part of the marketplace, right? And since you need funds to invest, like your investor is your client. And so not the founder who ends up getting the money, but your investor is the client. And so you basically have to, you know, start pitching something that you might not have. So like, okay, I've got this pool of capital.

like already raised, and so then you go and actually raise it. And then you need to do it quickly, right? So you need to prewire a lot of the early discussions in terms of that you might be thinking about it, and then pop up, oh, here, I've got this fund, that's how you raise it. So you get to the first milestone, then you go and try to raise the next milestone while at the same time doing deals. So raising a fund versus raising a round, I think raising a fund is much harder because in a round...

You only need one lead investor. And then typically, everybody gets brought in. And in a fund structure, you really need to get that pool of 10, 20 people, which is a bit harder. Because that's why people go to YCs, for example. Because there is no lead investor, per se. And so when you go into Demo Day, and you get like 50 demo requests, and then you get that.

Mudassir (11:23.514)
Yeah, everybody else, please follow.

Yeah.

Anton (Flashpoint VC) (11:50.786)
You get that motion started. And so that's how you get raised, basically, syndicate rounds. A lot of companies end up doing that. That's what's valuable about YC, for instance, is that you get that fundraising ultimately solved. And so you might basically give them 7% stake to organize that process, just like you would give an investment banker, like 4% or 5% of the total raise.

giving it to a banker probably is going to be cheaper, but you also get the YC logo, which customers love and it gives like a proof stamp of approval, especially in the US corporate world, that this is like somebody, it's great.

Mudassir (12:22.828)
Mm-hmm.

Mudassir (12:33.31)
So a question around YC, because I do have the idea, from the founder's perspective, there's tons of people that I know, they would apply for YC, some of them got accepted, some of them successfully graduated from them, and they went on to raise subsequent round. I could answer them, but from an investor perspective, what value does YC provide, or Techstars would provide, to the VC world?

Anton (Flashpoint VC) (13:01.632)
Well...

Anton (Flashpoint VC) (13:05.798)
Usually, you're overpaying if you end up investing into a YC company, at least over the last few years. And it's been different in the earlier days. So we have a few companies like Guesty, who raised from YC in the earlier days, but that was a cohort of 2013, when it was very early on. So you didn't have 300 companies basically getting that stamp of approval.

Mudassir (13:27.195)
Oh wow, okay.

Anton (Flashpoint VC) (13:35.294)
So in the early days, it meant a lot, like really a lot. So it's like, OK, you went through that rigorous process. You're a month, like sort of considered among the companies that are in the likes of Dropbox, and Tribe, and Airbnb, et cetera. So nowadays, you basically get like 300 companies, like every six months.

I think there's a lot of entitlement that YC founders have. A lot of the times it doesn't get back going forward. And so I think it's more of a challenge actually these days to back a YC company, but some funds made it their pure strategy, right? And they've been fairly successful.

Mudassir (14:22.268)
Yeah.

Anton (Flashpoint VC) (14:26.85)
with multiple cash on cash. So not to diminish YC's importance in this world. And they're still a pretty good stamp of approval when it comes to spotting great companies.

Mudassir (14:36.97)
Yeah.

Mudassir (14:42.486)
You're in that ecosystem for quite a while now. So a very nuanced sort of a question. Do you think the startup ecosystem or the startup world needs more YCs?

Mudassir (14:59.23)
Can there be another YC as well on top of that?

Anton (Flashpoint VC) (15:05.79)
I mean, there's a few funds, accelerators, that exist. There's one, like SitCamp in Europe, that has done a pretty good job spotting early-stage companies across your landscape. I mean, there's 500 startups. There is Techstars. So there's already quite a handful of accelerators that basically have this offer. I'll give you a couple hundred thousand for a few percentage points, usually pre-revenue, maybe even pre-product. So.

Mudassir (15:14.758)
Mm-hmm.

Mudassir (15:23.986)
Mm-hmm.

Anton (Flashpoint VC) (15:34.83)
I don't think actually you need more of those. I think today access to early stage capital is pretty abundant, I'd actually say. There is a lot of spillover effect of CEOs cashing out and giving back to the communities. I think we've seen it multiple times across Baltic ecosystem, across Israeli ecosystem.

across London ecosystem. So founders build a great business and then they cash out and they invest back into the founders. So there's, I don't think there is like a need for more institutional like accelerator to be honest.

Mudassir (16:13.35)
Okay, all right, cool. One of the things that I do is, whenever I have any VC on the podcast, so I try to understand what do you guys think when you invest in any company? And that's actually, the thesis behind that is, so we can help more founders understand when they're approaching any VC, Flashpoint or any other, what they exactly need to fix, how they should approach the pitch, and all of that, the entire fundraising process.

So that's the entire goal that I do. Couple of things that comes to my mind if we start down there. You have seen like thousands of thousands of thousands of pitch decks across these years, every year probably. If you could just jot it down, if you could just narrow it down to three main challenges, three main problems that you see in founders, even to this day, that they're still making the same problem when they're pitching to an investor, to a seed investor, to a CDJ investor.

What would those be? I mean, there could be like a gazillion. I know you would know the insights, but if you could just take, you know, bring the absolute, absolute pain points, what would those be?

Anton (Flashpoint VC) (17:26.661)
I mean, and like some founders have done it like better than others. But

Anton (Flashpoint VC) (17:35.794)
I think the most mistakes that I've seen is an ability to articulate like how large is the thumb. Because as you see, you're not a private equity. So your whole model is really based on a company able to hit like hopefully triple digits in revenue. Right. So because then it's like a parallel. Right.

Mudassir (17:51.486)
Okay.

Mudassir (18:00.671)
Hmm.

Anton (Flashpoint VC) (18:06.014)
In the public markets, it's like the returns are also power law. People are talking about the bell curve. And yes, on a daily basis, it's a bell curve, right? But if you look at long-term, it's the same. It's powerful. So, and the market cap tends to highly correlate with the revenues and ability to capture market share. So just like in public markets, you need growing companies. That's the ones that are growing.

Mudassir (18:09.684)
day.

Mudassir (18:16.338)
It's always going up, yeah. Yeah.

Anton (Flashpoint VC) (18:35.587)
So I think that's the biggest.

I think the biggest challenge that I've seen of founders really well articulating, like how big is the thumb, whether that's through vision or in immediate market size that they're going after. Because all of the big companies that have really made it into the dekakor, there's a term that got invented, like tens of billions of dollars, have been either like construction

Mudassir (19:01.275)
Yeah.

Anton (Flashpoint VC) (19:08.678)
in food delivery with like, I don't know, go buff is like one example, like, or door dash, right? Or, you know, like travel with Airbnb, it's like a huge, huge thumbs. There's like 600 billion thumb, right? So, or like with Uber, with like transportation and like, you know, started as a taxi, but even taxi market is like, you know, it's tons of billions of dollars. So, so I think this is like the biggest one.

Mudassir (19:13.97)
Mm-hmm.

Anton (Flashpoint VC) (19:37.63)
I think people don't talk enough about their ability to hire. They are generally talking about great team, but I think people need to spend, in my opinion, your ability to hire and not just who you have today.

but who are the next five hires for you. And if you can articulate that it's only capital that is a constraint to get that amazing team in place, because at the end of the day, it's the team that builds companies. It's not the founder. Founder is like organizer of capital and recruitment basically. And I think the last one is probably like what we've...

What we've started to notice more is founder market fit. I think as the environment has gotten substantially more saturated with just the sheer companies, also like a decade ago, the VC world hasn't been $300 billion a year invested every year. It was probably like 1 tenth of that. So in that sense, you get a

Mudassir (20:54.675)
Yeah, yeah.

Anton (Flashpoint VC) (20:58.762)
like substantially more competition. So you really need to have that unique insight. And typically, like if you are a founder or not from this market, it's much harder to really like be the, like the one to further expand the market size and further to like iterate on the problem and expand the product. Not that it's like impossible, but I think this is just makes...

your job a whole lot easier, not to reinvent what has, or re-educate yourself about the industry. I mean, I could keep on going, but those are probably the three.

Mudassir (21:43.278)
Yeah, yeah, please. Okay, okay. So.

Mudassir (21:49.89)
One thing that caught my eye, I think, somebody was reading this thing very recently, and that was around fund cycle. So fund cycle, from what I understood, is which state of life of the fund that you are in. So for example, if you raise whatever the life of the fund is, 44 years, you're already into two years or three years. So you're almost at the end of the fund cycle. So what exactly is a fund cycle, and why founders should care about that? How does that impact founders, and why they should care about that?

Because most people would think about, like most founders, some context to use, most founders that I would meet, they would do is, they would just approach all VCs. Suppose you invest in CDS, so they would approach all CDS in that vertical and think about exactly the same thing without even knowing the different cycles, without even knowing the check size they can write, the front size that they have, like all of these things. So how important is all these nuanced things for the founders?

Anton (Flashpoint VC) (22:49.486)
I mean, it is quite important. I think this is what separates a first-time founder from a second-time founder, typically, is actually knowing what to ask if you see on that first call. Because it's not that, obviously, the founder wants to raise money, so he gets to talk the most. But I think it's that opportunity, basically, for the founder to get.

Mudassir (22:59.988)
Mm-hmm.

Anton (Flashpoint VC) (23:19.662)
to get the feedback about the VC that he wants to partner with. And so it matters for a few reasons. One is that sometimes people announce things, but they might have done only the first closing. So in reality, their ability to, for instance, follow on might be substantially less. So if you don't have a big enough fund for follow-ons, you might not end up following.

Not everybody follows on, right? So I think it's also important to get it up front, because sometimes founders think that everybody follows on. Well, that's not really the case. There is benchmark. They're typically well known for not following on it, right? So they write check once, and that's it. And so in that sense, you really have to know.

Mudassir (24:03.249)
Hmm.

Anton (Flashpoint VC) (24:15.63)
who are you getting in sort of in bed with? Because it's like a marriage. So you might want to ask all the right questions beforehand. But also if like...

Mudassir (24:25.682)
What question do you think, sorry to interrupt, what question do you think founders should ask a VC when they get on a call? And this is a question pertaining to a topic which I hold dearly, which is VC founder fate, sort of a thing, like investor founder fate. How do you figure out exactly the right partner for your marriage? So what question do you think they should also ask? Because most people, they're like, yeah, no questions, just give us a check, that kind of a thing.

Anton (Flashpoint VC) (24:28.299)
Yeah.

Anton (Flashpoint VC) (24:40.621)
Yeah.

Anton (Flashpoint VC) (24:54.378)
Well, I think it's important. Like, not everything goes according to plan, right? So I think it's important to get that answer to, like, are you following me on, and how often do you follow on, right? And so some funds, they basically have automatic follow on strategy. So they might write a small check, and their follow on isn't as large. But they kind of give it up front, like, OK, I'm going to

writing a small check, but I already baked in that I'm going to do a follow on when there is an extra. So that's number one. Number two is, when you are following on, what's that mentality in mind? Is that a separate investment decision? How deep do you want to do your diligence upon next time you want to write the check? Because sometimes, also, founders assume that whenever, if you're on the cap table,

it's like there is no due diligence, right? And people don't want to know like, you know, what's, you know, especially if they're less active and involved. So they might, you know, think that, you know, you're just gonna like, okay, here's an update, just like wire us the money, right? Well, with some funds it is like that with people who are more hands-on, you know, it's less of a case, right? I think the best way for founder also to...

test VC, to be honest, is like after the call is try to ask, we see like who would be like a great founder reference, like who would, and because that also would give you like a good feedback loop, would that VC like connect you immediately and like provide that instant introduction.

Or he might name a few names, you know, so you go out and like do it yourself because if like VC wants to Offer that right like often that probably means that he's like more excited He actually wants to use his network to I don't know impress the founder or If the VC is less, you know involved in that process and it's up to the founder to like realize then maybe They mean like VC is like maybe interested but not like substantially

Anton (Flashpoint VC) (27:16.842)
and not as excited, right? So he might actually end up doing a deal. It might just take not like two months, but like six months. I don't know. So there's different dynamics that you can actually exploit. You just need to think in advance about what to ask. But there is definitely a way to test VC's interest because everybody, nobody, well, not nobody, but a lot of the VCs don't really say no.

So because they don't want to, because if you said no, it's much harder to say, yeah, no, I changed my mind, and like, get through FOMO and basically like actually like commit, but so it's the art of saying no, like, but exactly. So, and in that case, I think you can actually exploit the dynamic for free benefit either to get like a reference on the firm that you wanna.

Mudassir (27:48.39)
Yeah.

Mudassir (27:59.955)
Yeah.

Mudassir (28:03.347)
they're saying no.

Anton (Flashpoint VC) (28:17.134)
partner with or just check how serious is the VC. Are they going to the next step? Do you want to give them more data for them to get more educated?

Mudassir (28:29.138)
Got it, got it, okay. So, couple of things around Flashpoint, especially. So, we were doing some research, some our own due diligence on Flashpoint in a funny way. And we just come across like there's a lot of, there's a few venture part that you guys offer. So there's a fund, then there's a growth debt, something like that. So, two questions on top of that. So first one is, why all these products exist? Like why is that helpful? And,

why anybody should consider a growth net? And this is probably a question that I'm gonna ask Dennis as well, but I just wanna take your opinion on top of that as well. Yeah.

Anton (Flashpoint VC) (29:07.227)
Sure. Well, I mean, when we were scaling Flashpoint, I think after Fund 2, we started to basically think about, OK, do you just grow the fund sizes? And that's the way how to grow the business model. And the bad part about the venture capital business model, per se, the asset class.

is that it's a very chainsaw type of a business model. So similar to a game of musical chairs, that's what it's called. So you basically, everything is nice and shiny until the music stops, and then there is no funding. And the market kind of saw it two years ago. And so if you're a business model,

Mudassir (29:46.954)
Yeah, yeah, yeah.

Anton (Flashpoint VC) (30:02.698)
If you didn't raise a fund in the right environment, and you just ended up investing just before things got bad, and then generally the portfolio is more likely than not is going to suffer from the market environment. And so you might actually have a very hard time recouping from that. So if you invest into different asset class that has synergies with your core product.

then you might basically diversify you a little bit. So that's how the idea of venture debt and growth debt basically emerged, is that it's a debt instrument. And so whenever things are basically bad in the market, like they were a couple of years, like over the last couple of years, like I think the market sort of started to pick up earlier this year, maybe towards the end of last year, is...

Mudassir (30:51.283)
Yeah.

Anton (Flashpoint VC) (31:00.554)
I mean, there is almost no funding and only like large funds are mostly supporting their companies because they also have to maintain the books. And so they don't want to write it off until their next fundraising event. And so you might do it through a venture debt instrument because if equity is not there, then you need to supplement it somehow, right? And banks typically run away when there is a crisis. I think everybody saw it with...

Mudassir (31:08.234)
Hmm.

Anton (Flashpoint VC) (31:30.37)
during the Silicon Valley bust. And so no banks or funding startups or even growth companies. So private debt is really the only option. And so demand for that goes up. Right? And you can get best quality of companies during that period. But that's also the synergies that you know.

Mudassir (31:32.886)
Mm-hmm. Thank you.

Anton (Flashpoint VC) (31:58.754)
We invest on the earliest stage side into series A companies. They have like one, two, three, four, five million dollars of revenue. That side invests into companies that are typically like five to 15 in revenue. And so basically, if we miss something or we don't agree on valuations, we actually can try to partner with a company on the next stage. And so that also allows you to basically give like the

company an offer that they might be interested in, while not also competing with Series B funds, right? Because this is something that goes on top of a Series B fund or a Series A investment. So you want to be a partner to them and not a competitor. So that's the beauty about doing multi-product company. And we haven't seen too many of those. I think there is probably one in Israel.

Mudassir (32:53.592)
Mm-hmm.

Anton (Flashpoint VC) (32:56.77)
like Viola that has done like a multi-product company. They have a debt fund, they have a late growth equity fund, and they also have early stage Viola Ventures, early stage fund, right? So they're a multi-product. But there's not too many examples.

Mudassir (33:13.832)
Okay.

Mudassir (33:18.578)
Okay, all right, cool, that's very helpful. So a question that I'm gonna ask you, which is not a part of the recording, but just want you to know. So two things actually, and that's because I just came across this thing, so building my own fund. So how do you decide which state do you want to invest in?

Like, should it be, like, for example, I'll give you some numbers just to make you more understandable. So the fund that I'm raising and a few people that we got connected to, they're saying, raise a smaller fund, like a $5 million fund, maybe $10 million, like max, a really small fund, invest in pre-seed, do the collaborative sort of a thing because you have the network. So write smaller checks, build that portfolio, then go and raise a bigger fund, okay? Because that's how you grow the model. The other...

few people that I met, they're like, raise a bigger fund, get out of the pre-seed, invest in seed and series A, write some meaningful check, and build business that way. So how do you figure out which stage you should invest in? And using that power law equation, how would you structure this new fund for the first time?

Anton (Flashpoint VC) (34:33.854)
I think the important part is really trying to understand who you are. It's very hard to be someone you're not. And so I think on the VC side, if you're doing pre-... And we haven't done much pre-seq, to be honest, right? But from observation...

Mudassir (34:57.566)
Yeah.

Anton (Flashpoint VC) (34:59.374)
Pre-seed is a lot about psychology because funds, companies might not even launch product. So that's that. So you're giving a check on a presentation. So you really need to feel people. How trustworthy are they? Can you crack it? So I think EQ is super important.

Mudassir (35:18.654)
Hmm.

Anton (Flashpoint VC) (35:29.898)
like soul searching through that conversation. I mean, is that founder has resilience? That's the only question you ask, I think, you need to be asking yourself. Because OK, big market and resilience, right? Because a lot of like, you're going to have like five pivots before this thing actually hits you, you say, right? So are you comfortable with that? So if you are trying to do that, it might take a while to actually get that.

Mudassir (35:36.67)
Hmm.

Anton (Flashpoint VC) (35:58.402)
product going. I think when seed in Series A, I think it's more about how friendly you are with the next investor so you can really accelerate the next fundraising. Typically, it's hard to do seed in Series A. People are actually... I mean, unless you're 50 million

Mudassir (36:11.338)
Okay.

Mudassir (36:15.378)
series B down, B plus down.

Mudassir (36:21.052)
Hmm.

Anton (Flashpoint VC) (36:25.618)
So but even 50 million is like to really do series A, when the check size are like the smaller series A's are, I don't know, like five, six million, right? So it's pretty hard. Like, so it's like five checks, six, on a $50 million fund with, if you're especially doing more follow-on later on, like that's it, right? So you're like already like at seed then. So if you're doing seed then.

Mudassir (36:25.674)
Mm-hmm.

Mudassir (36:34.722)
Yeah, it's pretty hard. Yeah. Yeah, exactly.

Anton (Flashpoint VC) (36:50.546)
Yeah, you can write like a million dollar 500k check, then also have some room to participate in like series A when things are kind of better in terms of traction and bigger. And so.

Mudassir (36:57.064)
Yeah.

Mudassir (37:02.611)
Hmm.

Anton (Flashpoint VC) (37:05.102)
But again, then it comes to what's real in terms of launching a fund. So because launching a $5 million fund versus launching a $30 million, or $50 million fund, it's two different ball games. So you either need to partner with somebody who's got also network in terms of fundraising to really share the load of fundraising.

Mudassir (37:29.76)
Hmm.

Mudassir (37:33.883)
Yeah.

Anton (Flashpoint VC) (37:37.015)
or you do what some people do, right? So you basically raise a fund every 12 months. So because what's a $50 million? Well, I mean, in the sense that that's what people, especially with Agent List being a more popular platform with syndicates these days, is that...

Mudassir (37:44.53)
Become a rolling man. Yeah.

Mudassir (37:52.711)
Yeah, yeah.

Anton (Flashpoint VC) (37:56.802)
Like, typically, a fund is a commitment-based fund, right? So you have a 4 plus 4 fund. You invest over four years. So the fund is $50 million, right? That means that, OK, every year, you can invest roughly $10 million a year. So you might as well launch four funds, right? And once you get that traction going with dual flows, with repricing, and et cetera. So in that sense. But I think it's like I'll get back to the first point is.

really understand yourself and try to double down on what you think you're good at, and not what you want, but rather what you're good at. I think this is probably like, have more discipline. I think most people...

Mudassir (38:32.434)
Good ad.

Mudassir (38:40.689)
See you soon!

Anton (Flashpoint VC) (38:50.962)
make mistakes investing when they deviate substantially from, like, I want to try this. I mean, if you want to try something, let it be a specific strategy rather than, like, rather than, OK, this is opportunistic. So.

Mudassir (39:08.59)
Got it. Okay. Rolling again. All right. Thank you for explaining that. I appreciate it. So when you get like, give us two insights here. How many paycheck do you see a year? And what do you actually look for in the ones that you actually think, oh, these are investible? And what stage usually you invest in?

Anton (Flashpoint VC) (39:30.102)
We basically measure stuff that we were outbounding a lot. Because we are focused on founders from Europe and Israel, and ideally from Central Europe and Israel, that are building global companies. So we...

believe in the thesis and our thesis is those founders typically are more efficient and so because they're more efficient, they'll need less capital to build that big business and eventually they might be having less capital in the earlier days but if they grow they'll become

just as a US company. And it's nothing to differentiate themselves. They might dream of domicile themselves. And the founders typically also move closer to the US market once they're big, to be closer to public investor community. So because of that, because of our office infrastructure, so.

we have people all across, like Europe, I'm in New York, but most of our offices are in Europe. And so, we look for companies that are typically already like.

build teams. So what's a team? Team is typically like a 25 to 40 people team, right? So before that, if you're investing into B2B software companies, it's much harder to operate a B2B software business with like 10 employees. You need to have R&D and like marketing and customer success and sales execs and support and then you probably have some

Mudassir (41:11.791)
Hmm.

Anton (Flashpoint VC) (41:26.656)
source, but so you need the controller, et cetera. So cash collection. So you need 25 people. If you're investing into companies that are doing like over a million dollars of revenue, that's who we focus on. So companies that are typically doing one to five. In terms of what makes us excited relative to whom we talk, is it probably goes in that order.

Mudassir (41:40.444)
Okay.

Mudassir (41:52.202)
Yeah.

Anton (Flashpoint VC) (41:57.51)
I want to see a huge TAM. And so if you don't have a $10 billion TAM, I'm less excited than TAM, like total addressable market. And so, yes, your serviceable market might be smaller, but you need to understand how that big TAM gets exploited. Because otherwise, there is no way how a company can get...

Mudassir (42:03.998)
dumb like what do you mean by dumb like the okay so time okay yeah got it got it okay

Anton (Flashpoint VC) (42:27.338)
with like $300 million of them, like $100 million of revenue, that's like impossible, right? So there's very rarely like that much monopoly, like maybe in certain markets there is, but like in most markets there's not. And so that's the first one, right? Like I wanna understand on that first call to get a feel of what, is there like an experiment driven culture inside the company? Because...

from my observation, and maybe that's where a laser physicist shines through, or a wannabe physicist, is that running, like a venture firm is running multiple experiments, and running a business is running a lab, basically. And so you do a bunch of them, and then if you feel like they're good, you put more resources there. And so I want to understand, does that founder has that?

Mudassir (43:01.507)
Okay.

Anton (Flashpoint VC) (43:26.626)
that experiment-driven culture, because also to do an experiment properly, you have to measure stuff. And so that also answers, how good will they be on the reporting side? And so if they don't have this experiment culture, probably is going to be bad stuff on the reporting side. And so, as I said before, ability to hire is super important. So...

Do you see at Series A stage, how many of those mid-level or C roles has that person? There's probably less C roles because only the founder is called chief executive officer. Probably he's not the CEO yet. He's still a founder. But ability to grow into that C role of the founders coupled with ability to hire...

like quality, mid-level folks. Because a lot of founders also will give titles away. That's bad. So if you have a CFO at the stage of a million dollars of revenue, you don't understand what a CFO does. So, I mean, if you're a founder, sure, you can name whatever you want to name yourself, but...

Mudassir (44:32.728)
I know.

Mudassir (44:43.738)
I know. Yeah.

Anton (Flashpoint VC) (44:51.626)
it probably means that you don't really know what that person should be doing. And so that tells you also a lot, like is that person really hired, like I had a finance who is then VP finance, who is then SVP finance. And then maybe like once that person will try to get the company public, then they'll become a CFO, right? So, and that understanding, like how to give care,

Mudassir (44:56.414)
Hmm.

Anton (Flashpoint VC) (45:21.85)
to the team that you're hire also, because it also takes me back, are you able to grow into a professional CRO or you're just a founder yet? So, and then you need to like, and then together with the shareholders and the board, you need to be working with the team on that. Yeah, I think lately like,

You also wanna understand, given that we live through like two different...

Anton (Flashpoint VC) (45:54.462)
let's call them boom-boss cycles of COVID and then interest rates, I kind of want to understand like how resilient is that person. So, because sometimes you really need to have a lot of resiliency, not just like that you're passionate about a problem, but how much trust can that person withheld? And like, I think this is proven to be also like an important trade.

Mudassir (46:24.179)
Okay. Okay, so two questions on top of that. So one is, what differentiates a founder from a CEO or a C-level exec? And two is, your thoughts on hiring fractional executives, fractional CFOs, CMOs, CPOs, or whatever.

Anton (Flashpoint VC) (46:43.21)
I think the difference between a founder and a CEO is that, is lack of systems. So like if you're still a founder, like you probably have less systems. Like I think once you have systems in place and process design, then

things will start to fall into. Then everybody understands what that person role is and what needs to be done. And then there's metrics. So the ability of founders to build systems and hire people to run those systems and build new systems is basically what defines a CEO relative to a founder. A founder typically is the one who is like...

you know, fixing shit. And then, you know, the CEO is usually the one who's got like a person to fix that, right? So, and process and how to do it. I mean, I think people should hire like great people, right? So it's very hard to like grow if you're not like a professional into something.

into something that you're not. And it's fine too. You should be hiring the best people that exist for that particular job profile. So if you run a B2B software company that really relies substantially on marketing, and then you landed great VP marketing, hire him. He'll educate you

Anton (Flashpoint VC) (48:27.754)
you know, before you understand what needs to be done yourself, because, you know, people who haven't lived through understanding what the product needs to be, like how it needs to be addressed, usually end up actually like hiring and firing because they thought that, okay, he's going to like do everything.

And that usually is rarely the case. You still need context then. It's usually the founder and the CEO who gives that context to make sure that things gets fixed or built. But as we're typically a lead investor, we're...

try to help on hiring the mid senior execs. And there is great also people like agencies who have a deep network of great execs. And we'll try to match them too. But we're always present on the last stage of interview. I think it gives.

Mudassir (49:08.03)
Hmm.

Mudassir (49:19.596)
Yeah.

Anton (Flashpoint VC) (49:35.566)
perspective to the founders. What does a non-operating executive thinks about that person? It's very easy to get excited about a candidate and especially in the US people are really good at selling themselves. As an investor you can typically cut through the bullshit much quicker.

without like Eleni, like that person, because you're not like, I mean, I'm not day to day, right? Like I, I'm day to day with the founder maybe, or like not even day to day, but like week to week or month to month. But, so I can be like more blunt and more direct with that candidate.

Mudassir (50:22.97)
Awesome. Thank you so much for sharing all the things, Anton. So what we do is we have a decent big open audience, listen to the podcast, read the newsletter, and now also a private community of venture-backed founders. So what we do is before anybody's coming on the podcast, just load out this questionnaire like, hey, Anton from Flashpoint is coming tomorrow. Any question you would like to ask him. So people submit all kinds of questions, good ones, bad ones, like all kinds of those, like you could imagine. So we've just managed to...

screen them down to just five of those, like five really good ones. So I just wanna ask them in no particular order, okay? So the first one is, your thoughts on founder who have raised down rounds and have taken liquidation preferences recently. What do you think about those?

Anton (Flashpoint VC) (50:57.538)
Ciao.

Anton (Flashpoint VC) (51:10.27)
We are not a great believer in down rounds, to be honest. I think the best way to do a down round is do a flat round with addition. Well, I mean, in a sense, you can do a down round or you can try to structure when there is additional warrants and other mechanism. And so...

Mudassir (51:25.436)
What's a flight round?

Anton (Flashpoint VC) (51:38.25)
I think it's also your ability to negotiate a deal that is interesting for you that is important. And so if you are a founder who basically accepted a down round, I mean, things must be pretty shitty. So like, I mean, if things are pretty shitty, like, why would you want to invest into the future? Right? So I think things probably should be doing at least flat.

for you to get like, okay, now you've gone through the flat, get excited about the future, here's the product, here's growth. I think recovering from a down round is quite hard. It's not impossible, but it is quite hard. Liquidation preference, I mean, they always exist. So I think in the earlier phases, I think in Shazam case that we're back in the early days.

Mudassir (52:17.947)
Okay.

Anton (Flashpoint VC) (52:31.75)
It's got different stacks of participation preference. So I think it's the size of the liquidation preference that really matters. How under the stack are you? If you are raising a Series A round, and there is $20 million of liquidation preference ahead of you, and revenue is $1 or $2 million, then you've got a lot of questions.

Like it's really like you must restructure your cap table. Like, I mean, no, well, in my opinion, like no serious enough investor would like spend time before you actually restructure stuff. So.

Not, but I mean, it's sometimes it's quite hard. I mean, that means almost like shutting down the company because investors don't want to like lose their, you know, their, um, their preference rights. But, uh, I mean, shit happens.

Mudassir (53:22.194)
Yeah.

Mudassir (53:30.798)
Yeah. OK. So the next one is, so this is actually a founder. And he is telling whatever the story that they have. So I feel like we have a great company. We have lost more than 50% of the cap table of the equity before our series A. What options do we have? And would you be interested in backing such company with huge potential, but a messed up cap table?

Anton (Flashpoint VC) (53:57.45)
Well, I think the question is how messed up it is. Well, more than 50 is like... 90 is more than 50, and 55 is more than 50. Those are two different numbers. So let me give you... Because if you raised the pre-seed round, and they gave out, I don't know, 20%, and then you raised the seed round, then you gave out 20%. Then you raised the seed extension round.

Mudassir (54:02.242)
Yeah, they lost like more than 50 before series A. So I think they're about to raise the series A.

Mudassir (54:11.385)
Yeah.

Mudassir (54:20.383)
Hmm.

Anton (Flashpoint VC) (54:26.882)
like another one, right? Raised another, lost another 15% dilution. You already get like 50, right? So it's almost like an everyday scenario in this market. Like, I mean, I don't think you're alone in that case. However, I mean, we've backed company that had, like founders only 25% and...

Mudassir (54:33.908)
Yeah.

Mudassir (54:37.923)
Yeah, yeah.

Anton (Flashpoint VC) (54:54.162)
They were jumping out of COVID with great traction, hit like $8 million in the year that we invested, and in previous year they had like one and a half. So they have great growth. So we backed that. Despite the founder team having like 25%, we still backed that company. I think the challenge that arises for the investor is really understanding how long term thinking are you. Because...

Mudassir (55:04.778)
Wow, yeah.

Anton (Flashpoint VC) (55:22.974)
If you're diluted to 25%, a lot of investors might indeed think that you're not committed for the long run because you might need still to get another three, four, five rounds of growth if you really want to get that strong return. So I think also a good way to do that is to create ahead of when you approach investors,

and that question gets asked is to think about it strategically ahead of the call and ahead of that fundraising round and align with your investors that, for instance, you're not going to get diluted through that round and the existing investors are happy to get you non-diluted through that round, but you probably need to align that.

on that topic with your shareholders before you actually do the fundraising. It's harder to do that in the same time as you're doing around. So that would be probably my advice. But if the company is great and you structure the compensation and the long-term motivation right, nothing should preclude you from raising around.

Mudassir (56:40.794)
Alright, so the next one is, of all the series, like from pre-C to series D or like whatever, what's the least risky series, round or series looks like to you? Which is a weird question to ask, but yeah, anyhow.

Anton (Flashpoint VC) (56:57.25)
Well, I mean, everything has a risk return. So I mean, if you don't want to make money, you can just invest into pre-IPO companies, right? So I think this is like the probably. So I think what historically has been the case is that most repricings for shareholders have been.

Mudassir (57:00.322)
Yeah.

Mudassir (57:10.734)
Yeah, that's the best advice.

Anton (Flashpoint VC) (57:24.274)
either from C to Series A or from Series A to Series B. I mean, we only do Series A, like 90% of what we do is Series A. So we feel like the risk-reward basis is great at Series A because usually you're not going to lose the company because of bad churn.

And so you already have that product market fit going or about to have it going. I mean, maybe it's not like a 5X growth, but, you know, like 100% growth, like 70, 80% growth if you're like, you know, 5, 6, 7 million already of revenue. Also Series A is different than like different countries, the definition of it. But generally speaking, I think Series A has the best risk return in terms of what you can hope.

in terms of next repricing. Because after you get Series B, the repricing from B to C rounds is typically less than 2x in absolute terms. And then the rounds are bigger. So that means also that on a price per share basis, you might only grow 50%. But that's not a lot.

Mudassir (58:45.01)
But less risky as well. Less risky.

Anton (Flashpoint VC) (58:46.502)
Yeah, less risk, but I think if you ask me, what do you want to have a chance of making a 4x return or 3x, 3, 4x return and have some companies that are going to just return you probably cost versus having more chances of doing a 1.5 to 2x, I'll probably think, OK, no, I'll have like.

those that can triple, could triple until the next round and really shine through. Because a series B that is growing is gonna be so overpriced.

Mudassir (59:28.11)
Yeah, yeah, agreed. But that plays lovely into your hand. I mean, that helps you if the series B is overpriced. No?

Anton (Flashpoint VC) (59:36.318)
No, I mean, if you're investing in Series A and then everything is great, then that's why I'm saying you want to have those chances where the company is going to make from A to B, 4x, 4x. So you don't see it too often, but you do see it.

Mudassir (59:40.354)
Yeah.

Mudassir (59:50.125)
Mm-hmm.

Mudassir (59:56.422)
Awesome. The next one is, what's the process of making an investment decision at Flashpoint? How do you do all the due diligence, whatever? And what do you look for when the team does the due diligence?

Anton (Flashpoint VC) (01:00:11.434)
Well, we are striving ourselves as a data-driven VC. So we'll ask for substantial data after the initial call, if we really want to get that in. But the process looks pretty straightforward. You meet with a team. If we are very knowledgeable about the

Anton (Flashpoint VC) (01:00:40.058)
The topic, we'll try to arrange the call with a partner as soon as possible. Maybe in the first meeting we'll be with a partner. It's hard to do all of the calls because we do have 1,500 calls. So I'm like only three partners. So it's a bit tougher to be on all of them at the first time.

Mudassir (01:00:41.31)
Mm-hmm.

Mudassir (01:01:00.422)
Why not hire another partner? Just a random question. Okay.

Anton (Flashpoint VC) (01:01:03.478)
Well, I mean, economics then of the fund makes it less appealing. So there is a mix towards how much capital you manage versus what does your pyramid looks like. And so after the meeting, we typically ask a data request.

That starts from either granting us access to your analytical system. Like some people use whether that's Chartmoggle or...

Mudassir (01:01:34.319)
Hmm.

Anton (Flashpoint VC) (01:01:34.714)
other systems. We also built our own cohort maker. So if you just send us the raw data, you know, just like CSV file and some people are just like, here's the CSV file, like weighs like five megabytes, which is uploaded into a Python script that we wrote to basically decompose everything. So with two minutes, you basically get the entire...

Like if you don't need to clean the data set. So you get very clear picture of what's the net UR per month with the churn, how's it split by tiers. So you can do analysis relatively quickly. What we try to, if we like it, we try to basically ask for a few customer calls. And then after we have those few customer calls, we do a partner meeting.

and then we will give you a term sheet. So the process can be very smooth if access to data is there and if access to clients is there. And if the interest is there, exactly. So it could be like we've done deals in like three weeks. I mean, we haven't done deals like we're wiring the money next day, we've been diligent focused.

Mudassir (01:02:32.206)
Yeah. And if the interest is there. Yeah.

Mudassir (01:02:43.731)
Wow.

Anton (Flashpoint VC) (01:02:52.466)
But if things are great, sometimes we ask to verify. Especially when there is less data points, like if you're looking at enterprise software company. And so you might not have too many data points to really do a cohort analysis, et cetera, to verify. So there, we might ask to really understand your cache cycle.

So to understand how much money has really hit the bank and what has been the cash.

the cash chop in us and because you know, you might have like 10 customers and so that's the fastest way also to do diligence, right? So, and it also tests like how founders are willing to, how transparent are they willing to be? Because it's not like we're gonna find like, you know, we might only find if like somebody's lying to us, right? So like there's nothing else to find to be honest.

I don't really hear how much the founder is paying himself, like $8,000 a month, $10,000, $12,000 a month. I don't know. If you've got the budget to pay yourself a good salary, pay it. Who's against? So.

Mudassir (01:03:55.186)
This.

Mudassir (01:04:09.938)
A separate question. It was a question actually on the list. I'm not gonna be part of the recording. It's gonna be, it was a question on the list. How do you decide your own salary?

Anton (Flashpoint VC) (01:04:22.082)
For what? Like across the organization?

Mudassir (01:04:24.498)
Like, yeah, cross. Like, how much Anton decide, like, how much he should take? Like, who does decide that?

Anton (Flashpoint VC) (01:04:31.486)
Well, we, like as a company, basically we have the group itself, like raised some capital of who invested the GP basically.

Mudassir (01:04:33.929)
Yeah.

Anton (Flashpoint VC) (01:04:43.326)
And so we have a competition committee and we've signed a policy. Like this is what it looks like. You know, there's grades and everything. So pay gaps, like standard stuff. So I think you want to run a profitable business, right? So I think you need to reach that scale when you run a profitable business. But when you manage half a billion, you can run at least a break-even business. So then the question is, are you...

Mudassir (01:05:02.355)
Mm-hmm.

Mudassir (01:05:08.763)
Yeah.

Anton (Flashpoint VC) (01:05:11.906)
Do you want to turn profit or do you want to invest into like people? So then, then it becomes like more of a, uh, more of a strategic discussion with, with the board.

Mudassir (01:05:23.93)
Awesome. Rolling again. All right. So thank you so much, Anton, for answering all the questions. So we do have this one small ritual on the podcast. So what we do is we ask all our guests a question for our next guest without telling who the next guest is going to be. Okay? So I got a question for you. I'm also going to take a question from you at the end. So the question that the previous guest left for you is, what are the two best and worst investments you have made in your investment career?

in your VC career so far.

Anton (Flashpoint VC) (01:05:57.826)
Best. I mean, it's like, the question is, how do you define best? It's very subjective. You can base it on IRR. So if you made double your money in six months, you've done a great IRR. So this is great investment. I have got one of those. So we have a company that invested $15 and 1 Less than a year, basically turned into a

Mudassir (01:06:06.333)
Subjective, very subjective, yeah.

Mudassir (01:06:15.786)
Good.

Anton (Flashpoint VC) (01:06:27.746)
40, right? So great investment, right? So this is great. It's like in public markets, hedge fund. But because I've allocated a decent chunk of the capital to that investment, I was hoping to do a 7x, 8x on that money, right? So is that great or not? So it's like this missed opportunity, and a lot of the VC funds are valued on...

Mudassir (01:06:53.048)
Mm.

Anton (Flashpoint VC) (01:06:56.918)
like cash on cash multiple, right? So even if you double your money in a short period of time, you're going to have a great IRR. But cash on cash multiple isn't going to be great, right? So you're going to have DPI. So I'm saying that I've done a great deal because it produces DPI. Everybody loves DPI in this environment.

Anton (Flashpoint VC) (01:07:19.838)
I think the...

Anton (Flashpoint VC) (01:07:24.542)
I've done so far personally a little bit more than 15 investments. I think the...

Anton (Flashpoint VC) (01:07:37.59)
I have done one where I lost half of my capital. So that's probably like the worst is where you've basically wanted to, you hope for the best, but then like a minute after you like wire the money, like a VP sales leaves.

the product suddenly becomes obsolete and then the founder wants to invest into something new. Exactly. And then the sad part is that I flew into their office, set across the founder, the co-founder, the VP sales.

Mudassir (01:08:04.594)
What the? Like how does that happen? How does that happen? Tell us more about that.

Anton (Flashpoint VC) (01:08:24.77)
who was telling me about the Rolodex of the clients that he's gonna bring. So like literally lied to my face. So I'm like cheering myself that I've like, you know, like engineered a situation where at least could like recoup like half the cost. So like, this is probably the worst deal that I've done. I mean, I'm not gonna name names, but it's... Hey.

Mudassir (01:08:29.874)
My goodness. Oh my goodness.

Mudassir (01:08:46.415)
Off the topic, what was the company?

Oh, off the topic, it's not going to be a part of that. It's not going to be a part of recording nowhere at all. They're never going to do that.

Anton (Flashpoint VC) (01:08:57.027)
Yeah, so I mean, it's a company out of Colorado. So yeah, definitely not going to name names, not to piss off other, but people can figure it out. I think that... Yeah, sure. Yeah, like the... You know, also until you sell something, right? So we've got great...

Mudassir (01:09:03.694)
No, this is it. Makes sense. This is it. This is it. Now I'll take this part out of the recording by the way, just so you know.

Anton (Flashpoint VC) (01:09:22.71)
companies that we have backed, and we're still on the cap table, and they're growing. But until you sold it, you hoped for the best outcome. So we have a company that returns the fund. So this is great. And once we sell it, then it will be a great investment. So it's a mix.

Mudassir (01:09:31.014)
Yeah.

Mudassir (01:09:44.89)
Okay, okay, makes sense. All right, awesome. Question for the next guest.

Anton (Flashpoint VC) (01:09:54.666)
Well, I know who the next guest is probably, or maybe not actually. So, um, I'm like, okay, next. Okay. Cool. Uh, I guess my question would be, how do you stay consistent to the investment strategy while

Mudassir (01:09:58.778)
No, Dennis is not the next guest. Dennis is not the next guest. Yeah, okay. Yeah.

Mudassir (01:10:13.456)
Mm-hmm.

Anton (Flashpoint VC) (01:10:16.17)
while being flexible enough to ride the macro trends. And so, probably like that, because like most firms are generalist VCs. And so basically, how do you like turn on the switch from, okay, this is what you've done before, but you have to look ahead.

Mudassir (01:10:23.987)
Mm-hmm.

Mudassir (01:10:33.961)
Yeah, yeah.

Anton (Flashpoint VC) (01:10:45.174)
Right, so I think this is the question that I'm asking myself almost every day, is as we are still doing B2B software, but you really want to understand what's the next wave is that is coming and you don't want to be too late on it.

Mudassir (01:10:45.723)
Hmm.

Mudassir (01:10:55.572)
Yeah, yeah.

Mudassir (01:11:00.478)
Hmm. Yeah. Get into AI. Get into AI.

Anton (Flashpoint VC) (01:11:08.846)
Well, like we should have done that like five years ago, right? So maybe three, at least.

Mudassir (01:11:12.15)
Yeah, yeah. Yeah, yeah, yeah. But OK, awesome. So let me do this thing. Let's just say thank you by whatever, and then let's pause the recording. But please stay after the recording so I can tell you how to upload all this. OK? Cool. Thank you so much, Anton. Lovely talking to you. Thank you for all the wisdom. Thank you for the time, consideration, and candor. Thank you. Thank you again.

Anton (Flashpoint VC) (01:11:36.379)
My pleasure. It was great chatting.

Mudassir (01:11:41.493)
Alright