75. No Fun Allowed, Part 1 (Jonathon Triest & Brett DeMarrais)

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Jonathon Triest & Brett DeMarrais of Ludlow Ventures join Nick to cover No Fun Allowed, Part 1. We will address questions including:

  • Jonathon, can you start us off w/ you background and path to investing in startups?
  • How about you Brett. How did you find your way to becoming a venture capitalist?
  • What’s the strangest or most shocking pitch you’ve ever heard?
  • What’s the most frequent startup, style faux-pas and which venture capitalist is the most frequent offender?
  • What’s the most boring or annoying thing about being a venture capitalist?
  • If you could pick a handful of investors for the new reality show, ‘VC Survivor Island’, who would choose?
  • If you were a unicorn hunter, what startup would be first on your hit list?
  • Whose blog do you read frequently, but always leave more confused than when you arrived?
  • Which current presidential candidate, reminds you most of a venture capitalist?
  • When you think of super heroes and super villains, who from the VC world comes to mind?

Guest Links:

*Please excuse any errors in the below transcript

Nick: Today #Jonathan Triest and #Brett DeMarrais join us from Detroit, Michigan. #Jonathan and #Brett of #Ludlow Ventures also host the very fun and entertaining video podcast Carpool VC. #Jonathan and #Brett, thanks for coming on the show.

Jonathan: Thank you for having us

Brett: Yeah, it’s our pleasure

Nick: It’s fun hearing you on the other side of the mic here. But #Jonathan, can you start us off with a little bit on your background and also your path to investing in startups?

Jonathan: Sure. So we started #Ludlow Ventures in 2009. Prior to that, we had, we were definitely more in the design world. We had a small design agency, primarily focused on helping founders and companies develop better UI, UI Strategies. And there came a point where I realized very quickly that I wasn’t good enough at designing anything. But I still wanted to work with these companies. So the, the best case scenario was to start investing in them if I wanted to stay attached to them and the tech ecosystem. So that was kind of the creations of #Ludlow Ventures back in 2009.

Nick: Awesome. And how about you #Brett, how did you find your way to becoming a venture capitalist?

Brett: I became best friends with a venture capitalist. That’s really what happened. So I, out of college, I started a company called #Wedit out of Detroit in 2009, kind of the same time #Jonathan was starting #Ludlow. And we happened to be in the same co-working stage, and my desk was right outside his office. So we became good friends just through talking about business and stuff. And then, you know, one day I went over to his house for dinner and the relationship kind of evolved from there.

Jonathan: Is that, you came over to my house for dinner, is that true?

Brett: Yeah.

Jonathan: You did?

Brett: Yeah

Jonathan: You met my family?

Brett: Yeah

Jonathan: Really?

Brett: Yeah. It was all part of an elaborate scheme to make you my best friend. And then when I was done or I stepped down from an active role at #Wedit. I think #Jonathan was afraid to lose his only friend in Michigan. And so he invited me to come on the team. And then after that is when we raised the second fund.

Jonathan: I have no recollection of you coming over for dinner, for what it’s worth

Brett: I came home for dinner, came over like enchiladas and stuff

Jonathan: That’s crazy

Brett: The, the key is, for anybody who wants to become a venture capitalist, find a venture capitalist with young kids and then get their kids to like you.

Jonathan: By the way, I should mention that’s a good strategy. We’re squatting in someone’s office right now and that individual is on his way back, we can see him walking towards us. So we’re about to get displaced.

Brett: Maybe, we’ll see

Jonathan: Maybe he’ll just sit in and join us

Brett: yes

Jonathan: he’s great

Brett: sure

Nick: So you guys did like the formal courting process? Like a married couple, met the parents?

Jonathan: Yes. I asked his parents for permission before I hired him

Brett: Pretty much. Actually my parents were not like thrilled at that, because when, when #Jonathan invited me on board I don’t think he was anticipating me saying like yeah, sure, I’ll do that! And it was before he had raised the second fund. And so there was no money to pay me, so I worked for like 6 to 9 months for free. And my parents weren’t so thrilled about that

Jonathan: I don’t know, I don’t know if you’re legally allowed to just claim that you didn’t get paid

Brett: Well I mean it was, it wasn’t like

Jonathan: I’m not going to , I’m going to admit that that was the case in case you ever try to sue me.

Brett: I mean, I don’t think it’s like, I didn’t even sign anything ever

Jonathan: umm, nothing official

Brett: I don’t think I was on the books. #Jonathan paid me in cash. Is that illegal?

Jonathan: No. That didn’t happen

Brett: That didn’t happen, seriously.

Nick: Alright guys, so a little hat tip to one of my favorite musicians, the late #Glenn Frey of the Eagles. We’re going to be calling today’s topic “No Fun Allowed”. And we’re going to be covering a variety of different questions that are very politically correct. So I’ll let either of you guys answer. Just feel free to jump in whenever you want. And we’ll start out with something easy. So for either of you, what’s the strangest or most shocking pitch you’ve ever heard?

Jonathan: That’s super simple. All the true problems are the one’s that are listening

Brett: Yeah

Jonathan: Well I can give you one that for sure he’s not listening. Someone, someone came to us and literally said, “What is the problem with advertising today?” And I was like, you know, I was trying to think of a sophisticated response, didn’t matter. He looked at me straight in the eye and he said, “There’s no way to advertise on the moon”. And I, I wasn’t positive he was telling the truth or not, or whether or not he was serious. But it turns out he was.

Nick: Wow

Jonathan: And he had like, he had a whole, like, slew of information, he just had this huge packet out, this 40 page book, if I was going to do this. And then the best part was the resources he uses for the capital. He was raising 3 billion dollars, 2.99 of which was going to be used to “hire NASA scientists” to figure out how to advertise on the moon. And a $100,000 to pay in annual salary to like, you know, run the operation.

Nick: Wow

Jonathan: So but that was a bait-and-switch. He’s not, I don’t even know how he got a meeting that he got into our office. Then we just had to be super super nice to make sure he didn’t come back and kill us.

Nick: So you said it was a bait-and-switch. What was the real pitch?

Jonathan: No, the email originally was not that. It was, I think it was one of those like can you help me, just looking for a little advice type of thing. And then full out pitch mode the second we met.

Nick: Unbelievable. Alright, so here’s another softball for you, but, what’s the most frequent startup style faux-pas and which venture capitalist is the most frequent offender?

Brett: Like actually style? Like they wear a sweater vest?

Nick: Yeah. Or a suit? You know, I see a lot of venture capitalists that are trying t play venture capital and wearing a suit and scaring away all the founders?

Brett: I think it’s a pretty red flag that you’re not like an early stage venture capitalist and if you’re still wearing like a full suit and tie,

Jonathan: pocketsquare

Brett: and a pocket square. I think most of the days now, like most of the other VCs I know were pretty casual. Like a wolf in sheep’s clothing we’re trying to look like the people we’re investing in. That makes us sound really nefarious. But its not that, I promise. We’re actually cool people who wear cool clothes. Hey also not true

Nick: I’ll have to look back to see what #Tim Draper was watching on his episode at Carpool.

Brett: Oh I think he was probably wearing something like suit


Brett: Well, he’s got that old school vibe like back in the day.

Jonathan: He’s also #Tim Draper. He can wear whatever he wants

Brett: That’s true

Jonathan: He’s showing up

Brett: Yeah he’s got a lot of credibility, yeah

Nick: Anything from you on that big style faux-pas, #Jonathan?

Brett: Don’t ask Jonathan about style, it’s a joke

Jonathan: Oh that’s really cute, that’s really cute, nice pants loser

Brett: See Jon really doesn’t have an answer, style is not his thing. It’s not my thing either, to be perfectly honest.

Nick: Okay, so no suits and no sweater vests then?

Brett: I, I personally avoid them. #Jonathan’s been

Jonathan: I would rock in a sweater vest

Brett: #Jonathan’s been rocking a new look lately, with the hooded sweatshirt with like a sports coat over it. It’s a really interesting look.

Jonathan: I love it. It’s very comfortable.

Nick: I’ll make sure to put that up with the episode in your profile pic, #Jonathan.

Jonathan: Yeah. It makes me look at least 22

Brett: Yeah

Nick: So next question here is- what’s the most boring or annoying thing about being a venture capitalist?

Brett: Most annoying or boring thing..

Jonathan: I’ll tell you, I’ll tell you the most annoying thing

Brett: Okay

Jonathan: The most annoying thing is like generally, and #Brett won’t agree with me as well, he’s, but I’m going to say it anyway. I, I find that I got a lot and I have a good idea of not whether or not a company or a founder is good quickly, because that takes a long time to discern, but whether or not I’m interested in a specific deal. And I, and I can do it relatively quickly, again, a disclaimer like I’m wrong a lot. But, I think the most annoying thing is like sitting with someone for an hour and a half when I know right away that it’s not a good fit, and trying to be courteous of everyone’s time and still be friendly and, but I have terrible A.D.D. and it’s an uncomfortable position to be put in. Why are you rolling your eyes?

Brett: Okay, that’s great. So now everybody we ever talk to is going to think, hey I wonder if he’s still interested in this conversation after like 5 minutes

Jonathan: Okay listen

Brett: Whatever

Jonathan: But I’d be, actually the truth is, I’m really working on it and I’m trying to be much more transparent say like right away like, you know what, I’m happy to help any way I can, I just don’t think that, like oh you don’t think it’s a good fit? You’ve given me 5 minutes here, thanks.

Brett: Right. It’s just a better practice in general. And it’s something he’s going to work on. If I have anything to do with it. I think, I think the right, the better answer

Jonathan: We don’t do the right or better answer

Brett: No, there’s a better answer. When I say it, you’re going to be like alright I do hate hearing that, that’s super boring, it is anything to do with like fund management. So like,

Jonathan: No we don’t, we outsource that

Brett: Not, not totally true

Jonathan: Okay

Brett: I mean, I do a lot of it

Jonathan: You don’t do any of it

Brett: Okay, alright, fine. Alright that’s fine, whatever. Then yeah we hate talking to entrepreneurs

Jonathan: By the way, no, it’s that, by the way, entrepreneurs feel the same as that when they’re thinking they’re with a VC, they, they get a pretty good sense or indication whether or not they think it’s going to be a good partner for them right away too. I mean, just, it’s not, it’s not such a novel concept. And no one wants to be trapped. Listen, it’s not about VC at all. Let me just take it a step, a step back. It’s about being forced to sit through meetings that aren’t good fits for either parties.
It can be related, you can relate it to any, any part of your life. It doesn’t have to be a VC founder, it could be anything

Brett: Cool.

Nick: Sure

Jonathan: It can be

Brett: So that’s, that’s #Jonathan’s answer. Mine is the opposite, because I love talking to entrepreneurs. I don’t like the, the fund management stuff, the financial stuff, the HR stuff

Jonathan: That’s good, because I got a founder who wants to advertise on the moon. You should sit down with him for an hour

Brett: Cool, I’d be happy too. Then i can provide some constructive feedback

Nick: At least if #Jonathan walks out, #Brett you’ll stick around, right?

Brett: That’s why it kind of works

Nick: Alright. Next we’ve got, if you could pick a handful of investors for the new reality show “VC Survivor Island”, who would you choose?

Jonathan: Oh man

Brett: I, a couple names come to mind, kind of like right off the bar. So one is #Jason Calacanis , just because he is kind of like no holds barred and will say anything

Nick: Yup

Brett: He would be, I think a good, kind of antagonistic feature on the show and poster

Jonathan: He has his own realities show coming up

Brett: Yeah, coming up. I don’t know

Nick: That’s true, yeah

Brett: I don’t know if they’re going to be on an island. What, what is the premise of the show? They’re stuck in a tropical island and they need to invest in deals in order to keep staying? Like if the founders don’t like them, they’ll leave their deal, they get banished? It’s like Lord of the flies actually, they kill each other and call each other Piggy and

Nick: Yeah, who’s Piggy, who’s Ralph?

Brett: I’m a huge #Mark Suster fan. I think he would do well on a Survivor style island show.

Jonathan: I’d pick #Brett. He has a way of like just eating foreign objects and surviving. I’d think you’d actually, you have, he has survivor skills. He doesn’t complain much. And I think that he would just find a corner and hide until the show was over. You might be able to win, persevere

Brett: I would like to see #Jonathan deal with it. He is, he has, if he doesn’t have the right hand lotion he has issues. So,

Jonathan: That is not true. If you could see my hands right now, they’re cracking and bleeding. I’m not that high maintenance.

Brett: They’re not cracking and bleeding because you’re like mainly doing construction work after VC. They’re cracking and bleeding because he’s so frail and the littlest bit of dry air makes you fall apart. He purchased a humidity conditioner

Jonathan: That’s true. I’m a homebody

Brett: So, I don’t know. I guess it’s

Jonathan: Are you done, are you done

Brett: #Jason Calacanis, #Mark Suster, me and #Jonathan

Jonathan: with all of these venture capitalists in the world

Nick: Yeah. I’d love to see who wins that.

Brett: It wouldn’t be me or #Jonathan

Nick: Alright. Here’s another one for you. If you were a unicorn hunter, what startup would be first on your hit list?

Jonathan: Oh. How about unicorn poweruppers?

Brett: No. We’re like unicorn cowboys, where we want to get a unicorn, tame it and ride it. Do you have one?

Jonathan: No. I play nice with unicorns

Brett: Well, I have one. I think, I think #Slack is kind of the answer right now. Because it’s not, it’s not like a, you know, 20 billion dollar company yet, but I think it will be. And the reason why is we’re like starting to get to that point where we saw, you know, not to long ago with any big radar company like #Twitter, #Facebook, where #Slack is being more getting pitches for companies that are building on top of #Slack, which I think starts to speak too where #Slack is going as a platform.

Jonathan: And that my friends is evidence of someone who looked at the questions beforehand and someone who did not

Brett: That is for sure. No,

Jonathan: I had that one right

Brett: Not true. Not true at all

Jonathan: You’re not that smart

Brett: That is. Okay. I’m brilliant, I don’t know what you’re talking about. Also it might be a sign that I’m brilliant that I’ve tracked

Jonathan: Yeah, okay so you cheated

Brett: No, I did not cheat. It’s not that, it’s not like a test, I didn’t

Jonathan: It is, this is a test. It’s an open book test. You got sent the questions too.

Brett: Yeah, right, sorry

Nick: I don’t know, the image of #Brett wrangling #Slack and riding bareback is, is not one that’s very appealing

Jonathan: Yeah

Brett: I don’t think anybody finds that appealing

Jonathan: It might be a good promo though for the reality show

Nick: Whose blog do you read frequently but always leave more confused than when you arrived?

Jonathan: That’s a good question

Brett: That is a good question. I, so, I read a lot of VC blogs. I think the one that is kind of the most, there’s a couple

Jonathan: He asked for one

Brett: Okay. Well, since I’m the only one who reads, I’m going to have to give two answers, one for #Jonathan

Jonathan: Oh, brutal

Brett: I’m going to butcher his name, I actually don’t know how to say his name

Jonathan: Don’t do it

Brett: # Tomasz Tunguz

Jonathan: I was going to say that! I really was going to say #Tomasz’s blog

Brett: Yeah, I

Nick: Yeah

Brett: He’s super technical. Obviously brilliant, but his like writing style is kind of you know I leave a little backwards

Jonathan: I literally was going to say that. I remember posting in one of his blogs and someone was like oh #Jonathan which part did you find particular interest in ? I was like uh oh.

Brett: And then, # Benedict Evans also, write kind of, you know, in depth analysis on markets and stock

Jonathan: and walk away confused

Brett: Yeah, yeah

Jonathan: I mean, you might

Brett: I’m much better at understanding tweets

Nick: Next one we’ve got, Which current presidential candidate reminds you most of a venture capitalist?

Jonathan: Oh man

Brett: Yeah these are real

Jonathan: Listen, obviously venture capitalists are not all the same. And I could probably find a candidate who reminds me of a venture, every single candidate reminds me of a different venture capitalist. And then there are many venture capitalists who are a thousand times more impressive than every candidate right now. I think everybody on earth is more impressive than every candidate right now.
So I really should have looked at those questions

Brett: Yeah, you really should have.

Jonathan: Well, you did look at the questions. So what is

Brett: This really is a tough one, because like some people may take it as a compliment, some people may take it as a negative insult

Jonathan: Yeah

Brett: If it’s a current candidate and you’re going to relate a VC to it, then for sure it’s going to be an insult

Jonathan: Yeah, I think so.

Brett: I think # Brad Feld reminds me a lot of George Washington. And so

Jonathan: He said current candidate

Brett: I know, I’m trying to like skirt it by, I’m flagged if I relate it to George Washington, right

Jonathan: # Hunter Walk and Abraham Lincoln because they are similar

Brett: #Hunter Walk, yeah I see that. He is tall. #Hunter Walk is surprisingly tall. I think Abraham Lincoln was like 6’5”. #Hunter Walk’s at least 6’3” or 6’4”. So again, we’re in a, I think we’re choosing Hunter on this one because we rely on being friendly to stay in business.

Nick: When you think of super heroes and super villains, who from the VC world comes to mind?

Brett: Super villain is tough.

Jonathan: Super villain is who’s on like, you know, what, it is basically the same thing as what would they, whether they remind you of a candidate to that

Brett: #Naval Ravikant is definitely Yoda for sure

Jonathan: I think he’s just brilliant and says the most profound things and

Brett: and he has awesome force powers that he doesn’t really show a lot of people

Jonathan: Yeah he definitely has, he definitely has the force

Brett: Yeah

Jonathan: That’s a good one

Brett: Yeah, that’s a good one.

Jonathan: And #Brett is Dr Doom

Brett: Yeah, I’m evil

Jonathan: I don’t know what Dr Doom, what was Dr Doom’s powers?

Brett: It was like magnetism and stuff

Jonathan: You’re definitely not Dr Doom. You’re more like Catwoman. I mean, you choosing to ignore that?

Brett: Yeah. I think I mean #Brad Feld could be like openness man.

Jonathan: What are you talking, there’s no openness man?

Brett: That would be his thing. He’s like, he’s open. He like kind of wrote the book

Jonathan: I know what #Brett. There’s no such thing

Brett: Okay

Jonathan: We’re not creating we’re eating

Jonathan: No we’re trying to put them in positions of super heroes that already exist

Brett: Fine. Then maybe he’s like a super villain like brainiac.

Jonathan: Dr Xavier

Nick: Yes

Jonathan: Professor Xavier

Brett: Professor Xavier, yeah

Jonathan: Okay. That works. That’s definitely a super villain

Brett: Yeah

Nick: Great fun there in Part 1 of the interview. In Part 2 we will cover questions including Peter Thiel has famously asked the question: “What’s something you believe to be true, that no one else does?” Where I flip that question around and ask the guys, “What’s something you don’t believe be true, that everyone else does?”
Who wins the biggest nerd trophy at the next annual Ludlow investment team awards?
The Mount Rushmore of Venture Capital has been commissioned. Who’s on it and who’s most jealous not to be on it?
And finally, I turn one of the guys questions back on them where I ask them the famous questions from Carpool VC: “There is a curtain. Behind that curtain are three people. And you have to marry one of them after asking one question. What’s the one question you ask?”
The second segment here does not disappoint, so stay tuned for that one. Until then, remember to over-prepare, choose carefully and invest confidently.