From Immigrant Founders to AI Venture Capital | Nick & Marina Davidovs, DVC

we hit the Dunning–Kruger effect it's basically when you start learning something in the very first like 3 four months you get this idea that you now the best that you know everything and then all of the sudden you experience complexity and that complexity you know throws you off your Feit but when we just figur it out what we really love we were always believe in the power of community and we realized that if we put this community thing as a foundation of venture capital and really try to make it work so we invest as a fund we have 120 investors that subscribe to our fund it's a rolling fund on angelist which basically means that every quarter that's a new vehicle and people invest similar checks in every vehicle hello I'm Somi Arian I'm a tech philosopher and the founder of InPeak my guest on today's podcast are Nick and Marina davidov Partners in life and in their Silicon Valley based Venture firm DVC there were many reasons why my interest was piqued in wanting to speak with Nick and Marina their story as immigrants who arrived in Silicon Valley from Russia less than a decade ago and their achievements in such a short time span was one of them but also I like people with a point of view and a unique perspective which Nick and Marina have no shortage of I thoroughly enjoyed this conversation and I'm confident that you will too this is like we are going to treat it like a dinner conversation we just met at a dinner I met you guys in Silicon Valley I was really fascinated by your story coming from Russia you know how you built your Venture Capital firm so I'm always

interested in talking to people who have a point of view and I think that definitely fits you because you you definitely have a point of view you have you have very strong opinions in a lot of things so first things first starting with the ladies first Marina why don't you give us a quick overview of yourself I'd love to hear a little bit about your story how it all came together as a firm and and you guys working together so take it away Marina my name is Marina Davida right now we are running together with Nick my husband, Davidovs Venture Collective which is a venture capital firm focused on early stage startups most of them are AI startups but we are not limited just byi but it's interesting I'm I'm I'm I'm looks like this is the case when it can be the story from two different points of view and I'm wondering how Nick will describe it we started working together since we were 19 19 years old so a long time ago we were trying not to work together so we also had different projects my area of expertise and my background quite diverse from operational staff financing background I also have law degree so I was always trying to combine all of my interests and all of my areas that I'm experts in and finally we put all all together and studied this VC perm which is a little bit different from most of the Venture Capital FS can you can see on the market but probably we can tell about this later yeah yes definitely we are going to come to that story of how your Venture Capital firm is different so Nick tell me a little bit about your background

your story and then we're going to come to how that the firm came together I come from a family of scientists and people Engineers who worked in Telecom my grandma was an airspace engineer so I was always fascinated by technology by new stuff and I met Marina in University and immediately fell in love spent two years trying to get her was probably the hardest hardest deal I made that was really really hard to win yeah but now I my my playbook is is full of things I'm just kidding that like those tools were only used once so we started working together at Cisco I was a sales guy I hated being a sales guy but that taught me a lot I I was I was an SDR so I was doing 100 cold calls a day then we went to get our master's degree together got back and then then we got into startups a lot of our friends were starting new companies and they invited me to help one and I was doing Finance for them and a little bit of product engineering and we're raising money and we met a guy who was a founder of a unicorn company back then it was not a unicorn but it was doing really really well it's called kiwi it's now public on NASDAQ and he wanted to invest but then after I think three or four meetings he decided against investing but he he approached me with a job offer he said like I'm I'm starting a venture capital firm nothing is nothing is decided nothing's done yet it's just an idea but like you want to come and and and join as a first employee and I immediately said yes I called my boss

the next morning said that not coming to to work and I'm going to just like finish all of my stuff in in a week or so and and you know pass it to on other people back then Marina was pregnant we just got married and it was it was a rough decision because basically building something new like no salary expectations it's just like building a venture firm from scratch in Russia where there were very very few Venture firms I think at that time we were like number five institutional VC firm and it was just catching fire it was the time it was about 2009 20 early 2010 I think Yandex was still not public kiwi was not public I don't think any Russian tech companies were public Russian internet and mail group was the first one to to be going that way and Yuri Milner was a huge inspiration so he was doing a lot of VC deals in Russia he introduced this concept that you can invest in a company and sign a deal on a single page if you like it because his idea was that if if the company is good then there's going to be an extra on the funding and they're going to be like a big firm with you know fancy lawyers and then they're going to do it all right but if if it's a it's a bad company why waste paper and I learned a lot from that and we had a few LPS who invested in our fund who were backing Yuri Milner too and like this way we got a little bit opportunity to learn from like what they were doing what we were doing so we invested we raised a firm with 120 mil

under management we invested in I think 18 deals and we were very lucky not only because we were you know picking the right companies but also we were just in the right place in the right time so we picked a few companies that became unicorns so two companies have become unicorns from that portfolio two two more companies are like one got acquired at 500 mil another one is still private but probably around 500 mil valuation so really really good portfolio very few companies got R off have actually like most of them got acquired most of them paid the good returns and in 2014 what what happened is is is is everything changed so we were doing really well I was in charge of of our advertising technology portfolio and that's how I fell in love with machine learning because adtec was one of the first areas where people started using machine learning like for search and search ads and I was at the helm of a company that we invested in called s pooled so we put together seven companies merged them into one holding company they put me as the group CEO probably because my English was the best but I don't know why else and I was I was doing a Road Show for I think about six months I was I was doing a pre-ipo road show to try to like get this company that nobody has ever heard of but was making 150 million in revenue and like 30 million in net profit growing like crazy was basically servicing hundreds of thousands of small businesses needs for for online ads wanted to put this company on the map on the global map to get a reputable investor because we were one

and only investors in thatan Company the company got bootstrap to profitability and then they basically offered to sell a shares because they wanted to go public they wanted to our expertise on you know how to how to build how to build governance and we got a really good round we got a term from FR Templeton they offered us like a hefty sum of money it was both primaries and secondaries it was almost a unicorn valuation and and then and then Crimea happened so the Crimean referendum and Putin took Crimea as a part of Russia and Franklin Templeton pulled back that was like the first you know First Signal we didn't give up we kept fighting so we we found another investor that would invest that was an Italian group together with a with a Russian Bank and another six months and we were just about to sign the deal and then mh17 happens the the boing that got Dawn by by the rebels and and basically this Bank appears on the sanctions list so the deal falls apart again so we we we decide against taking money from a sanctioned Bank and eventually Marina and I regroup and were like what is happening what is what is what is really the perspective here so try to look 10 years ahead we figured that Putin's number one priority is maintaining power and this is a sort of a priority that basically sacrificed is every other possible priority so will there be a VC Market will will there be like a free economy will there be you know like U Western investment probably not and we were thinking that after this like if we do this round if we do this IPO for this company will be

raising our second fund and the fund is something that you raise for like 10 years you want to build something for 10 years in in this environment in this economy with this trend probably not so we just decided okay we achieved quite a lot we're in a very nice place but it's probably a better idea to cut the like just to right off the losses and start everything from scratch just Green Field and that we did like a we were very liquid back at the time so I'm like we're still people in VC are very liquid and like on paper we're probably considered wealthy but in like in liquid cash we we can you know barely afford stuff so we we had maybe 100 100K well it not it's not like barely AFF stuff but that's like what was all our savings and we're like okay so we're not going to make any money for a while so let's let's do smart choices and the first choice we made was to pick number two most expensive zip code in the US to move in smart speaking of smart choices but actually it was a very smart choice because it gave us immediate access to some Network to start building with with with with with awesome people we got our daughter into school and when we went to one of the first school auction parties more just you know talking to people introducing ourselves like hey we like Nick and Marina would do startups with do early stage VC and people would respond like hi I'm John I'm like I'm I do VC hi I'm Helen I'm an angel investor and like hi Mary I do startups and everybody in the room was in VC or

an angel investor and and we're like wow in Russia we were like five firms and entrepreneurs Founders would come to us and would pit us and here the whole thing is upside down and we're like wow we gotta figure out what what do we do how do we stand out how do we how do we find deals that would take you know our money and then like we would need to if we build another firm we would need to get pursu investors first of all we' need to pursuade investors that in this environment this Market were able to win the deals we able to find the deals because like all of our track record in Russia does not matter one of the about 2015 okay so early 15 and then we like finally moved with with you know like with kids and our dog in September 2015 and that was an incredible experience because it was super hard I thought that we're accomplished well none of our track record matter people didn't know the names of the companies we work with people didn't know the names of the LPS we work with like our well a few of our previous LPS were ready to back us but they needed a thesis they needed something like because you can just invest in in in a couple and it was a hard time figuring out how Silicon Valley worked but in three months time we hit the you know the DIN and Krueger effect D and Krueger curve is basically when when you when you start learning something in the very first like three four months you get this idea that you are now the best that you know everything that's a super easy and then all

of the sudden you experience complexity and that complexity you know throws you off your feet but when we just figured out when we when I thought that I like I know it all we found an app that was looking really really good it was an app that replaced your face with a mask with basally they didn't replace it it put the mask on top of your face and was a very new app we had 500 users and morina just returned from U from a vasana so we were going through like very very hard times morina tried the buing for this first time was very hard than her and but she came back and and she she talked to me and she said hey so out of all things out of all projects that you're trying to run at the same time trying to make money what is the single one that like makes you happy like makes you go and I was like wow this app is like it's it's super small it's it's a toy there're there like there's no money in it there's no Revenue I I doubt there's going to be Revenue soon but I just love working with the team and I I love working with the app so she said yeah like let's let's focus on this full-time and we dropped everything we were doing we put everything else on pause and we just focused on this app and worked with them and the app got got bigger and it got bigger and it got bigger and in three months we were at 30 million users and we were becoming like a worldwide Sensation that was masquerade used at the red carpet for the Oscars it was on Jimmy kiml

live show it was it wasn't the news daily and and then Twitter approached to aquus and and then Facebook well not approached I'm like I I figured that if Twitter wants to buy us there must be other companies so in order to get a better price we need to create a competitive timed process so I started trying to find you know ins and outs in Google Facebook other companies trying to talk to people I think out of first 10 contacts I made in in Facebook first 10 said no like why would we want to talk to you guys you like a small startup we're a huge corporation and then number 11 said hey actually I'm a big fan of the app and I think I know who who would want to buy it like which team would want to buy it inside Facebook so it's funny how that really taught me a lot that you know every time in a corporation you cannot really speak to the corporation it can only speak to a few people in the corporation that have fragmented knowledge because number if if I didn't if I gave up after like 10 times we wouldn't get that deal and and then eventually that got to the Corp daav and and their Corb DAV was tracking us and Zuckerberg was was a user and and they acquired a masquerade and that basically gave us this really gave us this Foundation of where to build from because all of a sudden we had a deal in Silicon Valley that everybody heard of we we had some local names that people recognized and we've finally got some track record and the rest is history very cool I love that story and when what year

was this masquerade thing when you sold it March 2016 yeah okay so so literally within about a year or so since you came so U that's that's a massive success so Marina you mentioned that you were going to tell us a little bit about the point of view how you guys are different what is it that makes your Venture Capital firm different what's what's the unique thing about your approach yeah U first of all in spite of the fact that we both like have similar background with Nick we both have Financial degree and business degree but still we have like similar degree we have super different set of skills and also we have different like point of views on a lot of things so after this success of masc that Nick mentioned we that okay looks like we are here in Silicon valy and finally we cracked how it's working and we understand everything so the truth was it's not it's more complicated and after this success it was a long road of learning some fails and minor successes that was a like full cycle of venture fir when we're trying to learn okay how it's working and based on all this experience we realize that we are right now on this incredible time when everything changing is so fast and more and more people getting involved into the venture capital and venture capital was always like a power that can like push things and move like set Trends but right now venture capital is democratizing because more and more people with no like Focus just in Venture Capital involved in it more more Angels more Founders investing in other Founders we were always believe in in the power of community and we realized that

if we put this community thing as a foundation of venture capital and really try to make it work so we really try to make work how Community can really help startups probably that would be something very important so so tell me more about how you are building that Community is it is it like you you thought we were going to build a community of all the founders that we have invested in and bring them together where is the community is it how do you bring the community together is it is it through events or or what else so I would say like I our VC fund based on like couple of pillars the first one is their as as I mentioned is a community and the second one is our is our approach how we build in so we we seen our Venture Capital firm as a product so we all have like we have the similar metrics as a products in the startups so we're trying to iterate look through lots of hypothesis in the way how we building it and can you say a little bit more about community so I just wanted to maybe talk a little bit about how it came together because it it it is not something that we dreamed of it's it's a it's a result of an evolutionary process where it it kind of came came out organically so in between masquerade and now we also did another company like and then we raised a fund and then the fund did pretty well and then we sold the fund because we were not agreeing with with our partner on like where to take it next and we started a company we started a startup we so were

Founders for four years raised a bunch of money I think total was like 16 something million and the company got acquired after after we raised series a three times company called Cherry Labs we did we did AI cameras that understood what people do in video and after all that we were thinking what do we do next like we got a bunch of money so we have maybe like 3 40 years runway in Silicon Valley which is I mean like a lot because this place is damn expensive but we have this you know safety net that is gives us huge privilege because very very few people have it and we like we we came from not having any safety net and we figured that it gives you an incredible ability to try new stuff that would otherwise be too risky to try and I was thinking I'd be mad at myself when I'm old that we haven't tried you know crazy stuff so I I was thinking maybe Space Foundation something like this and we turned to what we really love and what Marina said is building products and also investing in startups so how do we combine both we're like my first idea was that let let's do let's do a product for VC firms that we that would they use to you know like coin vest but they so something let's let's figure it out so I started talking to GPS of other firms so we talked I think about about a 100 GPS trying to just you know like friendly talks not interviews not you know ask your mom kind of stuff but we're trying to figure out what is their pain and what we figured out is their pain is that they

are the bottleneck they're they cannot scale themselves so basically every small firm performs better than bigger firms because it's easier to deploy money and then you can really really focus in finding winners against deploying but every small firm wants to become a big firm so management fees are not tied and then as they become big firms they get institutional LPS that are not very useful for investing in early stage and the partners are very lonely in terms of like they are the only ones who carry the burden off you know helping the founders with everything and they take the ultimate responsibility I mean like and if they're successful it's not really their successes is the founder success we're like how do we how do we Sol this biggest bottom lack off VC Partners being not scalable how do we scale a VC partner that we would like either and how do we feed scaling VC Partners within like a small amount of management fees What would F would need to find crazy people who would want to work for free or like nearly for free who would spend a lot of time on helping startups who would have an incredible expertise like level of expertise that they would either be very very good Engineers or very good product people or great investors we would need like very skillful people to work nearly for free and spend a lot of time helping startups and then you know what we figured that there are people like this there actually 643,000 people in the US that do this that is the number of angels registered on angelist so we were like okay angels are the best investors they just don't have the leverage of a toolbox they don't

have the you know they don't have analysts they cannot really do like 360 due deals they're usually very very good at do due diligence is like one area where their expertise lies they don't have the leverage of capital they cannot pull more Capital than they have and and then they don't have the community so why don't we like keep doing what what what we're doing and that at that time we were basically investing like Marina and Nick plus friends investing in startups just on autopilot because this is what we've always been doing as Angels and then I think we one one deal wrote like 20 checks into one company from from different Angels because they would approach us and say hey I trust you a lot like you are finding great deals just bug me when there's something I can do personally for this company but like otherwise just like feel free to send me invoices like we'll we just send me the wiring details and like I'll basically invest every everywhere that you invest and then we figured how do we make it institutional so this is this is how we we came so what Marina said is that it's a product and it's a community of angels who are incredibly helpful to portfolio startups and this Angels they they become Venture Partners through bringing in New Deals or working with existing deals and that we we share cared interest with them so like the whole thing works more as a collective other than a company I love it it's it's such a such a great story so tell me a little bit about that angel community so so right now are these angels like co-investing with you or so you have your LPS

that's separate but you also have a community of angels so so one of the things that you are basically is giving you Leverage is that you say once you in choose a startup to invest in you also have a network of angels that are co-investing is that right so we invest as a fund we have 100 20 investors that subscribe to our fund it's a rolling fund on angelist which basically means that every quarter that's a new vehicle and people invest similar checks in every vehicle so let's say let's say there's an engineer who works at Netflix and invest in startups like you know like like supporting Founders is helpful with recommending more Engineers so they write us a check like would be probably 30 40,000 bucks a quarter so like 120 150 a year and that would be like their total investment with with the fund and within every quarter we would do 7 n sometimes 15 like last last quarter was crazy deals with startups and follow ones into startups that we already invested and now we would look for clues of how can we be helpful to the startups with our community based on their on on their updates so marinas built this beautiful system that basically looks into whatever our portfolio companies are telling us and tries to use gp4 to figure out how we can help so it looks it has this context of all all of our LPS expertise and helps us pick who to approach and then we approach this person say hey you might be able to help this company with this and that do you want an intro with a founder and then and then we approach the founder and say hey did this LP really

help you and if they say yep they did then we share a little bit of cared interest with that LP I love it so on that note actually just like how you guys use gp4 or like all the different tools that that you have used to essentially help a smaller fund become almost as powerful as you know a bigger Fund in a similar way it strikes me that a lot of startups come to us looking for investment because we are building this big network of investors so they come to us and say like I have this idea and I want to raise money for it and a lot of times when I look at their idea I feel like in many cases they can definitely get to an MVP without any initial investment or minimum investment and and then when I look at like how they can grow it it seems to me that the need for funding it's probably not as much as it used to be like there's so much more that you can do with technologies that with the smaller teams but but in many cases startups come to me and they still have the same mentality of that the kind of like like I asked them how much are you looking to raise and they're like oh I'm looking to raise three to five million you know and they don't have a revenue EV so talk to me a little bit about your observation of is it true is my observation true that I feel like people don't need as much money to build interesting profitable startups and and then if you think that is true then we can talk about what is the implications of that for Venture Capital but

yeah first first things first is that observation true I do think that your observation is true but I don't think it's new I think it's it's just the the industry is getting getting back to where it was and if you remember I don't know if you if if the listeners remember but the first batches of white Dominator they were investing they were first money in they were investing in companies that had you know like two Founders in the dog and a little bit of ambition and they were able to get to their first revenue and that was normal like then now well not now like 2021 yator would be investing in a company that has already raised like their preed round and there's still pre-revenue and I think a bunch of things go less there so first of all engineers and like getting employees became super super expensive in 2021 everybody was trying to fight for Workforce Google and Microsoft and and Facebook were paying crazy amount of money so so there was like there were startups that were focused uniquely on how to hire the best Engineers how to win the competition for the best engineers and and now it's no longer the case so like now we're back to let's say 20 17 where it's it's a little bit more normal where you can start building something and then you can because the technology is moving so fast that there are always new opportunity Windows opening for you know small teams to get into something and get their first revenue and that get their like first couple of customers before they have to raise anything AI makes it all possible not only by you know giving people tools to build because everybody's suddenly

way more productive but also by constantly keeping these new opportunities open so this this is really I think it's a nice vintage for startups so companies that were started in 2023 2024 are probably going to be massively successful I think Fortune 500 is going to be dramatically different than 10 years and a lot of companies that were started today will be members of it yeah definitely I I agree so when people come to us and are looking for three million five million to get started I will show them this video right this this interview and say look maybe you don't that much so what is tell me a little bit about the the how how you see things unfolding 2024 so you talked a bit about you know how 2021 was was different and and maybe Marina if you want to jump jump in here and talk a little bit about that 2024 what's the outlook for startups are are we finding a middle ground you know 2021 was crazy I raised at that time and and things have changed quite a lot so so is 2024 going to be better worse than 2023 I was recently talking at Venture Summit in Boston so there were a lot of talks about how the market is finally invest in investor favor so not not so found founder friendly as it was before as it was in 2021 but like I I came from Silicon Valley where all this eii bom is happening and I wouldn't say that it's so friendly for investor right now for us we still competing we still see this huge numbers and crazy evaluations it was nice to see how it's different outside of our silicon Val bubble so we still feel

that we will have this financial constraints so startups will still have to practice Financial discipline do more with less workus more on distribution and yeah like iterate faster to actually to find their product Market fate and to find Their audience doesn't matter like what industry it is with AI in which we are mostly working on I would say we still have we see that like some of the startups need more money three five Millions just in order to start because like especially but when you're doing something with a huge research you need more resources for that so the trend will continue but don't feel that the interest rates will will go up it will stabilize probably on the same amount so it it will dictate the the market conditions I would say we will continue the trend that we had in 2023 we probably with like more fate that it's going to be better but it's it's it's it's it's got to be like difficult year for sure is in my opinion a difficult year mostly for startups or for investors so because the the market is changing and we had to align on lots of things and and we have actually both as investor we also have to reink the way we are doing things yeah yeah okay so as we are coming towards the end of the conversation there I have so many more questions but one of the things that I wanted to ask you what do you think the future of venture capital going to look like in about say five years 5 to 10 years because I I just have this sense that maybe things are changing so radically that maybe in the next three five 10 years it may

not look the same like to a point that maybe the industry may not even be there quite the same way that it is right now because of the fractionalization of Technology and the fact that you wake up in the morning and there's like some completely radically new technology that has come up that that makes it possible for people to develop products and services in ways that are really different and also then there is the big corporations that you know then then you you get something like open AI comes in and and completely wipes out so many things when I think about a lot of products and services in technology that I used to use or that I still see out there I see more and more a centralization of those in that you know the big corporations like Adobe like Amazon Google Etc that they are going to compete with each other integrating these Technologies into their products and services to a point that there's almost not a need for like a smaller products to be developed so I don't know how that impacts the future of venture capital do you think that venture capital in the next 5 to 10 years will still look something like this and if not what what would it look like I mean I know that obviously you don't have a crystal ball but but like do you ever sit down like when do you meditate go for a walk and think you know what's the future of vure caps are going to look like or constantly thinking about this because every time we raise the fund it's 10 years into the future so we need to figure out like what what this 10 years are going to look

like and of course we don't have a crystal wall but we were as you said in the beginning we're opinionated people we don't have an opinion that people Founders will always want to build new things start start companies build new technologies and there is no better way to distribute Innovation there's no better way to back Founders as as Venture Capital Venture Capital will inevitably evolve it will become something something better that is better aligned to help companies grow that support them and grow bigger maybe it's going to be more entrepreneurial maybe it's going to be more backed by the incumbents the companies that are already out there like Google and Facebook and you know Nvidia and meta and Microsoft maybe that's going to be some conversions of the two what don't know will the 220 formula go the like 2% management fees per year 20% carried interest probably also going to change there's a huge wave of Venture Builders coming in there's a huge wave of solo GPS there's a huge wave of like do with GPS but what what happens right now is that small GPS inevitably want to institutionalize because like it hurts when you lose a deal because they don't have a brand name because you don't have like an team because you don't have resources you see other GPS have a large budget you know sometimes even for things that's like making awesome parties and you know big big events and and then you're like oh we're we're having to you know we're having to be extra Scrapy to to be that efficient and everybody wants to become bigger so maybe the formula is going to change and there's going to be budget without compromising the amount of capital because basically

what I don't like is that you have to deploy more Capital to have a bigger budget and that does not translate into more returns for the for for the investors so something is is probably going to be very different but I think the industry is going to be there and the industry is going to become bigger and better because it's the single best way to distribute Innovation and inov the pace of innovation is just all just speeding up yeah I've noticed so many Venture Builders and I want to come to that but one of the main questions I have here is about the exit strategy so I I was was listening to the Allin podcast I'm a big fan of that I don't know if you listen but these guys they're talking about how because of the Adobe figma issue recently that there is more and more we are in a position where that exit through Mees and Acquisitions is becoming harder and harder and therefore one of the only remaining ways for Venture Capital to to achieve return is through IPOs but the market cannot support the number of IPOs that are needed for for all of these Venture Capital firms to recognize and more and more is becoming possible for companies to become profitable but not necessarily profitable to a point of not necessarily becoming big enough to be IPO B so I think yes for the founders they could still get to a place that are that they are profitable but what how does that translate into an exit for Venture Capital so this is where I think the Venture Builder model is very interesting and I think that eventually I always see myself going into a venture capital and and I

think that's what I'm going to do I'm going to you know build something that's more like the Venture Builder U model because with that even if there's no IPO there's ways that you can bring back return for your LPS what's your thoughts on on that statement venture Builders I think are very peculiar model so basically what it means is is when you take a bunch of Founders give them resources and build with them and Venture Builders are usually founded by successful Founders it's a model where you have a bigger concentration and bigger conviction so you're you would spend more time more money on a fewer deals but you would have a bigger share in them then Venture Builders have a very big problem it's like whenever they have a company that is VC beable VC investable they would need to walk back their shareholding and either spin it out and give more shares to the to the CEO or the founder of the Venture Builder has to abandon the Venture Builder and join the company full-time as the new CEO and then basically the shareholding makes sense because to make a company investable by VCS you basically need a very specific way the cap table is formed because nobody would invest in a company on series a that has less than 50% of shares belonging to the founders because like on Ser by series C people would be like oh that's the founder likes motivation so that's that's an interesting thing So eventually what happens because of it is that the Venture Builders produce more profitable companies produce more companies that are okay but fewer companies that are incredible whereas the VC model is more fine-tuned to be looking for potentially big wins for home

runs VC is a home run business so if you score a home run a company that returns your fund 5x alone then you can keep building on top of it and then you can and then basically raise other fun and then you can keep investing in that company like from side Vehicles follow on vehicles opportunity funds and just like make make more money for the LPS so what I think is going to happen is that VC Builders are going to be exclusively focusing on portfolios that are maybe like 10 strong 12 strong and then VC funds would be more focused on investing like 100 deals at early stage and then trying to figure out like which ones they want to find they want to find more in in order to find this outside returns I I this is actually exactly what play we were talking about that like the world need diversity in terms of everything diversity in terms of models approaches in terms of how BC firms can can be built is it like Venture Builder or things like our our fund or like more classical one similar way startups could be could be very very different that like different products need different models we haven't answered your your question on the exit though yes I strongly disagree with with with the statement that that the founders say that it's harder to sell a companies in an m&a it's just harder to sell to Google it's just harder to sell to meta but because these guys are constrained they're under scru they are under scrutiny they canot buy like Google used to be used used to buy like 150 companies a year year like every other day they would buy a new company they

can't anymore well apple is still buying but there's a whole new League of companies that are looking to acquire first of all there's Fortune 500 yes they're less fancy to work for but they're paying good money and then there are more companies that are not paying good money yet because they're small but they're very fancy to work for the new player of growing companies I mean like perplexity or portfolio company has acquire we got we we got onto cap table because they acquired one of our startups they're already acquiring and they're incredibly fun to work with this is this is going to be the new League of Googles and metas of the future 100% yeah that's super interesting that's that's a great observation I'd love to see I mean I am working on getting jamaath from all in on on the Pod and I'd love to hear his reaction to that because as I was listening to them it sounded like you know that they were really kind of worried about like what's happening to this to this space in terms of merges and Acquisitions because the governments are putting more and more of a Kos on you know allowing these to go through and and it's it's making it easier and that IPO is going to be the only the only gaming town and and it's not going to be possible for everybody well very interesting perspectives on on everything I learn so much you know gives me a lot of food for thought and I'm sure it does for other people too super interesting I really appreciate your your time your perspective and I look forward to contining to work with you to you know hang out every time I come to Silicon

Valley and and follow let's hang out yeah definitely following your journey thank you so much for your time and thank you so much for doing this this is incredible I hope you enjoyed this conversation with Nick and Marina Davido be sure to follow them on LinkedIn and stay up to dat with their content and progress don't forget to subscribe to my channel on YouTube or wherever you get your audio podcast so that you don't miss the future episodes it will mean the world to me if you leave a review and share the podcast with others that you think might find it interesting