Chris Farmer, SignalFire Founder & CEO on AI-Native Venture Capital

**Grace Gong** (0:03)
We are live, one sec. I feel like whenever I click on go live, I'm streaming on the six different platforms, so one of the platform is always asking me to relog it. Done.
Hi, Chris. Welcome to Venture with Grace.

**Chris Farmer** (0:17)
Great. Thanks for having me.

**Grace Gong** (0:19)
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I want to begin with Chris. I feel like you have such an amazing career in Venture and obviously SignalFire is one of the best early stage firms, and I want to start with, I feel like you invented a category of using data and helping to source DOs before nowadays, everybody is using data to do everything.
The other part is you also build out the talent scouting agency. We have MyCar show, we have Wayne, and I feel like it's such a really, you have a lot of insights back in, I want to say 20 years ago, but 10 years ago. Before everybody else now, it's using it as a default. Maybe we could start with, what were some core lessons that you've learned early on that shaped you into who you are today?

**Chris Farmer** (1:37)
Yeah.
Early on in my career, I was working in the industrial automation space in transportation, and that was an area where there was a tremendous opportunity to use data to help optimize operations and whatnot. I came with that mindset into venture, and I was based in Boston when I first re-entered venture at Bessemer Venture Partners. I just always felt FOMO. I wasn't in Silicon Valley, I wasn't in the right rooms, and so how was I going to compete from another geography? It just felt like Boston was shrinking in comparison to California.
I was covering wireless when the iPhone and the App Store came out. I'm like, there's got to be a way to make sense out of all this noise. And so I started applying Algos to track the App Store in 7 So it's been almost 20 years since I've been applying Data to Venture. And it worked really well for a handful of things, viral social gaming types of apps, but wasn't going to work for other things. So I guess the last 20 years has been the quest to distill startups down to their atomic units and then track as they come together and form the next new exciting company.

**Grace Gong** (2:57)
For sure. I think to name some of your portfolios. So you have worked at two of the most iconic venture firms, like General Catalyst and Bessemer. You have invested in LinkedIn and BenchLink, a lot of Stripe, Venmo, a lot of these top companies.
I want to start with, since you have worked on these really critical deals, especially in the past, in the GC era, you were leading their seed program, which is where SignalFire thrived today. How do you think about the seed investing landscape has been changing from back in time to now? And what do you think now, it's like an undervalued segment, since back in time, data was kind of undervalued. But nowadays, since everyone's using data to do everything and everyone's building their own AIH and their own firm, so how do you think about what would be the alpha for today that people are not really looking at?

**Chris Farmer** (4:00)
Yeah, I mean, look, I think at the end of the day, almost every great firm has built from the bottom up, right?
They started at Seed, they hustled with founders, they built good relationships, and they grew with the success of their companies, whether that's GC, Lightspeed, Andresen, Sequoia, Kleiner, every major firm basically started from the bottom up. It's been very hard to come top down and there's some very big name, financial institutions or tech agglomerates that have tried to do that with limited success. And so fighting from the inside, allied with the founders and with that goodwill is really the key to the game. So I think seed is always going to be a critical component because it's that first foundational relationship with a founder. And so the core of that is people, right? And in the early days, many of these companies go through, you know, multiple pivots on their way to finding product market fit. So it's not really something that you can analyze, right? Even with AI, right? All you can do is track down sort of the best people, and you have to have a global perspective on like where the world is going. Where are the holes that need to be filled? And how do you get to where the puck is going before all your opponents see it? So a lot of people, even if they're using AI, it's often just very reactive. And so you have to rethink through the entire business model from beginning to end in order to do that. So for us, everyone always focuses on the sourcing side of it, which is only one component of being successful. I mean, for us, it's the entire operating system of the firm. So it's involved in sourcing, finding those opportunities, but then picking.