Eric Vishria
speaker
163 appearances
1 recordings
1 series
first heard Sep 2024
last heard Sep 2024
Eric Vishria’s voice in public audio — every appearance, attributed to the second.
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Appearances
So I spend a lot of time on that. I spend a lot of time trying to believe, do I think that insight is cogent or not cogent? Does it hold together effectively? And I spend a lot less time on the sector specifics because I just feel like if I'm an F on a sector, with best effort, I can get to a D plus. That's not good enough. And so I'd just rather not.
And I actually think this is maybe contrarian and total aside. I think this is why the memo writing culture at a lot of firms gets you in trouble because you put a lot of information into It encourages putting a lot of information that is like third and fourth order stuff into document as if that is impacting your investment decision.
Where like most of these investments, there's really like one or two questions that really matter. All energy should go to those and everything else is kind of like unknowable, non-deterministic, or irrelevant. So what Peter did in the case of Cerebrus was, and I remember it really distinctly, I met the company first on a Wednesday. And I was like, why am I meeting a semiconductor company?
This is so stupid. I shouldn't be doing this. We don't make semiconductor investments. This is maybe February, March 2016. And I came out of the meeting and was like, wow. And so the team was amazing. And then the insight was really keen and really sharp. And it's now totally accepted. But at the time, it was so sharp and so contrarian. Contrarian is not the right word, actually.
What it was is unique and novel. That's what it was. It was unique and novel. And so I came out and I was like, this is interesting. We met again. So I called in a bunch of partners to meet on Thursday. And so a whole bunch of us, including some of the founders, including Bruce, he mentioned earlier, like he came in because it's like, you know, like, what do I know about semiconductors?
Almost nothing. Well, really, probably nothing. Colin Bruce, who had actually done semiconductor investments and discussion. So that was on Thursday. I spent time one-on-one with Andrew on Friday. Bill and I had lunch with Andrew on Sunday. I'm talking to Peter about it on Sunday night. He's just totally discouraging me from doing the investment.
He's like, this goes against everything I've learned in the industry. Totally discouraging. He hasn't met the company yet, just based on my articulation of it. Monday. So I bring the company in. Peter was like, I was like, just have an open mind on it. Just have an open mind. And so comes in on Monday, Andrew pitches and he had a term sheet already. And so we were running obviously.
And he pitches. And at the end of the pitch, we're debriefing. And we have a system where we talk and then you can call the sponsoring partner. Basically, you can call for a vote. And Peter said, call for the vote. He told me, he was like, call for the vote. And he pushed me.
So he pushed me to call for the vote and to push her over the line after spending literally 16 hours before trying to talk me out of it. And so the answer is... So yes, my partners have kept me out of a lot of stuff. But what he was doing in that moment is he had updated his own evaluation of the opportunity and the idea and was like... yeah, it makes sense.
Also, Eric clearly really wants to do it and see something here. And so I'm 18 months into being a venture capitalist and I have one of the greats of all time, 16 hours before, telling me this goes against everything, don't do it, blah, blah, blah. And so I think that encouragement of like, hey, you saw something there,
And then like the rest of the group saw it and was like, yeah, there's something there. And like, and so I go back and think about that a lot because each of us in a good partnership, each of us brings our own points of view and our own biases and baggage, but our own insights as well. And so you got to put all that together.
And if you do that well, that's like, that's these partnerships at its best. And I've seen that. a whole bunch of times.
I'll give you a great example where Sarah saved me. We were looking at a company and she's like, Eric, and this goes back to your sector thing. It's just like a perfect example that ties this thing together is like, she's like, Eric, I'm telling you, you're used to looking at software companies. At this company, you're gross margin and like these unit economics really, really matter and they suck.
There isn't a path to get better and the entrepreneur is not engaged on the topic. It was just like a great insight because like for us, you know, as your kind of traditional software investor and like doing things, it really doesn't matter. Like it's just like all of these things end up, you know, your SaaS companies are going to end up in between 75 and 83% gross market.
Like they're just going to end up there. Like it's fine. It works itself out. And so like a company that starts there, like, you know, way less than then, it's just like, whatever. And you'll fix that. But, you know, I think it was like a great insight that like kept me out of it because there were a ton of things that I loved about the entrepreneur. And it was really like a compelling individual.
But I think her point on the nature of the business and the fit between the entrepreneur and the nature of that business in specific was spot on. And so Sarah saved my bacon.
I totally agree. I think this goes back to the spreadsheet conversation and why I think spreadsheet investors are going to get wiped out or have a really hard time in this era. And I think SaaS was such a boon and gift to the investor bankery spreadsheet investors. Plug your stuff in and you figure it out at scale, right? At the early stage though, I totally agree with you.
People will come in and they have like a million and a half and they're talking about their net dollar retention or whatever. It doesn't matter. In none of that stuff, in not a single company, I think I've worked on five companies that have gone from zero to more than 200 in revenue. And in not a single case did the economics at the very early stage extrapolate all the way. It's just not a thing.
Not even the economics from when they were at 30 or 40 or 50 extrapolated to 200. It just isn't how it works. There's so much change that happens at these companies. And so just false precision around that is just dumb.
And I think you can say, let me take the flip side of it, which is the flip side is there are things that you can see at those stages, which would tell you that this thing is going into a wall or is going to have to undergo a major transformation. I think there are problems that you can see, but I think the positives are not really knowable that way.
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