Most venture capital advice sounds the same: chase big markets, back great founders, and hope for outlier outcomes. Mike MacCombie takes a different approach. He focuses on one question most investors skip: why would a customer say yes immediately?
That lens has shaped his path from teaching middle school students in the Bronx to running Generous Ventures, a pre-seed fund built around behavioral science and distribution-first thinking. His edge is not access or capital. It is how he filters signal from noise.
Here is what matters from the conversation.
The Core Idea: “Of Course” Businesses
Mike looks for companies where the value proposition is so clear that customers do not need convincing. Not “interesting.” Not “worth a pilot.” Immediate adoption.
A simple example from his portfolio: a company that reduces radiology costs by up to 80% for self-insured employers. No heavy sales motion needed. The ROI is obvious.
This is the standard he uses. If a founder needs long explanations, heavy demos, or market education, friction is already too high.
As a founder, you can pressure test this directly:
Can you explain your product in one sentence with a clear economic impact?
Would a buyer forward it to peers without being asked?
Does adoption spread naturally within a network?
If the answer is no, you are likely building a “maybe” product instead of an “of course” one.
Distribution Is the Real Moat
Most early-stage investors say they care about product. Mike prioritizes distribution.
He looks for:
High-trust networks where one customer unlocks many others
Industries with low competitive secrecy, where buyers openly share tools
Built-in referral loops instead of founder-led sales
A strong signal: one customer brings in five more.
He avoids businesses that rely on constant outbound sales or long enterprise cycles without natural expansion. That model can work, but it is slower and more expensive.
For founders, this shifts the focus:
Stop asking “How big is the market?”
Start asking “How fast can this spread?”
Why Most Founders Misprice Their Rounds
One of the clearest mistakes Mike sees is valuation anchoring.
Founders compare themselves to a handful of visible companies and assume similar pricing. That leads to raising too high, too early, with too little margin for error.
He shared a simple contrast:
A company raising modest early rounds with strong fundamentals can scale into a $250M+ valuation cleanly
A company raising aggressively too early must grow perfectly just to justify the next round
The key point: valuation is not a trophy. It is a constraint.
A lower valuation with faster execution often leads to a better outcome than a high valuation with pressure and limited flexibility.
What Actually Matters in Founder Quality
Mike does not optimize for pedigree or storytelling. He looks for patterns in behavior:
1. Speed of learning
Great founders update their thinking weekly. They test, adapt, and move.
2. Clear prioritization
They know what matters and what does not. They can say no without hesitation.
3. Bottoms-up insight
They have either lived the problem or spoken to enough users to understand it deeply.
4. Resilience with direction
Not just persistence, but persistence combined with learning. Grinding without improvement is not enough.
One signal he values: frequent, high-quality updates. Founders who communicate clearly and consistently tend to execute better.
Community Is Not a Buzzword (If Done Right)
Mike has built hundreds of curated groups across founders, investors, and operators. But he is careful with how he frames it.
He does not call himself a “community investor.” He runs a fund that uses communities as leverage.
The difference is execution.
His communities work because they have:
Clear context (what the group is for)
Tight curation (who belongs)
Direct value (what members get)
For example, a group might be:
Only pre-seed investors sharing deals
Only CPG founders discussing operations
Only GPs, no LPs, to avoid pitching behavior
Anything off-topic gets removed immediately. No spam, no self-promotion.
The result: signal stays high.
A Different Model for Venture Capital
Mike also structured his fund differently.
He shares up to 70% of GP carry with LPs who:
Source deals
Help portfolio companies
Support other LPs
This turns LPs into active contributors instead of passive capital.
It also creates a network effect:
More sourcing
Better diligence
More support for founders
For early-stage funds without massive capital, this kind of leverage matters.
The Contrarian Take on Portfolio Strategy
There is an ongoing debate in venture:
High-volume portfolios (100+ companies)
Concentrated portfolios (20–30 companies)
Mike sits in the second camp.
His view:
You do not need massive diversification if you are disciplined
A focused portfolio allows deeper support and stronger conviction
A well-chosen company can return the entire fund
The tradeoff is clear. It is harder to execute, but it allows for higher engagement and clearer decision-making.
The Biggest Mistake Investors Make
One belief he rejects completely: that other investors know better.
He has seen strong companies passed on early, then oversubscribed later. The signal was always there. The market just missed it.
This leads to herd behavior:
Investors follow brand names
They chase momentum instead of conviction
They optimize for safety instead of upside
His approach is simpler:
Understand the fundamentals
Make your own decision
Accept that you will be wrong often
But when you are right, it matters.
Final Thought
Mike’s long-term goal is ambitious: become the first person founders and investors think of when it comes to pre-seed deal flow.
Not by controlling access, but by creating so much value that going through him becomes the obvious choice.
That idea ties back to everything in this conversation.
The best companies, the best founders, and the best investors all share one trait:
They make the right decision feel obvious.
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Chapters:
00:01 Introduction and Guest Background
00:32 Mike’s Origin Story and Early Career
01:29 Transition from Teaching to Venture Capital
02:37 Building Communities and Entering VC
03:50 Fund Strategy and Investment Thesis
05:02 Evaluating Distribution and Market Dynamics
06:05 Customer Concentration and Market Size
07:15 Behavioral Science in Venture Investing
09:06 Lessons from Early VC Experience
10:47 Founder Traits and Decision-Making
11:42 Follow-On Strategy and Portfolio Management
12:40 Community as a Competitive Advantage
14:32 Fund Structure and LP Incentives
17:02 Building and Managing High-Value Communities
19:53 Experiments in Founder-Investor Connections
22:21 Personal Story and Resilience
25:14 Evaluating Startup Potential and Risk
27:51 Portfolio Strategy and Diversification Debate
31:56 Investment Philosophy and Decision Frameworks
34:26 Founder Mistakes in Fundraising
36:42 Secondary Markets and Liquidity Strategy
39:28 Founder Priorities and Non-Negotiables
41:38 Learning, Reflection, and Continuous Improvement
44:16 Network Effects and Deal Flow Growth
47:00 Identifying High-Potential Founders
49:31 Changes in Venture Capital Landscape
51:23 Staying Relevant as an Emerging VC
53:25 Tools, Systems, and Personal Workflow
55:16 Vision for the Future
56:54 Rapid Fire Questions and Closing
Transcript
Brian Bell (00:00:56): hey everyone welcome back to the ignite podcast today we’re thrilled to have Mike McCombie on the mic he is an investor community builder and behavioral scientist enthusiast based in New York City Mike has spent years helping founders navigate the early stages of company building from entering at Techstars to investing with next-gen venture partners and building venture communities across the startup ecosystem, which is how I got connected to Mike in the first place. So we’re happy to have him on. Thanks for coming on, Mike. My pleasure. Thanks for having me on here. So I’d love to start with your origin story. What’s your background?
Mike MacCombie (00:01:25): I did not expect to be in venture catalog. I can say that much I am the son of two child developmental psychologists who became a teacher to middle school students with special needs in the Bronx for four years then became a behavior science based consultant and then I joined a VC fund built out their ecosystem and decided to start my own fund after that so I didn’t catch it you were teaching in the Bronx you said teaching in the Bronx students with special needs in middle school so that makes I work about seven days a week on this role this is nothing in terms of the emotional labor compared to what I had back in the day so this is relatively straightforward
Brian Bell (00:01:56): Yeah, I taught in teaching fellows program when I washed out of Wall Street 20 years ago. So I was taking the, I forget which train it was, it was probably the sixth train. I was in the Upper East Side. I taught a semester of math in high school and I was like, ah, this isn’t for me.
Mike MacCombie (00:02:08): So I could just imagine. It is a particular personality and mindset to go into teaching. I could say that for sure.
Brian Bell (00:02:14): Yeah, that’s amazing. And then how did you land a gig in venture? I mean, that’s pretty impressive. It’s hard to do.
Mike MacCombie (00:02:20): Took some time. So you can imagine being a teacher trying to get into tech, you get a lot of eyes glazing over and saying, oh, maybe you could get a customer success job at an ed tech startup or something. And I said, well, that’s not what we’re doing. So I ended up hosting a large number of events for people where it was actually set up in a way that it wasn’t about networking. So it was curated by personality for positive, pleasant, trusting, generous, and open-minded people. Couldn’t bring business cards, couldn’t talk about work for the first question, and you couldn’t move on from a conversation just because they didn’t have anything professionally in line with you. So that event for 55, 60 events across from 20, 16 or so until 2019, I guess we’re going to 2020. And I built a bunch of other events. And so I got really good at ecosystem building. And I met a firm that was looking to hire somebody as an ecosystem builder. So I sort of went in on a functional expertise that built me into getting exposure to the investing side. and then that got me into the investing way in the other direction where now I’m running my own fund.
Brian Bell (00:03:15): That’s amazing. And is this your, what fund number are you on? What’s the thesis and stuff like that?
Mike MacCombie (00:03:20): Yeah, so I’m on fund two. Fund one was an extremely stealthy $3 million fund investing in priests and seed. The thesis for me is I spent two careers finding out what we get people to say yes, of course, without much friction, without much pain, and getting them to remember, to share, and to act. And so taking the same thesis, I said, okay, where are the companies where we actually can get an of course decision from customers? So when I say my fund is focused on is finding the truffles, places and ecosystems where there’s dense value, clear customer demand, distribution-led businesses that are able to ramp up their go-to-market strategy with very lean expenditure, basically own their ecosystem. I focus a lot on vertical-specific AI, and I’m not talking legal and health, but saying radiology, food safety, simulated medical education. The two companies in my second fund so far is an AI data layer for animal health and customs compliance for the supply chain. So I go for very specific ecosystems where I believe somebody can own it and build up the data, the orchestration layer, and or the embedded fintech pipelines that allows them to avoid anthropification over time.
rian Bell (00:03:24): I love that I guess the word I would use is category defining I was a category manager at AWS and Microsoft I ran all the categories and so I borrowed that kind of term is that kind of how you think about it as like an ecosystem I’d say owning
Mike MacCombie (00:04:35): the ecosystem you might not be defined in the category you might be the second player in but if you can completely own the ecosystem by getting to everybody faster there was a company I was looking at in 911 dispatch calls there was a company way ahead of them but they actually found a go-to-market strategy that was faster to get in to own all the customers before the other ones could get there There’s a company that I’m looking at investing in a space where there’s a competitor that’s raised at a half billion dollar valuation, but that’s on 700 customers and this one has distribution leverage to 36,000.
Brian Bell (00:05:01): Revenue multiple on the 500, do you know? About a 10x.
Mike MacCombie (00:05:05): Okay, that’s not too bad. Not unreasonable. But again, that’s going off of a 700 base. So it’s sort of where somebody can own the distribution and own the ecosystem. They don’t have to be the first one, they have to be the one that has the most.
Brian Bell (00:05:16): How do you assess this? This is something I kind of struggle with. And it’s a question I always ask founders as I interview them. It’s like, hey, what’s your distribution wedge? How do you assess that as an investor?
Mike MacCombie (00:05:24): So I look at a few things. I think about why people will say yes across the board. And it’s usually thinking about the competitive dynamics within an industry or thinking about the sort of social sharing dynamics. So I usually look at high trust, high velocity or high social proof customer networks, meaning if one is in of any category, the rest will come in. Or if one big name is in, all the other names will come in. or they have an abundant mindset when it comes to sharing who they use because there’s not a hyper-competitiveness between each of them. So if we’re looking at, for example, food safety, nobody’s really going to try to say, hey, we’re not going to share with you how we keep our food safe. They say, yeah, this is what we use. This is great. We recommend it. So it’s a lot of an abundant mindset when it comes to the ecosystem. I also look for high referral coefficients rather than founder-led sales and hand-to-hand combat. So I’m looking at a combination of ACV sales cycles and sort of touch requirements in order for somebody to get that customer through the pipeline. Ideally, the perfect case is
Brian Bell (00:06:21): How do you think about that in terms of buyer concentration? I was just looking at a railroad startup this morning where there’s like six big railroads and then there’s like maybe like a hundred more small ones and so it’s a pretty concentrated industry. Would that kind of turn you off as an investor?
Mike MacCombie (00:06:34): I don’t mind customer concentration if the contract sizes are big enough. I think the one that we’re both talking about, the revenue didn’t have a way of scaling exponentially after the first customers. In fact, when you look at the distance from the rail stations, it actually decreased. So it was a very geoproximate way of looking at how they got their customers. Customer concentration, I don’t mind as long as it’s big enough. So I’ve had companies that have sold to the government. I have companies that sell to states. As long as there’s a play where either it’s a large enough contract that their cash flow is abundant or there’s a data play where somebody else wants to acquire them for their building. So I prefer not to have it be somewhere where there’s five total customers. But if there’s a long enough tail or a big enough contract size, it’s not a stress point for me.
Brian Bell (00:07:18): So what is the behavioral science background and how do you apply that today in venture capital?
Mike MacCombie (00:07:23): Well, for me, it’s very basic first principles thinking. Instead of saying, oh, this founder’s great, they had a background in this, I’m saying, okay, what is the actual reason somebody will buy? Why would they use it? Why is it an obvious business case for them as approximate to revenue or approximate to savings. And so it’s really, it’s a way of discerning away all of the fluff. My companies don’t need hype to succeed because their value prop is clear enough and apparent enough to the customers. So my best performing company, my first fund was in the radiology space. They had no press until their series A. And I can’t say the numbers, but they are increasingly growing even on an absolute basis without really needing any hype. because their value prompt was, we can cut your cost of imaging spend by 80% if you’re a self-insured employer. You don’t really need to have a lot of argument for it. So it’s getting to the fundamentals. I think the right companies are not trying to fight friction. They’re not trying to use PLG to get in and sort of prove their case out.
Brian Bell (00:08:55): That’s amazing what did you pick up I mean you’ve picked up a lot of how to’s it sounds like on investing from your early experience because you kind of if I understand it correctly you were I would say a lot of my learning was self-taught, but I think I’m grateful that I had a lot of reps and looks at where we saw successes and where we saw failures. And the companies where there was the most clear value proposition from the beginning
Mike MacCombie (00:09:35): saying we do this fundamental thing that you absolutely need to do at a cost-efficient basis. That’s where they go. I think a lot of the things that I’ve learned lessons from across the board from all of my experiences play in. I do not follow on to save a company. I follow on if I think that company has a higher potential than anything else. I do not chase good money after bad I do not try to stick to a pure rule evaluation if I think a company could still achieve massive returns then I will move to that company and put money in it’s sort of seeing enough reps other things I’ve seen is a founder having a A deep passion and inability to run through walls is difficult if they don’t have high resilience or high focus. So I’d look for the companies that can cockroach it out if they need to, that have high iterative speed and that are learning faster than I could teach them anything or learn myself as they go through. The companies where it just feels like every update they’ve learned something new and they are completely self-sufficient, but they also know how to take leverage of the things going from their investors and from their supporters.
Brian Bell (00:10:25): Yeah, that’s when you know you’ve made the right choice, right? When you’re getting the monthly or quarterly updates, you’re like, these guys don’t need any help. I don’t even know.
Mike MacCombie (00:10:32): There’s one company in my first fund that was amazing at their customer updates. They knew how to ask for help, but they made it so ridiculously That’s so easy and so particularly pointed that you say, well, this is a one-click solution to help them. They would shadow the people that did the work. So I don’t think it’s the ones that don’t need the help. I think it’s the ones that know how to properly leverage the help that they can get or the help that is available. Somebody might be completely independent, but they could still find customer serendipity. They could still find talent serendipity as they go through. Yeah, I love the ones that are completely independent, but if I can still help, I want to make sure that I’m adding to what they can get in enterprise value.
Brian Bell (00:11:03): Yeah, that makes sense. I want to drill in on the follow-on. So on a $3 million fund, I’m guessing you weren’t reserving much capital. How much did you decide to reserve, if any at all?
Mike MacCombie (00:11:13): I ended up investing in only five companies in follow-on. One of them I tripled down on. I actually basically quintupled my total dollars invested into the company. I’m very grateful that that’s my best performing company that theoretically could return my fund about 8x if it goes as I think it will. So I I was very conservative I say I follow on when a dollar’s into that company is a better bet than a fresh new company either based on the information asymmetry that I have or simply at the price it is it’s being underappreciated or at the trajectory that I think it can take at some point you know if you’re looking at a hundred million valuation on eight million revenue that’s good but how much they ramp up is simply dependent on what you think they can get to so I’m conservative of follow-ons frankly because I’m grateful to see a lot of good opportunities as first checks and unless I’m deeply convicted and nobody else is buying in I allow that one to continue But it does make a huge difference when you’ve got a big investment in a company that’s doing well.
Brian Bell (00:12:02): Yeah, that makes sense. So you seem to be following a network-driven model for investing. You know, a lot of investors focus on capital, but you focus on community. Why do you think community is such an underappreciated asset in VC?
Mike MacCombie (00:12:14): Well, I will call one thing out. I think I’ve seen a lot of community-driven and it sounds fluffy. I do not ever call myself a community driven fund. I say I am a fund manager who happens to run a lot of communities that are deeply high leverage for what I do. Because it’s fluffy, I don’t think people see it. If they’re a lead investor, community doesn’t matter as much. You have a few GPs that you share deals with, you take a stab at. For me, because I’m a second check into any company that I do, I take a highly federated approach. So actually the first two companies I’ve done, one there and one there, both came from investor referrals from other companies through communities that I run. And so for me, I don’t mind being the first thought as the second check. I have been the first company, the first check into some companies in the past, but that’s not a necessity. It’s my strategy. Like my fund size is concentrated at a small size, but even as a $10 million fund too, that I’m working on 250K check, it’s usually not going to box somebody out who’s coming in. And so it’s very easy. And I incentivize all my LPs in my second fund to support the companies. I give 70% of my GP carry is up for grabs between me and my LPs. if somebody sources they can get 30% of the carry on that company once the whole fund doesn’t carry if they help they can get 30% if I do no work at all and nobody else helps and if they help other LPs they can get up to another 10% so effectively they are my federated approach of saying look if I have a pricing strategist if I have somebody who is an expert when it comes to alternative lending sources somebody who’s we all get the leverage there and so being on the small side allows me to play well to get into the allocations and to frankly be somebody that they want to come in because I’m providing a lot more leverage for the dollars than most people would
Brian Bell (00:13:44): yeah that’s really cool something you know team ignites in our name we were also network driven part of the reason I want to come have you come on the podcast just to learn from you but it about also just compare notes and I like this idea of sharing carry how do you kind of execute that like what are what’s your who’s your fund admin how do you actually do that at the GP level well there’s a few things
Mike MacCombie (00:14:03): one it’s the incentives are for them to report so the actual data gathering if they don’t report I get to keep it so the incentives are aligned to and there’s a way of Diverting carry into different entities As a portion and at the end of the life of the fund You can basically share out shares of those LLCs That allows you sort of to effectively share the carry Without having to do it all directly AngelList is my fund at the moment They’re fantastic in many ways And they can do deal by deal carry I think They can do deal by deal carry on the sourcing side But it’s hard to do post facto of down the line I want to actually add in some more carry here and there That’s where you sort of think about the shares Diverting into different entities For parts of the carry
Brian Bell (00:14:43): Yeah, I famously broke away from AngelList three years ago because they were cross-marketing to my LPs, competing funds, which I did not like. But I did like their administration. I thought they had really, really good fund up in. I ran my first fund with them, a little rolling fund. Yeah, you can do the deal by deal carry and they just make it really easy, right? It’s just all kind of done for you.
Mike MacCombie (00:15:03): Yeah, it’s very straightforward, especially when I have 229 LPs in Fund 1 and I’m going for 240 in Fund 2. I’m not doing those K1s on my own. I’m not doing the distribution. No, yeah, it’s just too much. It’s the perfect size for me. I don’t need to go larger.
Brian Bell (00:15:15): Yeah, that’s amazing. So you’ve built and hosted hundreds of these events and communities. What separates a community that thrives from one that quietly dies?
Mike MacCombie (00:15:25): Well, I think there’s a few things. The biggest thing, and as fundamental as it is, is setting the proper expectations. I will have communities where I tell people, And I sort of set those I think the other reason that communities, even when expectations are set higher, they don’t function in that way, is because they fail on one of the fundamental three things. You need to either have a very clear context, a very clear curation, or a very clear overt value created from the community. this is where we share pre-seed deals this is where we share best practices for CPG founders it is only these kinds of things that are allowed as soon as people start posting and plugging their own events their own newsletters and saying hey I wrote this article please like it on LinkedIn I delete with an iron fist in terms of like if it doesn’t fit the group and it’s clearly not valuable for everyone to see it gets deleted so at most I see maybe 30 groups a day that are posting I’ve run 322 groups as of right now and so that works in terms of curation it avoids temptation so for example I have a GP focused group no LPs allowed in fact I had one person who was both and they sort of said hey can you let that person go and I have an LP group no GPs allowed because otherwise you’re going to want to go in and directly pitch every single person etc and so having a pure curation provides that everybody’s there for the same reason even having a this is all pre-seed founders no they don’t have enough curation overlap in terms of what’s meaningful CPG founders they talk all the time because they’re all dealing with the exact same issues right And then the last thing is overt value. If I have a group where people are just sharing poker-based events for poker players, that’s overt value. It doesn’t really matter what it is. If I have a group where I’m sharing referral codes for something where everybody gets a discount, it’s overt value. If you have something that’s worthwhile enough If I miss it for more than a few days and it takes forever to catch up on them, I don’t need that either.
Brian Bell (00:17:35): Yeah, I got a lot of these WhatsApp groups as well, including a couple that you’ve set up. And typically I’ll just turn off notifications and every once in a while I’ll dip in there and see what’s going on. But yeah, it’s hard to keep up with the fire hose of everybody’s comments and questions.
Mike MacCombie (00:17:50): Nobody needs to say, I’ll DM you or I’ll be there. No, just DM them or put an emoji on the message and that’s fine
Brian Bell (00:17:56): Yeah, totally. So you’ve run lots of experiments helping founders raise by connecting them with lots of investors like myself, right? I’ve done a couple deals with you over the years now. What inspired those experiments?
Mike MacCombie (00:18:08): I am a big person when it comes to limiting beliefs about what’s possible for So long story short, mom died when I was young, I felt very helpless and I figured out what are all the ways that I can have agency in the world and one of the best things is by people telling me what’s not true and proving that actually people can behave differently. So anytime somebody tells me, oh, people won’t be vulnerable with strangers, disprove that. and mystery trips to other countries without knowing where they’re going. Disprove that. People won’t go to an event if it’s not focused on the industry that they want. Disprove that. So every single one of those is a challenge. And actually I worked at a fund where they pass it with other people. It’s bad signal. I said, well, I don’t claim to be the arbiter of perfection. Everybody has this belief that if you’re a third of the time wrong and a third of the time sort of zombie companies and a third of the time right, you’re good. I don’t assume anybody is the perfect knowledge so I started a group of people shared deals even the ones they’ve passed on I’ve done deals that people have passed on people have done deals I’ve passed on so to say we all underwrite different things I’ve passed on unicorns people have passed on companies of mine that are on the way to be unicorns like we are not that perfect the best thing is people who are true to their game that they are under able to underwrite a portfolio of enough companies that have shots on goal so the long story short my view is tell me something that people can’t do and I’ll say there’s probably a system where we can get them to enjoy doing it
Brian Bell (00:19:19): My mom died when I was young too. I mean, not too young. I was 16, but how old were you?
Mike MacCombie (00:19:23): Eight.
Brian Bell (00:19:24): That’s a little younger. Yeah, my sister was about that age when our mom died. And yeah, it’s hard. I think a lot about like how much that drives and motivates me. And it drove and motivated me so much, you know, to get into the wrong career early in my career. And so I kind of put the cart before the horse and I ended up on Wall Street, like really hitting my life, right? And I was like, you know, I studied for the CFA and... I got there you know I made it I’m making good money and I’ve really hated my life how do you kind of prevent kind of the negative effects of a traumatic event like that and how do you think it motivates you today well I think it’s probably about your narrative of what you’re going to do about the world I think you look at the way that I see superheroes and villains defined as they both go through trauma the villains say I went through it so everybody else should and superheroes say I went through it nobody else should and so it’s a way of saying that I think it’s also how one finds their way through what’s the narrative like I’ve I will admit I’ve probably always been a pretty optimistic person and I will say I was deeply affected by going through what I went through I personally was very grateful that I had a very strong community in my school that came around me when we needed it so I didn’t feel like I was going to be completely alone but I think it’s somebody who’s able to reflect take in appreciate and be grateful for what they have and who are able to say that was terrible What do I do with it? And how do I respond? Rather than saying it was terrible, my life is ruined, nothing else can go. I have navigated more things that are high stress and high cortisol inducing over the life. And every time I realize I’ve still gone through every single time. It may not be perfect, but provided people are alive and that I’m not affecting my health.
Brian Bell (00:20:50): I’ll make it through.
Mike MacCombie (00:20:51): And so I would say psychologically resilience is probably the highest factor of founders in terms of any trait that leads to success. You can have a resilient founder who’s beating their head against the wall and not learning at all, but one who gives it two tries and one who gives it 10, you have an increased likelihood purely by the number of at-bats that somebody’s taking.
Brian Bell (00:21:06): Yeah, it seems to be, it’s not the only defining feature of very resilient founders, but it seems to be very common amongst high performance founders, right? There’s some traumatic experience that they’re overcoming. Something put a chip on their shoulder. And I think, you know, people like us that have been through trauma early in our lives, I think it gives us an edge as investors because I think we can spot it in people a little bit better.
Mike MacCombie (00:21:28): Yeah, I think we can spot it. I think, well, one, we can see it in somebody. I think you can only see other people as deeply as you see yourself. If you haven’t gone through traumatic events, you don’t understand the impact of it. You don’t understand the layers that it takes. And once you’ve reflected enough on yourself, you also are able to see those reflections in somebody else. So if you’ve gone 10 layers DPC 10 if you’ve gone 100 you can see 100 and so that’s one I think two is also there’s a hunger and there’s sort of like a non-negotiability when it comes through it somebody who hasn’t got through much might be they face less and tribulation where they’re they don’t know that they can get through and they don’t know what it looks like to push through and I think the founders and the investors who have gone through that kind of trial know one that they can persist they know two what it means to persist and they also know three like what is worth persisting for once you’ve gone through some part of my language like you’ve gone through some shit you’re very selective about the things that are worth your time and so it’s a it’s a high discernment that comes through too and frankly prioritizing what matters I would say goes into it as well
Brian Bell (00:22:24): Yeah, I love that. One thing that Sam Altman said recently that’s always stuck with me as an investor is when you look at a company, you’re not trying to think about what can go wrong. You’re trying to think about what can go right. That always just stuck with me. What do you think? What do you think of that phrase? Do you agree when you look at a company? Yeah, you’re kind of thinking about the things that go wrong. But if it goes, are you trying to think about, okay, the optimal Rosie scenario, if everything goes to plan and the vision comes to reality, is it like a multi billion dollar company or not? Like, what do you think of that phrase?
Mike MacCombie (00:22:51): I think there’s a way of doing both. I think there’s about eight different ways that founders are underwritten by investors for the profiles of what investors look for. Some go pure traction, some go for pure hustle, some go for pure P&L analysis, some go for pure product. some go for is this a history making idea some go for pedigree some go for distribution some go for first principles every single one of those can be underwritten differently in terms of like East Coast mentalities West Coast mentalities and so for me when I think about it I care I don’t care about the fact that the TAM’s not too small, that they can get to something that’s massive and acquisitively interesting. But I also don’t want them to say like, this is going to be a pure binary bet. I’m not going to do asteroid mining on the moon. I’m not. I looked at a company. I love the founder who was building an underground pipeline for delivery networks, kind of like what Elon was doing, but purely for packages. It was great. That’s a binary bet. It’s not a whole lot of middle ground where you’re going. And as a pre-seed investor who’s not trying to have an insane amount of dilution for a binary bet, I like the companies that are a little bit more capital efficient as they get there. But, like, I have companies in my first fund where I was running concentrated enough checks that I could underwrite to a $200, $300 million valuation and have a fund returner. I’m very grateful that one of those companies is looking at a $2 billion valuation in probably a year or two. Like, okay, we’re We’re happy. So I think if I underwrite you a base case where I need it to survive, but I also am not going to try to go for something that’s just like a good triple or a good double. I say it’s a solid triple with a concentrated enough value. With a concentrated enough check, a triple becomes a home run for you in terms of fund returning. And so that’s why I don’t do Spray and Pray. There are some funds that have 500 companies per portfolio. There’s some that have 70. they’re great funds my approach is I like to focus on the fundamentals get to the first principles and say if I can find 30 companies that are first principles based very interesting targets not only will one I have ones I can hit it but two I don’t feel like I get a billion dollar outcome and say oh man I just really need them to get to 10 billion in return the fund because I’m so spread that’s interesting.
Brian Bell (00:24:45): I think I approached it from a first principles like CFA brain I kind of said okay if I was making a portfolio of early stage bets, like what would be the expected return based on portfolio sizing. Assuming I have average picking ability, average ability to win, average ability to add value, because everybody thinks they’re above average, right? And so the number I came up with is, you know, you actually don’t you don’t asymptote your expected return until you have hundreds of early stage positions. Now, that doesn’t mean you can’t have a concentrated portfolio and win. I just think it’s harder. It’s much, much harder. Especially if you’re someone like you with all these groups and this ecosystem and you’re getting a massive amount of deal flow and you’re having to say no X more than me, right? Because you’re only making 30 bets. That’s 10 per year, call it, right? About one per month.
Mike MacCombie (00:25:36): Well the nice thing is one I’m getting into ones of the early enough valuations where I have that opportunity set and two you’re right like I would love I know funds that I’ve done in-desk approach and they can guarantee like a two to three X but also I know it’s way higher than that never I’ve never like the data I’ve looked at and I’ve pulled a lot of data on this and I’ve written like 10 articles on this I’ve done a lot of research Anybody with over 100 positions in their portfolio has never had under a 10x TVPI fund. Ever. Never happened. Nobody I’ve ever met. And I’ve met like two dozen at this point. They all have like 10x TVPI funds. Interesting. I can think of students. If you find a counterexample, let me know. But I’ve never met anybody and I’ve pulled a lot of research and data on this. If you think about it just mathematically, there’s an expected return of like any particular asset. And then the more assets you add to a portfolio, there’s an emerging quality return. of expected return, depending on how many assets. And there’s an asymptote, right? Like for like public equities, it’s like 40. Like 30 to 40, you’ve kind of asymptoked, you’ve kind of diversified away the market risk. For early stage, it’s like three to 500. That’s where you’ve actually like, there’s no like additional like diversification benefit.
Mike MacCombie (00:26:42): I think it’s also depending on how one’s approaches when it comes to sourcing. So if you have access to every YC company, you will have a good returning fund if you decide to get in every single one, especially if you can get the assets really out.
Brian Bell (00:26:51): Yeah, YC does 800 a year, right? They’re doing 2,400, 3,000 of fund now.
Mike MacCombie (00:26:56): Right? Yeah. But they’re also getting in early enough in terms of their ownership where they can get a meaningful return to them. Like there’s a fund that I know that partners with every accelerator in every studio and gets their companies pretty much at the same terms. They’ll return. I don’t think they’ve had a 10x TVPI fund yet. And I think there are a number of funds in. I’d love to meet those guys But I think you also see I think any angel investor will say you have to have at least 20 bets to have a shot at getting a fund returning portfolio or a portfolio returning portfolio at that point and my view is as a solo GP who is very grateful to have seen about 20,000 companies over time Yeah I could easily do sprinkle checks into a bunch of companies but in terms of where I’m best and I like to provide a lot of leverage for the companies I support for me the right size is that I think when you look at some funds that are massive AUM they have to be a lead check they do not have the time for the board meetings so at some point logistics say take your bets I think you could also point to companies like I think Equal Ventures for example I want to say they have like 15-20 companies per fund and they’re deeply thesis driven and I’m sure their returns are probably doing just fine I would also say I probably don’t think 2048 Ventures is a deeply diversified portfolio they have the particular realms that they go for the view I’ve come across over time is there’s going to be a thousand ways to approach it and I think you can be successful you just have to be really good at your approach and there will also be for every approach will be 100 people. There won’t be 50 that can’t even return the median returns of like we got all the money back. So every strategy can be done successfully. Every strategy can be done poorly. Some might be a little bit more successful, but also they’re harder to implement in terms of one, fundraising and two, sourcing and in terms of three, portfolio support. That doesn’t mean it’s not doable. Like I have a friend who’s a fund manager who also invested in my fund. We both look at each other’s portfolios and say, I would not invest in what you did, but I know why you did it. And he said, I would not invest in what you did, but I know why you did it. So I just learned to say, be true to oneself.
Brian Bell (00:28:41): So a topic you talk about a lot is the founder decision making. Where do behavioral biases show up most often in startup building?
Mike MacCombie (00:28:48): I think there’s a few things. One is external anchoring to context. So if somebody has too many data points of SF side and they say, oh yeah, I should be raising on a 50 mil evaluation pre-product pre-revenue because I know three people who did it. They’re anchoring to an external and local data point rather than saying across the entire network. And I think there’s a lot of decision making of going for the wrong things in the beginning saying what is the proper path of how I raise compared to my revenue profile profitability to reduce the likelihood of me being cut short on my at bats. So I will see companies, they raise too high with too little capital and they don’t figure out that the price you raise it does not matter. My best performing company raised 1.4 million on a 5 million post and then they raised 3 on 18 and then they raised 30 on 250. They’re getting back to the point. I don’t think they’ll need to raise again before the IPO. So the founder took, you know, we’re talking 30% dilution plus 17, so probably 60% dilution, but that’s all probably he’ll need to take. So I think one is the anchoring to that. I think the two is in terms of what they prioritize, being too attached to the solution rather than the problem. They’re stuck in their iteration loops. For example, I can think of a company building an AI pin that you might know about where the founder was too anchored to their own decision making. And I recall from team members saying you could not make a decision without the CEO’s approval, but then the CEO wouldn’t make themselves available for three weeks at a time. So you just were not iterating a product fast enough. And so I’ve seen inability to properly hire and source and delegate teamwork, anchoring to external biases. And I think also not being able to face reality when they say, hey, I’m raising this round slowly. I have a key outcome that requires me raising quickly. And they say, but I can’t raise at a lower valuation. I say, look, you’ll get this raise done in half the time with a 20% cut in your valuation. And making the smart layup of saying, what is the right choice for the health of the business in the long term and the growth that I can achieve?
Brian Bell (00:30:25): Yeah, I remember I was an investor in 2021. Back then I was just running a syndicate. I hadn’t quite launched my fund one yet. And I was seeing these like 50 caps pre-launch, pre-revenue, particularly out of YC, I remember. And I was like, this is crazy. And now I think we’re at a whole new level of crazy in 2026 as we record this.
Mike MacCombie (00:30:44): We are at a level of crazy, but it’s interesting to see because I’ve gotten some feedback from people that have invested my funds saying, like, you’ve got to make sure you’re not too disciplined about price. You’ve got to be willing to go for the ones when it can turn up. Like, yeah, Stripe at $70 million looked pretty aggressive, and now nobody’s regretting getting into Stripe at $70 million. And so I think keeping an opportunity... Right I think it’s fundamentally underwriting to what can this company become and does that justify the price but also some people just completely forget to think two rounds ahead and saying hey if I raise this now what’s going to happen in two raises if I’m expecting if I’m at 50k ARR right now and I expect to be I have to really hope for massive revenue inflection or deep buy-in from convicted investors together.
Brian Bell (00:31:33): I definitely see this in my portfolio because I invest the gamut. I’d invest in the five cap stuff that you’ve talked about, but I also invest in the 30, 40, 50 cap stuff out of YC because I have the two funds. I have a seed fund and a YC fund and I’m investing in both of those parallels. It’s pretty interesting because I’ll go from meeting all the YC founders all raising at 30 caps and they have 5,000 of monthly recurring revenue and then I’ll go meet a company with a million I just put in the offer rate as we’re starting to record this podcast they got a million of ARR at a 12 cap and growing way faster than a lot of YC companies but it’s interesting because I’ve seen this a lot and I have a lot of portfolio companies I am a spray and prayer but that’s why I see a lot right and I see a lot of these you know these 25-30 cap YC companies they raised $300 million Series A’s you know and then they raise a billion Series B or 2 billion Series B I mean if you’ve got a
Mike MacCombie (00:32:26): good secondary strategy Then go for it. If you’re saying, hey, I don’t mind holding it for two rounds and selling it at 10x and do that across every company I’ve got, go for it.
Brian Bell (00:32:34): I’ve been thinking about that. How are you thinking about that as you kind of, you know, your portfolio starts maturing, you start getting some markups? Because I’m sitting on some 20, 30, 40, 50xers, a lot of them, right? And I’m like, okay, it’s 2026. You know, things are getting frothy. How much do I sell when these startups are raising at 200x revenue? I’ll tell you a story. I got into a bunch with my own money back in 2020 and went 33x in like 13, 14 months. I’m like, I should have just sold that, right? Because they raised at like 100x from Tiger and things are great and then they kind of imploded and they’re still around but I don’t think it’s gonna be a 33x it’s kind of impaired at this point but if you know if I would have sold some percentage of that I could have locked in a nice little gain you know so I’m starting to think about that now as you know fun one was a 22 vintage you know fun two to 23 vintage and so on so I’m starting to kind of how are you thinking about that as you look at your portfolio
Mike MacCombie (00:33:29): I think there’s three things to look at when it comes to any company one is trajectory two is future possibility and three is position within a portfolio because if you have a any one of those factors can play a part so like right if the company is far ahead of their revenue valuations and it’s just overpriced that’s one thing and I have a company that was way overpriced but I knew that their revenue was likely going to 50x in the next two years and so I said hey we’ll sell a little bit we’re not going to go for everything because I think I’m going to deeply regret if I do that So I think one is where they’re at right now. I think two is saying, okay, if this is a company that may be a little bit ahead of their skis right now, but I believe it could still get to a Decacorn outcome, I would be a fool to sell too much. I think the third thing is looking at the position of the portfolio. If it is your highest flyer versus, oh, this is my third or fourth place company, it plays a part as well. And so get a look at saying, like, how do I get to a 5X plus? That’s sort of like the baseline of what gets me there. If my best company, I can sell everything to return the fund 3x, but then I don’t have a few followers that have given me the other 2x. And if I think it still has an inflection point ahead of it, I say, okay, we’ll do a little bit. We’re not going to go there. So it’s sort of saying, how much can this contribute to returns amongst the entire portfolio? How much can this contribute to returns given where it’s at right now? And how much can it go beyond? I think when a company is getting at a 40, 50x multiple, I start to look and consider that question. but it really depends I’ve got some companies that I know if they get marked up 10x I will sell all of it and I’ve got some that if they get marked up 100x I’m not selling any of it it really depends on the factor at play of trajectory now trajectory future and position within the portfolio respectively
Brian Bell (00:34:59): Yeah that’s pretty wise you’ve asked founders about their non-negotiables what does that mean I like to see how somebody prioritizes I
Mike MacCombie (00:35:03): I’ve seen way too many founders fail because of them saying, oh, we can do everything. They have too much optimism and trust me, I’ve been the optimistic type and saying, what are the things that you, if you’ve got to cut everything else, what matters most? And if you can’t force rank it, then it’s very hard to make some decisions if you don’t have an operating procedure in your own mind. So like if somebody is non-negotiable on dilution, then I suddenly say they’re going to be too rigid for the market. If they say I’m non-negotiable on bringing our customers deep, immense value. That’s probably more indicative of where I want to be going directionally. They say I’m non-negotiable on a unicorn exit. Then I say, okay, they might hold out for the opportunity of doing something.
Brian Bell (00:35:37): It’s basically saying, what are the priorities and are they straight? And if they,
Mike MacCombie (00:35:41): it’s like when you’re in a relationship, you’ll negotiate on who does this is we’re not going to negotiate on somebody who can rupture and repair in a relationship. And so putting the first things first is deeply important, especially when you are absolutely overwhelmed and you need to prioritize with an abandon.
Brian Bell (00:35:53): Very wise. How did you get so wise for such a young person, no offense? Out of curiosity, how old do you think I am? I don’t know, like 30s?
Mike MacCombie (00:36:02): 37. 37, okay. I’m more older than you. I’ve gotten carded way more times than I would have expected, but I take it as a compliment. Yeah, you look young for your age, yeah. I would say when you run your own fund and you are a high thinker in terms of just repetitiveness of how much like I’ve replayed every deal I’ve done in my head multiple times over to the point where I’m very grateful that most of my LPs I said that my last LP update was 42 pages long and it was an update on every single company roughly about a page each Oh wow Here’s where they’re going right Here’s where they’re going wrong Here’s my take on the company And so I’m able to triangulate across a lot of things I triangulate a lot I have a deep retroactive source of anxiety I’m perfectly fine in the moment But if I think I’m messing up I’m like I’m going to replay it Until I can figure out what do I learn from it So I don’t make the same mistake twice I’m also grateful Both of my parents are psychologists So I’ve always had a little bit of a good metacognition Based context around me I don’t think I’m not going to be single because of a lack of effort I don’t think I’m going to fail because of a lack of effort If I have a lessons learned Or there’s a macro environment factor That’s different But from the youngest age, I always thought that I found the most agency when I learned the most, and so I like to continue doing that. It’s funny, when I tell people the ceiling of my first fund is the floor of my second fund, I mean it genuinely. I expect every company I do, fund one, company one, fund two, company one, I expect company one to be way better than company one, two better than two. And so if I’m getting at this level of returns for fund one, I expect to be at that for fund two just by default.
Brian Bell (00:37:22): That seems to be how it goes in venture, actually. Over time, you do get better, I think, to a certain age. It’s like you look at pop musicians or really great musicians of history. They have that, you know, 10 to 20 year span where they’re just great. Call out the first, you know, four or 5 to 7 funds and then I think like VCs get a little too old and too out of touch you know or maybe they’ve been scarred too much and they kind of get become risk avoidant or something like that maybe the same thing happens with the musicians and they’re seeing It seems to be a kind of a, with venture capital especially, fund after fund, if you’re still in the game, you get better at it.
Mike MacCombie (00:37:59): And why do you think that is? I think there’s a couple things. I think one, there is a hunger. Like it’s very easy to get complacent. You have a couple big winners. I know people at large funds. They have a winner in one company say, great, I don’t care about any of my companies. All of you can shut down and burn out.
Brian Bell (00:38:10): Yeah, I got my taxer and I’m set for life.
Mike MacCombie (00:38:13): Oh, I’ve seen companies that got completely screwed by, frankly, like the Tiger Globals of the world, where they were told to burn, burn, burn, burn, burn, grow. And then they said, yeah, we’re not funding you now that you’ve burned all the money. so one is complacency I think two is beyond that there’s a network information flow effect people who are going through their cohort you know they were the founders at the companies they were the first VCs and everybody that they know for a while there’s a good density of information going there but as everybody ages out some people have kids some people go to operator roles some people decide they don’t want to work in venture anymore some people say hey I’ve got my good I’m going to become a passive investor and other things some people say I want to go to real estate and some people just say hey I’ve got a family now that network that cohort they come in with with that energy density around them loosens up more and more so the only way that happens is if they’re continually repeating the information flows they get in or they’re finding a way to expand outwards of what’s going on around them so for me yeah I have a lot of friends that have gotten married and gone through but I am adding 30 investors a month to my pre-seed deal flow community calls I’m adding probably 50 people to my community groups I’m getting the fresh inflows and I’m building more of an influence It’s sort of funny when I hear a lot of LPs ask, you know, do you maintain? And I say that’s a really fundamental base case. I say, I don’t worry about maintaining because I’m continuously growing.
Brian Bell (00:39:50): Yeah, and I think everything you’re saying is correct, which is, and I want to build on it, which is, you know, over time, I think you get, your network grows as a VC, right? You meet more people, you meet more startups, you back more startups, you add value to the startups, those startups refer you to their friends that are starting startups and I think that that’s why there’s kind of this escalation of ability in venture capital right because like it is just network right it’s just you’re getting more deal flow because you’ve been in the deal flow ecosystem for a long time and so people are just sending you stuff and then you build out your VC community like you’re doing and they send you deals and you’re sending them deals I need to work on the sending LPs deals I haven’t been doing that as well I mean we started as a syndicate so you know I’ve run like probably 200 250 syndicates over the years but I should probably give my LPs opportunities to invest directly I’d ask my founders I guess I’d ask my founders hey do you want me to blast out the deal to all of Team Ignite I can do that you know I haven’t been doing that that’s a good idea
Mike MacCombie (00:40:53): I think there’s a way of going about it that I actually really like is every time I can take a call with somebody, I say I’m wearing two hats. I’m wearing the hat for myself and my fund. I’m wearing a hat for my LPs. And I say, hey, if I think this is interesting enough, I’ll schedule a group call. We’ll get some LPs on and we’ll see if they want to invest. I’m doing six of those calls this week. One we did today, eight investors showed and took questions. And I say to the founders, one, you get to bundle a yes or a no in one call. If it’s 10 no’s, at least you got it done with one call. If it’s 10 yeses, you got that done with one call. And so I value prop that to my LPs of saying, hey, you’re not just investing in me, you’re investing in all the sourcing that I do for your particular interest. And I think people underestimate that. They say, hey, I just want to see the one that they’re doing. I don’t claim perfection. I have deals that people have invested in that I did not do. And so it’s how I work with the LPs that I have. Usually fund-to-funds that are doing it for deal flow, they don’t like that because they say, you’re only going to be good at what you’re actually investing in and what you say yes to and I say then we have a fundamental disagreement because I have companies that my LPs have invested in that I haven’t that have done great and I have companies that I have seen that they’ve done that weren’t even in my wheelhouse that they’ve invested in so yeah I highly recommend it if that’s one’s value prop some people just don’t want it they want the passive returns
Brian Bell (00:42:02): I think it’s I mean I’ve already this podcast has already paid for itself for me anyway is I need to add more of my LPs to my deal flow list so thank you for that idea I will be doing that
Mike MacCombie (00:42:09): Or give them the option to Yeah, like frankly, I love bringing in LPs Like I have somebody who was an early investor in like Galileo and One Medical Any health tech companies like, hey, if you want to join, give some questions They ask way better questions I was looking at a company that was doing a formulation additive to make biomolecules and pharmaceutical products Shelf Stable Without Ever Needing Cold Chain Storage I Would Not Have Had The Deep Questions To Ask He Came In He Was Asking All The Questions I Could Hear His Diligence So It’s Advantageous For Red Teaming It’s Advantageous For Helping And It’s Advantageous For Them Getting Direct Access Which Is Why My LPs I’m Grateful They Like 5x From Their Fund 1 Commitment To The Fund 2 Commitment It’s More Value Than They Would Get From Hiring Their Own Analyst Or Associate Or Principal Or Partner
Brian Bell (00:42:50): That’s Really Smart Really smart. So when you meet a founder for the first time, what signals tell you they might build something meaningful?
Mike MacCombie (00:42:56): I think a few things. One, if I ask them what is making this worth the 10 to 15 years of cortisol inducing emotional labor, they have a reason that’s either deeply curiosity driven or deeply probable. I look for bottoms up customer insight like they’ve either talked with hundreds of customers or they say I’ve been this person I know exactly what I would want and I’m looking to make sure that I have it and I look for the iterative curiosity they say hey we’re going to launch we’re going to give you an update every week of what we’re doing with the pace that it feels like they’re impatient not to get to results but they’re impatient to take action on what they’re learning and so that’s meaningful for me I think also when they have a view as to not just right now but the growth strategy of saying at this stage we would expect to do this and we’re going to roll out to that and they’re making the right decisions of prioritization they say hey I don’t expect this or that I love it when a founder is able to tell me like we’re not doing this thing because of xyz they take a point of view and they take a stand rather than just saying we’re going to own everything I had a founder who said, hey, we’re not doing direct to consumer for our distribution strategy because it’s ridiculously expensive. The only way this makes sense is if we go this way. And I said, yeah, I completely agree. So they see around corners faster. They learn faster from the mistakes. They have an insight from the bottoms up rather than the top down. And they try to learn as quickly as they can for everything they’ve done because they know that that’s their best resource.
Brian Bell (00:44:07): Yeah. Amazing. So you’ve been in early stage game for a while. What’s changed since you got started and kind of what shifts are you seeing today?
Mike MacCombie (00:44:14): I want to say normalcy in pricing. I mean, I remember looking back at deals and it was surprising when we started seeing $2 million rounds. It was always a one and a half on eight. It was a one million on seven.
Brian Bell (00:44:23): I feel like two on 10 has become kind of the norm for pre-seed right now. Is that what you’re saying? It’s like, oh, we’re raising two on 10. That used to be like a normal seed five years ago. It used to be one on five or one on six or seven. And now it feels like two on 10 is like everything I’m seeing is two on 10.
Mike MacCombie (00:44:37): But I think what we’re also seeing is that the outcomes can be bigger. So across the board, when you say, I can see Decacorns, then people are able to underwrite to that kind of valuation. Now, in this market where we’re seeing Sass Hall tools being compressed, you need to have a lower entry point unless you’re building something that can actually outgrow the comparisons there. So I’ve seen that there’s this response to the general market there. I think there’s still shiny object syndrome. There’s still social proof following. I’ve had LPs where I said, hey, here’s a company. I’m not going to do it, but I know Andreessen’s investing in the next round. $500K was put into that company within two weeks. It’s like, cool. They’re doing well, but it was just like, There’s still the following of that in terms of social proofing. And I think people are trying to go to the safest bet rather than the highest upside bet. So yeah, the amount of secondary demand and deal sharing that I’ve seen in terms of Anthropic, SpaceX and OpenAI and Databricks and people either want really early stage or they want really exciting they want really late stage really early or just the ridiculously exciting like I saw a company that was doing a robotics platform for fishermen that found a way to just make better quality fish people did that at like a 140 million valuation so it’s like either really unique in the middle really early or really late stage depending on what their first cultures are
Brian Bell (00:45:43): So they’re more investors than ever competing for these deals. I mean, what do emerging VCs like us need to do differently to stay relevant?
Mike MacCombie (00:45:49): Well, I think one is finding your own game that you go for. Like I could be going for every agentic payments platform for e-commerce. It doesn’t really affect me when there’s a thousand truffle pigs out there because I still know my forest. I know the truffles that I’m going for. I think finding your game, continuing to build leverage within your game. You are great on a broader indexing approach. So continue to be valuable to the people that you want to go across. And for me, it’s finding the highest alignment with my first principles to the point where I’m grateful to say I’ve got six companies that I could say yes to right now but I’m going to pick two because they are the ones that are even in that top six
Brian Bell (00:46:18): or passed on a deal and came back and invested later or do you kind of stick to your guns nope I passed once I’m not looking at this again
Mike MacCombie (00:46:25): Oh no, I would not dare to be saying I am the arbiter of all you can do in the future. The company, there’s a fund that I support deal flow sharing with and I pass on the pre-seed for the company and they’re raising a Series A right now and I shared it with that company and they’re doing it. Usually if I pass, it’s more just like, oh, the valuation’s too late now, even though I think it’s a really valuable company. No, I mean, I have a very abundant anti-portfolio. It’s actually this blue set over here in terms of all the companies that I track. of what’s up there and I track them very clearly and there’s actually these four companies above so these are the two that I’ve done these are the four that if there ever was an SPV opportunity I would probably do them and then the six that I’m looking at for myself so yeah I track them
Brian Bell (00:47:03): What are all the colors for all your post-its?
Mike MacCombie (00:47:05): I mean, some of them are intentional, some of them are not. So I mean, for example, blue over here is all the deal flow sourcing channels that I have. This is the most serendipitous people that I know. Passes and diligence on fund two, fund one, diligence fund one, admin, LPs fund one, LPs fund two, small check, big check, and then sort of close.
Brian Bell (00:47:23): That’s amazing.
Mike MacCombie (00:47:24): Content, long-term projects, and revenue channels.
Brian Bell (00:47:26): That’s amazing. So just post-its all over your house.
Mike MacCombie (00:47:30): I eventually get any affiliate revenue from 3M, but I’m not holding out for it.
Brian Bell (00:47:34): So cool though. Have you looked at digital like Kanban boards that can kind of do this for you?
Mike MacCombie (00:47:39): Oh, I mean, I have digital versions of all of these. So it’s not, there’s no fire, fire, DNO kind of insurance concerns here. But these are more the things where I think if you have a wide aperture on things, it’s very easy to scan and go across. And so yes, I have a database of all my deal flow sourcing channels, but it’s also just nice to say, oh, I haven’t talked with Will, I haven’t talked with John or I haven’t talked with Maggie in a while. Yeah. It makes it easier that way.
Brian Bell (00:48:01): It’s something I struggle with. What CRM are you using?
Mike MacCombie (00:48:04): I have three answers to that. One is operational CRM. There’s a platform called Ace Workflow that actually is using me as a case study. They built out everything automated for me on Airtable. So every time I meet somebody new, there’s a form they fill out. I get everything automated and I can track them and get them into every loop that I run.
Brian Bell (00:48:20): that’s right I recall that from your deal flow thing it’s very organized on Airtable I use Airtable as well but I didn’t use it for my CRM it’s too much heavy lifting to use right now but maybe someday you know well that’s for the master one so I don’t lose track of things I think there’s the don’t lose track and there’s the how to action the don’t lose track is there
Mike MacCombie (00:48:37): I have all these WhatsApp groups where if I took a meeting with you, I’d write down the 15 communities that are a fit for you. That’s my actioning. I don’t want to have to reach out to 50 PropTech investors when I see a PropTech deal. I just say, hey, here’s my PropTech community of 150 investors. You all can take a look at the deal. If you miss it because you didn’t look, that’s on you. It’s so much faster to think of distribution on demand with one click rather than saying, how do I do 50 more emails because then I’m going to get replies via email it’s so much easier just to say what is the linear leverage so I have shotgun approach to visualization and I have a laser approach to what’s the single action I can take to get leverage for the thing I need to get done
