David Lee

Investor

THIS CHAT HAPPENED ON November 04, 2015

Discussion

David Lee@davidlee
I am David Lee and I'm an angel investor in tech companies like Verge Genomics, Guardant Health and Headspace. I was most recently a GP at SV Angel and also worked at Google, and tech law firms.
Sydney Liu@sydney_liu_sl · Co-Founder of Commaful.com
Thanks for doing this David! You've had a pretty hectic lifestyle, having to balance being a VC in SF which ends up being a lot of meetings and then a family in LA. What are 3 hacks or practices, can be about life, meetings, family, VC, startups, growth etc, that you've picked up over the years that you've found most impactful for you? Thanks! Sydney
David Lee@davidlee
@sydney_liu_sl Hi Sydney. I have lots of hacks but haven't had tons of success sticking with them :) When it comes to balancing work/life, sometimes that's imposed upon you rather than vice versa. For example, if you have young kids, your weekends are spent with them and family so that's a constraint. But here are some that I've tried and have had varying degrees of success... 1. Sleep a good night's sleep 2. Wake up early and spend 15-30 minutes quietly (esp if you have young kids) 3. Drink a ton of water. Seriously. This hack increased my energy level big-time but I don't always stick to it. 4. Always be in learning mode
Danny Zlobinsky@dannyzlo · Senior iOS Engineer, The New York Times
@davidlee Hey David! Today there are myriad ways for founders to seek funding at the seed stage. What do you suggest founders focus on, seeking out angel investors? VC firms specializing in the seed stage? Incubators/accelerators? Thanks!
David Lee@davidlee
@dannyzlo Hi Danny...life-long reader/subscriber of NYT although I've taken some pot shots at them recently :) In all seriousness, very hard to say. It's hard to generalize funding advice to startups because they're so different and investors have different criteria when it comes to different industries. For example, for a consumer product like PH or Snapchat, you're looking for something different than if you're looking at an enterprise company that has long sales cycle. I like Peter Thiel's checklist of startups because it is flexible and simple and applies to almost any startup.
David Lee@davidlee
@davidlee @dannyzlo and so the answer to who to seek depends on industry and what you're doing...
Lejla Bajgoric@lejlahunts · Intern, Product Hunt
Hey David, thanks for being here! You wrote a blog post that mentioned a mini existential crisis, mindfulness and the app Headspace. The piece was written almost a full year ago. How has your continuous journey with meditation and mindfulness developed this last year? Have your resolved the crisis? Developed any new lasting habits to stay mindful?
David Lee@davidlee
@lejlahunts Thanks for reading the blog! Mindfulness and meditation has been a great tool for me. The best analogy I've heard is that meditating is like weightlifting for your mind, the most important muscle. I try to meditate every day for about 15 minutes but it's hard :) I don't have any new habits but I try to stick to that. My best friend Max Goldberg (@livingmaxwell) from high school always has good tips - ensure you meditate in the morning, drink a glass of water first thing in the morning...so I try to keep up with him.
Ryan Hoover@rrhoover · Founder, Product Hunt
David! Welcome. :) Which investment of yours are you most proud of?
David Lee@davidlee
@rrhoover Yo, Ryan! This is a great question. It would be easy to point out the obvious ones but the investments that really stick out for me are those founders that are less known but proved to be awesome, great founders. It's tempting to look at the outliers and focus on the result instead of the process. But I think of investments like Comprehend Systems, HelloSign and WePay. In each case, these founders display resilience, persistence and toughness - things you can't measure in a pitch meeting. It was awesome to see them stick with their companies (WePay has been around since 2007!), control what was in their control and ultimately hit milestones that were probably 10x more rewarding given their paths. You can read about it in a book but when you see founders stick with something and make that their lives without much fanfare (relative to other companies), it's pretty inspiring.
Inlovewith01@inlovewith01
@davidlee Hi, what's the best advice you can give in 5 words or less to a newbie co-founder? And why?
David Lee@davidlee
@inlovewith01 Do what you're good at/love (too many words?) :)
Wen Wilson@acreerph · CEO & FOUNDER , HEALTHCITE
When you look at a business plan , what is the most important part of the plan besides the idea?
David Lee@davidlee
@acreerph Thanks for joining! It's hard to say what's the most important part...it depends on industry, stage and so forth. Generally speaking, I like to understand the founders' motivations and why they're starting the company. Is it a life's work? Something they can't stop thinking about? Are they a domain expert? That's the part that interests me most - particularly at the earliest stage.
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
Hi David, thanks so much for joining us today. Would love to hear how you feel the VC and investing landscape has changed over the years? Also how do you think the recent SEC enactment of Title III will affect VC? Will you be losing a large amount of deal flow to startups looking to raise from the crowd?
David Lee@davidlee
@harrystebbings Thanks for the question and I'm a fan of your podcast! I liked your session with Bob Kocher. The VC landscape has changed dramatically over the years. Granted - I've 'only' been in this business since 2007. I put that in quotes because on the one hand, it's almost 10 years and on the other hand, I've really only seen one tech cycle. But over the years, you've seen tons of microVCs, platforms like Angel List, Quire and Funders Club, etc. Also for various reasons, more people are flocking to entrepreneurship than ever before and eschewing the path of working for Big Co, Big Firm. Even though I'm a lawyer, it's been awhile since I had a legal opinion! But I think it's a strong trend and great signal. The relevant rules and regulations were created in 1933 and 1934 (!). Times have changed and regulations - while a lagging indicator - should reflect that.
JJ@outdreamer · Web Developer/Writer/Idea-generator
Hi, I have a lot of questions, if you could pick one or two to answer, I'd appreciate it. Do you more frequently find yourself & other successful investors learning by - 1. studying other investors decisions heuristics to help them identify good & bad investments 2. relying on traditional analysis of business signals & ratios 3. identifying their own insights from raw analysis 4. learning by taking risks/making mistakes Whats a method you use to discover your own investing biases? Whats a cognitive function you find useful on a daily basis - like tempering emotions, resetting your mind, memorization, considering hypothetical situations, identifying trends, creating arguments in defense of a viewpoint? Based on your previous investments, it looks like you're picking a favorite in a comprehensive set of products that define the new tech standard of living, rather than focusing on a few industries: - convenient communication - localized transportation of resources - ad, content, & cloud platforms - user-preference (voting) systems - aggregated & curated content It seems like teams of large companies have been cooperating to provide their own version of this product set, regardless of past antitrust issues. In my mind this points to a conflict brewing between these company teams, each with their own perspective for sale, which drives the following points of uncertainty - 1. How will this interact with political lobbying & the bundling of legislation similar to bundled products 2. Will consumers soon confront an environment in which they must choose a company team to promise their data to, in return for which we'll receive a supply of opinions embedded in demanded products that depend on our consumer loyalty to the team & result in further dependence on the team's products Also one other question, for an invention - what do you think of a public marketplace for data, where people can sell data on their preferences directly to groups of companies?
David Lee@davidlee
@outdreamer Whoa. These are some great thoughts/questions. One thing I learned the hard way is that there are no categorical rules in startup investing. You hear all these warnings: "Don't invest in single founders," "Don't invest in non-technical teams," "Don't invest in married founders", etc. I've learned you should ignore that and approach each opportunity with a beginner's mind. Also, the heuristic I always think about is hedge fund manager Eddie Lampert who studied every Warren Buffett investment by collecting all the data Buffett had at the time he made the investment. So if Buffett made an investment in 1974, he would get all the information that Buffett had at that time and studied that decision. That left a lasting impression on me when evaluating investment decisions: would you make the same decision 7-8 times out of 10 if you had the same information at the time you made the decision? If I can say yes truthfully, then it's easier to sleep at night. And if I can say yes and the outcomes are consistently bad, then you need to re-evaluate your process.
Tuan Le@tuanl34
@davidlee @outdreamer Do you still have the link to those studies by Eddie Lampert? That sounds so interesting to me that I'd love to check it out..
David Lee@davidlee
@tuanl34 @outdreamer i don't have a link but i've read that was his approach.
Jack Smith@_jacksmith · Serial Entrepreneur & Startup Adviser
@outdreamer RE your last point, check out datacoup.com which are trying to do that
JJ@outdreamer · Web Developer/Writer/Idea-generator
@_jacksmith Will do. Im working on compiling a list of my ideas so I can direct people to that. If you'd like an update you're welcome to add me on twitter & I'll post it when it's ready - I'd appreciate your feedback if you get a chance.
Emily Hodgins@ems_hodge · Community and Marketing, Product Hunt
Hey David! Thanks for being here today. 🙌During your career to date, what has been your a) most challenging moment and how did you overcome it? b) proudest moment and why? c) most surprising moment? Thanks!
David Lee@davidlee
@ems_hodge Thanks for setting this up, Emily! Hmm...hard to say but here goes: a) Most challenging: In general, trying to become a better investor. I know that sounds generic but you really have to be a 'learning machine' as Reid Hoffman says. There is just so much activity now - great startups, new technologies, new trends, etc. b) Proudest moment: When founders send me personal emails or letters thanking me for helping them get to a certain point, I print out those emails and keep them in a file. I know it sounds corny but it's something I did as a lawyer as well - when a client/customer is happy, that's pretty awesome. c) Most surprising: Hard to say...you could expect anything any day!
V Saket Ram@vsaketram · trbble
Hello David, What is your take on startups that are coming up in the music space? What do you think will be the major challenges that they will face? And from an investor's point of view, what do you think will make investors want to invest in such startups?
David Lee@davidlee
@vsaketram The conventional wisdom for many investors was that music was a tough space for startups. That's changed over time with companies like Spotify et al. but my impression is that many startups still face the challenge of striking big biz dev deals with labels and artists. In general, when a startup *needs* to strike large biz dev deals in order to get meaningful traction, then it becomes more challenging. You have limited resources and leverage. Any industry involving such complex rights issues (with motivated rights holders) is a tough one where you can't beg for forgiveness later.
Mukesh Kumar Agrawal@mukeshgbg · CEO, Edurila
Hey David, would you like to invest in an elearning site?
João Costa@jrdbacosta · BD octonius.com
What do you look in an investment? And do you interfeare in any part?
Dre Durr💡@dredurr · Growth Hacker
Hey David, I would like to know what is your opinion on making investments based on Gut vs Data. Meaning you just a a feeling it could be big vs The Data says it can be big
David Lee@davidlee
@dredurr In general, the earlier the stage, the more you should rely on gut, intuition. And as the company progresses, you should focus on data first and foremost. You should never ignore either when evaluating a company but when you're speaking to founders just starting the company, you usually don't have a ton of data to evaluate.
João Costa@jrdbacosta · BD octonius.com
In What do you expect to invest?
neeharika sinha@neeeharika · Google, Threadchannel
Hello David, Great to meet you here. I am sure a lot of startups approach you for investment. What makes one startup standout from the others for you?
David Lee@davidlee
@neeeharika Hi Neeharika, tough question! It's hard to say but I always come back to the founders. If the founder can clearly and enthusiastically explain what they're doing, why they're the best team and why the timing is right, it is a great sign. I was a Physics major in college and wouldn't have survived without Richard Feynman's "red book lectures." That left a lasting impression on me. He could enthusiastically describe the most complex topics using language that a lay person could understand. I think that shows true command of subject matter and the enthusiasm was infectious - even if you didn't like Physics, it became interesting because of his contagious passion. Those are the traits that stand out to me.
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
Hi David! What's your take on online schools/learning and what do you think is the missing piece that will make them explode?
David Lee@davidlee
@theo_dimarhos I haven't really studied this area. But it will be fascinating to see this play out as 3-4 billion people are connected through their mobile phones.
Terrence Yang@yangterrence · Yang Ventures
@davidlee Can you please give us some insights re: your current thinking about Bitcoin and blockchain tech? Thanks.
David Lee@davidlee
@yangterrence Hi Terrence. I'm still long term bullish on Bitcoin. I think it could do for value what the Internet did for information. It also introduces scarcity to an asset (information, bits) that is fundamentally not scarce. If I were 20 years younger and technically capable, I'd be working on this.
Steven W@mrwongsteven · Nice guys finish lunch.
@davidlee Who's a VC or Angel investor that you look up to? How involved are they with the companies they invest in?
JJ Tang@jjrichardtang
Hey David, thanks for being here today :) What are a couple qualities you see time and time again in founders? Also, what is something you believe in that others might find to be insane?
David Lee@davidlee
@jjrichardtang Hi JJ! If you're question refers to repeat founders, I generally look for following qualities: integrity, enthusiasm, no "unforced errors" (i.e., controls what she can control), sense of urgency, persistence and toughness. The last two traits are probably the most important.