Has venture capital lost the plot?

**Samir Kaji** (0:09)
Welcome back to another episode of Venture Unlocked, the podcast that takes you behind the scenes of the business of venture capital. I'm your host, Samir Kaji.
My guest today is Micah Rosenbloom, managing partner at Founder Collective, one of the longest standing and respected seed firms in the industry, with early investments in companies like Uber, The Trade Desk, and Coupang. What makes Founder Collective atypical to most successful firms is their decision to keep fund sizes small. In fact, despite their success, they've never raised a fund over $100 million in a market where nearly every one of their counterparts has scaled up dramatically. In this conversation, Micah and I dig into why they've stayed so small. The data behind it, including the study his team ran on 25 years of venture capital exits, that found that the median outcome of the top 500 exits over that time frame is about $2.7 billion.
Micah is a two-time founder himself and someone that I find to be a very clear thinker when it comes to venture capital. I think you'll really enjoy this one. Now on to my conversation with Micah.

**SPEAKER_2** (1:08)
Samir Kaji is the CEO and co-founder of Allocate. Allocate and Venture Unlocked are independent of each other. Any statements or references made by Samir or his guests regarding third-party investments or securities are solely their views and opinions, and are not intended as investment advice or an endorsement of such parties or securities by Samir, his guests, or Allocate. Allocate or its clients may maintain relationships with or investment positions in guests, third parties, or securities mentioned in this podcast.
This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

**Samir Kaji** (1:47)
Micah it's great seeing you, man.

**Micah Rosenbloom** (1:48)
It's great to see you. The only thing better would be if you were here in New York in the 98 degree weather, but we'll do it remotely to start.

**Samir Kaji** (1:55)
I think I'm going to pass on that. Although I did get some of the New York heat and humidity just a few weeks ago when I was out there.
Definitely a far cry from the Bay Area where it's so temperament here, but I always like to see you and you posted a couple of things that I found interesting which inspired this conversation and I think they're very topical. Before we go into those posts and dive deep into some of the observations you had in the Insights, why don't we start with the early days of you joining Founder Collective in I think it was a year two or three?

**Micah Rosenbloom** (2:26)
Yeah, I mean to start, we really kind of built this firm randomly and not really out of our own experience. So as the name suggests, we're all founders. I graduated in 1998 in the height of the.com boom and I started working in Endeavor. They were an upstart talent agency and I thought that was the coolest job ever that I got it for working with Ari and Emanuel and Ari Greenberg and like movie stars and so forth. Then there was this.com thing and I was like, wait, that may be the cooler thing than even working in Hollywood.
My roommate and two other friends, we started a company and that was really like the beginning of my entrepreneurial venture career because one of our friends from college, Bill Trenchard, said, let me join your board. I can show you how to fundraise. We were like, oh my God, this is amazing. We can be 21 and raise millions of dollars. Turns out you still have to build real value. That's a whole nother thing, but we bought the URL handshake.com. I wish it was the handshake of today, but we were early owners of that URL. And yeah, we built services marketplace like Thumbtack or Handybook. And ultimately it failed. It's a long story we could talk about another day, but I just got caught by the bug. I was like, this is amazing. Like we can build our team, our own culture. We can hire the types of people we want. And people worked night and day. That was good and bad. And we can birth a product that is like something new to the world. But we failed. And it was a, I've been thinking a lot about this. I was like almost a bit depressed when the whole thing, you go from the top of the mountain to the bottom very quickly. And I think that I like, I think about that lesson often now that like things are fragile at all stages. You can be raising and we raised $25 million for that company in two and a half years. And then I had barely a penny in return.