A Venture Capital Index Fund - with Marcelino Pantoja, founder and CEO Measurement

**Ray Rike** (0:00)
Hello, I'm Ray Reich, founder and CEO of RevOp Squared, and your host of the Metrics that Measure Up podcast. We talk to a wide variety of B2B, SaaS, and Cloud thought leaders, executives, investors, and people just like you to discuss the metrics and benchmarks they use to make metrics-informed decisions. Now on to today's show. Welcome to today's episode of the Metrics that Measure Up podcast. Today, we are joined by Marcelino Pantoja, founder and CEO, Measurement. Today, we'll be covering three main areas with Marcelino. First, venture capital's role to help entrepreneurs achieve product market fit. Second, capital options for entrepreneurs following product market fit attainment. And third, how will public and private market options blur in the technology industry over time? Marcelino, please take a moment to give a brief overview of your journey to becoming a guest on the Metrics that Measure Up podcast.

**Marcelino Pantoja** (1:12)
Thank you, Ray. It's wonderful to be here with you and your audience. yes, in terms of my background, I actually started out as an LP, working at the investment office for Stanford University. It is pretty unusual for most people in a venture. In my case, I started out as an analyst, as a two-year analyst and actually stayed on for six years, where I got to oversee this direct investment portfolio of over 500 startups. This unique portfolio, just to give a little background there, it was started by Stanford VC alums who wanted to pull together their own capital and invest in their own deals, bypassing their own fees and carry. The outcome from it, the results of it, would be then given to a specific Stanford entity. My role as an analyst was mostly portfolio management, but it gave me a wonderful introduction as to how VCs invest in startups, how to evaluate them, and work with them. Also, I got to meet quite a few senior GPs of every Sand Hill Road firm and beyond. Because of it, just to add a little more to it, I worked with a gentleman named Greg Sands to build a new fund called Costanoa ventures. In Greg's case, he was a 13-year veteran at Sutter Hill. Then from there, I got to work with other firms such as Amity ventures and Tribe Capital. Then of course, now I'm working on a new fund with a gentleman named Tim Connors of Pivot Norris, who's a CDBC along with a former founder of a Sequoia-backed company called Wanolo. His name is Jeremy Burton. It was because of that at Stanford, I got my introduction to venture and startup in general.

**Ray Rike** (2:41)
Well, I'll tell you, Marcelino, the Stanford startup ecosystem, there's no better place and he spent six years there. In fact, I read some recent research where they looked at where B2B tech founders were from, which university, and Stanford was by far the top, like 465 of the 800 were from Stanford. So what a great experience. And when we first met, it was interesting. You had a different perspective regarding traditional venture capital. And specifically, you thought that a venture capital firm responsibility at the earliest stage of their portfolio companies was to help their company attain product market fit. So my first question is, how do you define product market fit? And then we'll get into why you think VCs have the responsibility to help the founder get there.

**Marcelino Pantoja** (3:33)
I borrowed really a definition of what product market fit is. And it's really what I believe what Andy Rachleff has done an incredible job of sharing, is that product market fit is when you build something that people desperately want. Especially for those that are building enterprise software companies.
If you're building something and you take it away from them and they fight you before even allowing you to take it away, then you have product market fit. And then on the consumer side, he shared that if what you're building, it's spread by organic word of mouth, then you have product market fit. Otherwise, until then, you just have to figure out and find your audience, if you will, in order to get that. So that's what I've learned what product market fit is.
But to answer the other part of the question, how do you get to product market fit? That's where I believe that if a VC is an investor in your company, they had to have the skill and experience to help you get to that part, to go to what Steve Blank has called customer development phase, in order to find product market fit, to experiment and iterate both on the product as well as in your go-to-market strategy, to find product market fit. And that's incredibly hard. That's also the moment was incredibly risky.