Zelkova's Jay Levy on the founder-investor relationship

00;00;02;07 - 00;00;23;07

Ben Hillman

What was it like the first time you started at a new school? This could be primary, secondary, or even undergrad education. Take your pick. It probably felt pretty vulnerable, right? You know what it's like in your previous school. But here, everything's brand new. It's brand new building, new teachers, and definitely some new friends. It's kind of like starting your life over.

00;00;23;24 - 00;00;42;06

Ben Hillman

This is not unlike what it's like to start out as a B2B sass operator. Whether you're starting a new job or starting your own company, it can feel pretty lonely. What really helps in both scenarios is having some sort of guide to help get you through the tough times at school. It could be a counselor and in SAS, it could be in an advisory team.

00;00;42;08 - 00;01;04;07

Ben Hillman

Kind of like what we try and do for you on each of these Protect the Hustle episodes. Even if you bootstrap, you're going to need some sort of guidance along the way. What's extremely helpful is if you have an investment team on your side. I'm sure there are horror stories of operators who don't get along with their investment team, which is why folks like today's guest Jay Levy are so essential.

00;01;04;20 - 00;01;28;08

Ben Hillman

In today's discussion, we went over the human element of running a SAS business and how lonely it can be as a founder. Jay stresses as a founder himself, how crucial it is to form a solid founder investor relationship. All that and more is coming up next from panel. It's Protect the Hustle, where we explore the truth behind the strategy and tactics of B2B SAS growth to make you an outstanding operator.

00;01;28;16 - 00;02;04;11

Ben Hillman

On today's episode Patterns yourself, Patrick Campbell interviews Jay Levy about the investor founder relationship. We talk about what makes a great SAS community the three types of investors focusing on the interpersonal side of the business building and maintaining the founder investor relationship and embracing the silence during investor meetings. Timestamps to each section are listed in the show notes, and after you finish the episode, check out the in-depth field guide that will help you understand the founder investor relationship.

00;02;06;07 - 00;02;08;07

Patrick Campbell

Isaacman. So who are you? What are you guys do?

00;02;08;17 - 00;02;19;01

Jay Levy

Jay Levy I'm with Zoho Ventures Early Stage Fund. We were based out of New York for 14 years. We recently actually moved to Miami. So I live in the you and everyone else, huh? US and everyone else. I'm from.

00;02;19;01 - 00;02;20;24

Patrick Campbell

Miami. Okay, So you get you got some.

00;02;20;29 - 00;02;34;12

Jay Levy

I got a little bit like I feel like I didn't just like rush back there, like, you know, ahead of the curve, say, But at first I was like, What the heck am I doing back in Miami? And I love it now. I really do. So they're building a great community down there. So we'll see where that all plays out from.

00;02;34;12 - 00;02;48;15

Patrick Campbell

A community aspect, because New York obviously has a deep community. Obviously out in San Francisco Bay Area here where we're at is really good. What what makes a great community? Like what is Miami starting to put in that's going to make it a great ecosystem for investing founders, etc..

00;02;48;15 - 00;03;05;14

Jay Levy

And when we started Zipcar over 14 years ago, New York didn't have that great of a community for tech. It had a great community for finance and other industries, but it wasn't known for startups by any means. There was a handful of venture funds and I think really what it comes down to is it's a lot of pieces of puzzle, right, that build a community.

00;03;05;14 - 00;03;25;15

Jay Levy

So are incubators I think are incredible for building community. Right. Techstars came in to New York with Dave Tisch years ago and that really helped the ecosystem. So I think bringing more incubators, South Florida educational facilities, getting them involved, getting more founders down there, getting more successes. And it's not going to be one silver bullet. It's going to be a mix of a lot of different things.

00;03;25;15 - 00;03;42;20

Jay Levy

And over time, yeah, hopefully Miami and South Florida will continue to grow. That community that's been growing very quickly. I think there was a step function because of COVID with the growth of the community and all the press that Mayor Suarez was able to get the city and what he's doing with Web three and Bitcoin and that was a step function up.

00;03;42;20 - 00;03;58;21

Jay Levy

And now we've got to really get the rest of the pieces together with some real big wins, great talent, some incubators, education, everything. That could be a great place for founders. I'll tell you, the lifestyle is great. I play tennis almost every day. Everything's clean. It's beautiful. It's it's a great place to live. Coming from New York, that's great.

00;03;59;00 - 00;04;17;03

Patrick Campbell

It's kind of funny because it's been fun watching Miami. You know, there's a lot of fun, like Twitter meme, stuff like that. But it's been kind of fun watching Miami because, you know, it's almost like there was a little bit of a base there and now it's like going really quickly. I know Mayor Suarez and even you can argue from the governor side, like also get a lot of things to kind of set this up.

00;04;17;16 - 00;04;39;08

Patrick Campbell

But there's no like one person, you know, who's like, I'm going to set this up, Baba, You have a bunch of like, is it just each investor like you or each like founder, like just really talking about it, recruiting talent, trying to invest in the ecosystem. What makes an ecosystem go from maybe a little nascent or maybe incubating to like, okay, we're actually building this thing like, since no one's in charge, I think.

00;04;39;08 - 00;04;55;07

Jay Levy

It's just going to be time continuing What's happening, right? And the people that you know, that know Miami, right? And you're like, you go to Miami, you got to meet with these three or four people. They know everyone there and they've been there for a while and they're really helping. And they really care about the ecosystem. And they're kind of the old school people and they're critically important.

00;04;55;07 - 00;05;05;23

Jay Levy

And Miami's fortunate to have a bunch of those people and they really have taken a grasp. Those of us that are relatively new there to help get our footing down there.

00;05;05;28 - 00;05;11;12

Patrick Campbell

I'm sure it's like that. The actual tactical pieces are like early events, you know, Happy Hour.

00;05;11;12 - 00;05;28;01

Jay Levy

Is Weekly Happy Hours, get startups and founders. And, you know, the other beautiful part about Miami is everything's outside. So it's much more communal, right? So you don't have to worry about getting in. It's just come to this event, it's outside. People do things in parks, so it's much more open to everybody in a lot of ways.

00;05;28;05 - 00;05;45;08

Patrick Campbell

That's awesome. Yeah. And I think like what's really kind of fascinating too, is it's the money and the recruiting I think really helps, right? I was part of the Boston kind of resurgence from like 2012 to like today, where Bos has been around for a long time. So there's a lot of different cycles.

00;05;45;08 - 00;05;47;09

Jay Levy

We've done a lot of deals in Boston. It's been great for us.

00;05;47;09 - 00;06;05;22

Patrick Campbell

Yeah, I just remember how having like a little bit of a central like list or a couple people who are always like putting on events or like, you know, paying for the booths, you know, that type of thing just really help because you kind of there wasn't like there was all this fragmentation. It was like, you know, in Miami kind of has that vibe because it's like we're going to make, you know, Miami great.

00;06;05;22 - 00;06;14;02

Patrick Campbell

Keith for making his comments, going to Barry's, all that kind of stuff. In addition to eight sleep, talking about our recruiting X, Y, Z people, those types of things.

00;06;14;02 - 00;06;16;29

Jay Levy

You know, Jason Calacanis brought his this weekend podcast.

00;06;17;18 - 00;06;18;26

Patrick Campbell

Oh he's there like full time.

00;06;18;26 - 00;06;33;28

Jay Levy

No, no. But they did their first in-person event with Saks and the whole crew and they had some great events and apparently people are trying to sneak into them. They had to have security all over the place. People were crawling under fences. And that's this is like, okay, something's happening here and people like to be here.

00;06;33;28 - 00;06;48;04

Patrick Campbell

Yeah, it's kind of funny. Like you look at some of these ecosystems. I was also in the Utah ecosystem, which is kind of up and coming. But then you look at like Austin, right? Like Austin, it kind of had this like real big resurgence and it just kind of like leveled off and it's come back. I think, with the COVID stuff.

00;06;48;04 - 00;06;58;26

Patrick Campbell

But like, what do you think really will turn and maybe you haven't thought about this, but like what turns like, I don't know, like, like a miami into a New York or you know, we can't really compare it to Silicon Valley because, you know.

00;06;59;08 - 00;07;26;19

Jay Levy

I think some some winds, right. Like what made New York New York was there is capital, not necessarily startup capital, but then there were some winds that came in. Right. And people saw the saw the potential. Right. And then so off that. So you got to gather that snowball. And I think what you successes from Miami companies because what happens is the executives in go start other companies right it branches off too So you go from one company to two dozens to hundreds.

00;07;26;28 - 00;07;37;24

Patrick Campbell

Maybe switch topics to like you as an investor, Right. Cause you've been in the game for a while now. Actually, maybe, maybe back up even like, why invest in like, what's your journey to here? Like, I'm sure you didn't come out of the woman I know. Yeah.

00;07;38;17 - 00;08;03;09

Jay Levy

So I've always had an interest in startups. So about 15 years ago, when Larry and I formed Zuckerberg, we saw a need in the New York market for early stage capital. It wasn't there. There was a handful of funds, most of which writing larger checks two or three or 4 million. Some of them had, quote unquote, what we call it a seed funds term didn't exist back then, but they would apply the same rigor and diligence to a $3 million check as they would a $300,000 check.

00;08;03;19 - 00;08;19;27

Jay Levy

And that, in my mind, didn't work because the companies are the same data points at least back then. And things have changed now with check sizes and things of that nature. Right. A $300,000 check 14 years ago is equivalent to a $3 million check today with the same data points. You need it for 300 you get now 3 million damn inflation.

00;08;19;27 - 00;08;39;20

Jay Levy

Right? Exactly. But we saw an opportunity. It was very easy to start a fund back then from an investing standpoint, deal flow standpoint, because all you had to say in New York was, I'm writing checks. We got ourselves involved with some of the incubators really early. Techstars. We got involved with their second class out of Boulder, and that really helped propel us.

00;08;39;24 - 00;08;56;05

Jay Levy

We had some early wins with some initial companies and we decided to keep at it and we're now on our third fund, 95 plus companies, 38 exits. I think we're at we've written checks 300 times. We're pretty much focused on B2B software. We like to do the seed, the seed extension and the A double down.

00;08;56;05 - 00;08;56;29

Patrick Campbell

Yeah, yeah, yeah.

00;08;56;29 - 00;09;11;24

Jay Levy

And we'll do most of our returns will come from the CDC extension, right? To be candid, we'll do the A when we need to signaling facts. We'd rather take that money we put into the and put into a CDO. But we invest the most invested in the companies six times so we do not care.

00;09;11;25 - 00;09;13;04

Patrick Campbell

Which company was at can you would say.

00;09;13;04 - 00;09;26;29

Jay Levy

Yeah I mean two of them actually locus energy. We invested, I believe six times and Crimson Hexagon and Boston Company, we invested and we did a bunch in Boston. We were on Crimson, helped Scout. We're in Spiro so Boston's and.

00;09;27;12 - 00;09;29;14

Patrick Campbell

I'm a good friend of Knicks scouts and.

00;09;29;16 - 00;09;34;13

Jay Levy

This was one of the first to really build the distributed model and wasn't forced to.

00;09;34;14 - 00;09;43;02

Patrick Campbell

The number of arguments I've had about remote work with him just over like beers or coffee is just kind of funny. He's so passionate about it and like, he's done it really well and.

00;09;43;02 - 00;09;45;24

Jay Levy

He's done it incredibly and he's went to bat for it.

00;09;46;08 - 00;09;53;06

Patrick Campbell

That's and that's what I mean. Like he's so passionate about. Like, No, this is the way this is better for everybody, which is always really, really fun. So that's.

00;09;53;06 - 00;09;57;25

Jay Levy

Very cool. Yeah, he was definitely, definitely ahead of the curve, to say the least, on that stuff.

00;09;58;00 - 00;10;04;05

Patrick Campbell

And I know you and your crew have a reputation for being very founder friendly. You know, just.

00;10;04;05 - 00;10;08;24

Jay Levy

Usually what you says there's a there's a few founders in the portfolio that might not agree with size one.

00;10;08;24 - 00;10;35;11

Patrick Campbell

Review Glassdoor review here they're right. The reason I brought that up is not only because that's the way you structured things, like it sounds like you're like, no one's really like being founder friendly early on. That's our you know, it's both lucrative for us, but also the right thing to do. I think that there's obviously the cliche of like the investor, you know, not really providing value, not really helping when times are tough, not thinking about the founder.

00;10;35;11 - 00;10;52;17

Patrick Campbell

And then there's stories of like just fantastic founders or investors who have like been there. You know, tooth and nail for and like what separates us too. How do you be a good investor? You know, because not every founder wants like that much help. Some want way too much help, I'm sure. Like, how do you how do you square that square that circle?

00;10;52;20 - 00;11;10;13

Jay Levy

There's a lot to unpack that, right? So let me start with a few, like things that I always say. There's three types of investors, right? There's investors that will write you a check and add a ton of value right there. Investors that will write you a check and want quarterly or semiannual or annual updates. And that's it. Right?

00;11;10;13 - 00;11;28;07

Jay Levy

And stay out of your way. And then there are investors that will write you a check and drive you nuts. The goal is to get the first two and not the third right. I always tell that the founders and the challenge around picking your investors, especially in what we're going through now with so much remote, so much digital, is you really got to get to know them.

00;11;28;14 - 00;11;47;15

Jay Levy

And so much of that has to be in-person. Seeing the lights, their eyes, seeing how they react, going to dinners with them, seeing if you got right in. It's very much like dating. Right. And it's a long term engagement that you're going in. I tell founders all the time whether they've got an investor has one share or a million shares in your company, they can make your life miserable.

00;11;47;25 - 00;12;11;28

Jay Levy

Right? Whenever we see an investor founder relations go south, there's unfortunately been a persona of who it is and why it's happened. And I'll throw it out there. It's a little controversial, but it's usually the middle aged, retired person who doesn't have much to do and is looking for something to do and thinks they can do it better and has an ego.

00;12;12;09 - 00;12;30;26

Jay Levy

And and these are ego strokes. And that's when we've seen founder investor issues. So I always saw founders really get to know we're looking at a company right now I've said I will not write a check. I will not commit until we spend hours together in conference rooms and working through plans and making sure we can work together.

00;12;31;03 - 00;12;48;25

Jay Levy

And listen, I might not be the right investor for you. You might not be the right team for us, but we got to get there. So don't just accept a check because someone says, I'm excited to write you a check for ten grand, 50 grand, 500,000. Like really get to know the person. And I think that building, that working relationship is how to start off that relationship, Right.

00;12;48;26 - 00;12;55;22

Patrick Campbell

Do you think that's true for small checks as well? Because I could see someone being like a founder being like, Hey, it's a ten K check, 25 K.

00;12;55;29 - 00;13;15;02

Jay Levy

I think it depends on who it's from, right? I think if it's a founder, founder and you see that a lot of smaller checks we see on cap tables are from other founders. They get it right so they can be more supportive. They understand what it is to be on that set table. I think you got to be careful when it's somebody who's investing who this isn't what they know.

00;13;15;17 - 00;13;30;16

Jay Levy

And that's where you also run into challenges. It's like, you know, I do one deal a year, one deal every three years. You know, maybe I'm stretching myself a little, but then that's when you can run into problems.

00;13;30;16 - 00;13;48;15

Patrick Campbell

It's really interesting what you said and you kind of you glossed over it because I think it's really obvious to you and it's a little enlightening here. It's just expectation setting, right? Like and do you think that investors don't they don't do expectation setting both ways, meaning investors won't set the right expectation, founders won't set their expectation. Investors, do you think that's the.

00;13;48;15 - 00;14;04;12

Jay Levy

Crux of it? I mean, I think you've got to have that kind of come to Jesus moment together, right? And say, how are we going to work together? How can we be beneficial? And this is right for both of us. Are your expectations for what we're going to do and our vision the same as yours? Or are you least open to allowing us to run with our vision?

00;14;05;03 - 00;14;28;15

Jay Levy

And that's where challenges happen. And I think a lot of investors don't appreciate how hard starting a company is and being the founder, CEO or co-founder co-CEO CEO, CTO. You know, we've surveyed our founders and I'm a big fan of Jerry Colonna and what he's done at Reboot. And I've been out to the VC bootcamps and they're a great experience.

00;14;29;01 - 00;14;47;03

Jay Levy

You know, they're all about being a better board member. You know, that's kind of what the cover is of it. But it's really be a better person, be a better investor or be more supportive. And, you know, founders, we constantly hear this. They're afraid, they're lonely. Depression is incredibly high in founders, right? It's lonely at the top. And that's what they're dealing with.

00;14;47;04 - 00;15;03;08

Jay Levy

Right. And I don't think enough investors focus on the interpersonal side of the business, right? Because at the end of the day, especially on the key stage investor. Right. So I'm betting on the jockey, right? You go to see these seriously like.

00;15;03;12 - 00;15;04;19

Patrick Campbell

Spreadsheets of talent, a different.

00;15;04;20 - 00;15;26;10

Jay Levy

It's different. It's a the business is already functioning right. Could it function as well without that CEO? Probably not. But it's not going to go out of business next day. Key stage company. It's all about the jockey, right? So we take that really seriously. I mean, one of the things that I always do, and I'm a big believer in get a board structure from the get go for a company, I think putting that framework in place is great for them.

00;15;27;09 - 00;15;45;13

Jay Levy

After the board meetings, I want to sit down with the founder and really know what's going on in their life. How are they doing? Well, tell me what you didn't want to really say, right? Like in the meeting. What are you afraid of? Where are you be vulnerable. And challengers are afraid to be vulnerable in front of their investors because they fear it's going to show weakness.

00;15;45;21 - 00;16;01;03

Jay Levy

And well, what happens when you do another check? Are they going to think I'm not a strong founder, strong CEO? So we really try to provide a space with our founders to be vulnerable, to open up and, you know, talk about what's going on. And one of the ways I do that is I'm not bought, I'm not a board member.

00;16;01;03 - 00;16;20;20

Jay Levy

I like to be a board observer. So I don't have the same fiduciary duty as a board member does and as a founder. And it's actually interesting because we've had board member, founder, conflict and me as the Observer, I've been the kind of independent can kind of help jump through things with what's going on for them. So that's been a big area of kind of where we've had value.

00;16;20;20 - 00;16;33;22

Jay Levy

I'm a semi trained corporate coach. I went through a bunch of the classes. I loved it. I read a lot of the books and yeah, actually Jerry and Reboot pushed me to do that. So big fan of them and what they've done for me and ultimately for our companies.

00;16;33;25 - 00;16;53;02

Patrick Campbell

Yeah. And so something you said that I thought was really really valuable is the founder fear element because I think a lot of people like we all know it, but we don't really talk about it as much as that, especially in the sea stage. There's a ton of founder fear of not just like, Can I do it, but also if this thing happens, the business will go under.

00;16;53;02 - 00;17;15;20

Patrick Campbell

Whether it actually would or not doesn't matter, because I think that, you know, all the things around I don't know how to do this. I don't know how to do that. And that's that's that vulnerability that's really hard to like show when there's a check or something that is needed for that survival or perceived survival of something. And so I guess is is it as simple as you doing some of those tactics you just talked about, which is, hey, what are the things you're not telling me?

00;17;15;20 - 00;17;18;14

Patrick Campbell

What are the things you fear that you're not talking about? Like anything like that?

00;17;18;14 - 00;17;39;12

Jay Levy

It is, but what it takes is really building that relationship over time, right? So getting that building that trust together. Right. And I tell founders, whether it be me or someone else, observer or a board member, try to have that one board member that you can have those real candidates conversations with and that true honesty, who then can be your champion within the board also and help you walk through things.

00;17;39;12 - 00;17;58;08

Jay Levy

So who's that board member that you're going to call first when it hits the fan and isn't going to judge you and is going to sit down and say, okay, like, you know, I'll come right over, let's sit down in a conference room and work through this together. I think that's incredibly important. I think the board relationship needs to be a collaborative one and a lot of times it's not, unfortunately.

00;17;58;15 - 00;18;15;04

Jay Levy

And I think that's on both parties. But the founders can do a lot to help build that collaborative nature. Keep your investors updated, not just monthly or quarterly updates. You have a big win. Let us now immediately text it. Like I always say that I know I'm in a good place when I'm getting texts at 930 at night from a founder.

00;18;15;11 - 00;18;26;27

Jay Levy

That's when you know you've got a good relationship. And that should be I think the goal of all I say to investors is to get to that type of place with their founders.

00;18;26;27 - 00;18;40;09

Patrick Campbell

Again, technically not to ask you how do you make friends, but by kind of like how do you build those relationships? Because I'm sure you have, you know, you have a ton of relationships with people you haven't invested in, right? Then you have a ton of relationships that people are like, Is there something that you've done to like, speed that up?

00;18;40;09 - 00;18;45;29

Patrick Campbell

Do you go and, like, visit them for like half a day once their checks written like that's like, what do you what are you doing there to kind of like speed that up?

00;18;45;29 - 00;19;00;21

Jay Levy

But before I mentioned, I like to spend a lot of time with the founders. You know, after it's I mentioned I like the board structure, but it's also delivering on the promises you made. Right? So if you say, Hey, I'm going to see X, Y, Z, you're going to do X, Y, Z, do it, do it quickly. Right.

00;19;00;23 - 00;19;23;09

Jay Levy

And report back. Right. And then also take the time to read the updates, re read the materials and, you know, check in with them on tax. Hey, what's going on? How are you doing? Like I'm at this. I saw this, I saw this company. What do you think about them? That's the other thing is what I don't think investors do enough of is if you see a company tangentially related to a company you're invested in centered over the founder for their opinion.

00;19;23;24 - 00;19;41;28

Jay Levy

Right. Flip the tables. Let them become the expert. Right. And frankly, they know more about it, right? Like I'm constantly asking founders what marketing stack they're using so I can kind of get an idea of what other companies are doing and take. So I think it really is like show them that you're there to support them and ultimately don't fight for the final point, right?

00;19;41;28 - 00;19;57;08

Jay Levy

That's the big thing is it's not about the final point, right? So when it comes down to rounds or things of that nature, really make it a express to them, you know, if you're doing a funding round what your needs are, hear what their needs are and see if there's a middle ground that you can both compromise on.

00;19;57;10 - 00;19;59;13

Jay Levy

And I think that really helps build a good rapport.

00;19;59;17 - 00;20;17;03

Patrick Campbell

Build a relationship, you know, a rapport. It's a lot of standard stuff and a lot of like stuff you just mentioned that's like nice in terms of like making sure you flip the table, which I really like when you're dealing with some of these founders who aren't given some of this back to you. Like have you had that situation or you've already kind of vetted that beforehand.

00;20;17;03 - 00;20;46;06

Jay Levy

So what I always say is the relationship is going to change over time, right? We're a seed investor. I don't expect when Sequoia or Andresen comes in to one of our companies with a $50 million check, or they're going to have their views, they're going to have their ways, and that's slightly fine. But what the founders know is and this typically happens, is when someone from a later stage finds one of the board members is on their ass and they don't know how to deal with it, they know they can pick up the phone and have that conversation with me.

00;20;46;06 - 00;21;07;27

Jay Levy

And that happens, right? And that's the rewarding part. I listen. The other thing is I can't be involved in every company throughout the entire journey that makes this business like this is not scalable already. Let's let's make it less scalable. As, you know, trying to be on 60 boards. So, you know, we tend to be super involved in the first two or three years and then again actually pretty involved in the M&A because we've had so many exits, we can help there.

00;21;08;00 - 00;21;29;08

Jay Levy

So that tends to be and then you get to the the B, C, and D, and these investors are better suited. They're seeing more companies at those levels to be able to find the advice. I'm seeing more companies at C in early stage level to provide advice. And so I think it's also as an investor, knowing your time and place and getting back to where I said earlier, the we're actively seeing things go wrong with that.

00;21;29;23 - 00;21;41;04

Jay Levy

So I'm an investor. That investor also doesn't understand why it's maybe time for them to step back. And I think understanding when it's time to step back as an investor and early stage investors are critically important also.

00;21;41;05 - 00;21;57;12

Patrick Campbell

Yeah, So we laid a foundation, we built a relationship. We kind of vetted that before we got into it. We're hopefully like getting a really good communication between the founder, founder and you, or as an investor being a great board member or being a great investor. Like what else? Like what else is on that list? I know there's a.

00;21;57;12 - 00;22;14;13

Jay Levy

Lot perch that from being a better board member because investor to me thinks pre investment, right? You're supportive investor of board member once you've invested. I think it's a lot of what we've been talking about is really being there for the founders, being there for the team, helping them out where they need it and what they need at time, and also knowing when to tell them you can't help.

00;22;14;13 - 00;22;32;24

Jay Levy

It's not your expertise, right? We can't know everything and that it can be as valuable as helping at times or pointing them in the right directions. And then it's also taking the learnings from other companies and obviously and honestly, as best we can. But you know, what have we learned in other places? What have we seen? Right. It's your company.

00;22;32;24 - 00;22;48;16

Jay Levy

You've got to run with this. You're going to make mistakes. If we can help you avoid some of those stakes. We're doing a great job, right? And then it's really like being a sounding board. I mean, the one I always get is we always say any company in the SAS company, you're going to hire and fire your first head of sales.

00;22;49;09 - 00;23;12;04

Jay Levy

You're going to hire them probably too quickly. They're not going to have the passion. You have the founder, right? Every founder wants their head of sales, have the same passion and conviction and belief that they do. Okay, give me 80% company, right? They're getting a salary commission and a few points if that like they're not going to have the drive that you have I want to say and every company that person has been let go.

00;23;12;04 - 00;23;28;19

Jay Levy

And really what it comes down to is I get those phone calls and it's usually the phone call is like, are you not approving this from a, you know, check the box standpoint? Like, can I just talk through this? And usually it's too late. They've tried. So I think a lot of it just being a place to have let founders vent.

00;23;29;00 - 00;23;45;23

Jay Levy

And that's what coaching is really about, right, is let people talk and they know the answers themselves. Help them get the answers out of them, Right? No one investor should know a founders business better than the founder, and I think that is critical for both founders and investors to realize.

00;23;50;24 - 00;24;09;00

Patrick Campbell

When I think it's really important to like have a state that almost plainly within the relationship because I think is a good number of investors who kind of do the same thing that founders sometimes do and try to like front in like, Oh, go. But obviously you have 60 investments, you're not on 60 boards, but there's a lot that you're looking into.

00;24;09;00 - 00;24;26;21

Patrick Campbell

And in those coaching sessions, I guess my next question is around like how do you sometimes structure those, right? Like people are coming in, you're letting people vent, that type of thing. When do you kind of know when to kind of like push and push back and when, you know, to kind of just be that sympathetic gear. And it's probably not there's not a framework for it, But.

00;24;26;21 - 00;24;45;25

Jay Levy

You embrace silence, right? And people don't like awkward silence. And what do they do? They talk, right? So if you just sit there, you let someone talk, they will tell you everything. So I read some stat that apparently, like when you're listening, it takes 18 seconds before the average person interrupts.

00;24;45;25 - 00;24;50;23

Patrick Campbell

Oh, wow, 18 seconds. Interesting. Like before someone.

00;24;51;01 - 00;25;06;26

Jay Levy

So we're having a conversation and I'm telling you something, right? I'm giving you my thoughts or my feedback to 18 seconds before you're interjecting, Right? We don't do a good job of listening, Right? And because we're constantly thinking about what we want to say next, right? You're saying something. I'm thinking about what I just said.

00;25;06;26 - 00;25;08;28

Patrick Campbell

I'm thinking about my next question. How do I guide it?

00;25;08;28 - 00;25;32;12

Jay Levy

Yeah, Yeah. And taking the phones out of the room. Like one of my biggest pet peeves is having laptops and board meetings from an investor standpoint. Because what's on my laptop, my email, my text messages, Instagram, Facebook, like distractions. How about like sit back with the notepad and be present like, well, what? Can't wait 2 hours? Yeah. And if there is something you typically know that's going on and you take a break and you check it.

00;25;32;12 - 00;25;46;15

Jay Levy

So that's always been one for me. I'm like the guy in the board meeting with like an old school notepad and, you know, taking notes and sitting back and like, listening and everyone's like typing away and you look at the screens that they're you're not like, take taking notes from the meeting.

00;25;46;20 - 00;25;48;08

Patrick Campbell

No, I see plenty of emails, but yeah.

00;25;48;13 - 00;25;53;22

Jay Levy

There are emails, right? Like, how can you be present? So I think being present is critically important.

00;25;53;22 - 00;26;09;27

Patrick Campbell

Also right now it's really good advice on a number of levels. I guess interesting enough, like I know you talked about investing and like getting started, but when you were growing up, you know, was this what you wanted to do? Like why not be a firefighter or why not be, you know, a chef or whatever else other thing?

00;26;10;03 - 00;26;12;24

Jay Levy

So growing up, I always want to do something with finance. I knew that.

00;26;12;24 - 00;26;14;06

Patrick Campbell

Okay, so you were like in it to win it.

00;26;14;06 - 00;26;31;03

Jay Levy

You know, I always I grew up in a very entrepreneurial family. I always I grew up in South Florida. I left I went to Rutgers because I want to be close to New York City, knowing that if I stayed at this is I'm 41. So that was, you know, 20 years ago, if I stayed in South Florida, I'd wind up the only thing in finance I could be was a stockbroker.

00;26;31;03 - 00;26;46;12

Jay Levy

And that's what I wanted. And I was fortunate. When I was in college, I started a company with two other guys. I was a second employee. We grew to 500 people. I saw the birth, life and death of a startup in my dorm room, and then I went to work for Morgan Stanley after that. So I got onto Wall Street.

00;26;46;12 - 00;26;58;12

Jay Levy

So I always knew I wanted to do something entrepreneurial along with something related to finance. I didn't necessarily think it was going to be the side of it, but I love what I do. I get to work with great people and I'm spoiled because I get to pick companies I want to work with.

00;26;58;14 - 00;27;08;19

Patrick Campbell

That's great. And do you think that that experience of being an operator like before you're an investor, does that matter? You think, like, should I look for that as a founder, looking for investing?

00;27;08;27 - 00;27;28;17

Jay Levy

Absolutely. You know, and in fact, you know, I'm been doing it for 15 years, so I'm further away from operating. But I have a partner in a winery that called up fruit Wines that I use as a test for for a lot of the software, a lot of the ideas to stay with it. Right. We do, you know, online wine sales and I love it.

00;27;28;17 - 00;27;41;20

Jay Levy

And, you know, it keeps me kind of as a founder also at the same time, because it's very easy for an investor to relatively quickly lose those skills. And I wanted to figure out how to keep a school.

00;27;41;26 - 00;27;45;02

Patrick Campbell

Ask Ben, where can people find you anything you want to plug?

00;27;45;02 - 00;27;53;21

Jay Levy

Yeah, they'll cover ventures. So. ZIELKE Via the SI.com or at Twitter at Zivkovic the Elko VA.

00;27;53;21 - 00;27;54;26

Patrick Campbell

AVC Very cool.

00;27;55;16 - 00;27;58;14

Jay Levy

Thank you.

00;27;58;14 - 00;28;26;20

Ben Hillman

A huge shout out to Jay for doing the podcast. Now you have insight into the founder investor relationship. Today, we talked about what makes a great SaaS community. The three types of investors focusing on the interpersonal side of the business building and maintaining the founder investor relationship and embracing the silence during investor meetings. If you want to support Padel and the show would really appreciate it if you left a five star review of this podcast or the equivalent rating wherever you listen or watch.

00;28;27;00 - 00;28;34;29

Ben Hillman

Thanks for listening. Make sure you subscribe to and tell your friends about Protect the Hustle, a podcast from Paddle.