Uncapped #10 | David Tisch from BoxGroup

**David Tisch** (0:00)
We don't want to be your best investor, we want to be your favorite investor. And favorite investor means you like us because we talk to you like humans, and we don't mislead you. We ideally under promise and over deliver. So we would like to help. We just don't want to proclaim we're going to make your company great.

**Jack Altman** (0:20)
I'm really excited to be sitting down today with David Tisch of BoxGroup. David, thank you for making the time to do this with us.

**David Tisch** (0:24)
Jack, I'm thrilled to be here.

**Jack Altman** (0:26)
The thing I want to start with is that BoxGroup has sort of like defied a certain conventional wisdom, which is that VC funds, the general life cycle is you kind of start small, you're collaborative, you do seed, and then the way that you scale is you do bigger checks, you own more higher concentration, you go later stage, and that's the typical model. In most cases, that's right. That's the arc that most have followed. But you haven't, and you've been really successful basically scaling up this thing that everybody thinks you can't scale up. And so I want to start with the way that you think about your model, how it works, the way you invest in companies, and just like the shape of BoxGroup.

**David Tisch** (1:06)
Yeah, I think first off, like the word venture capital captures so many different types of businesses. So to me, there's like three stages of VC. There's seed, there's A and a little bit of series B, and then there's B and later.
And B and later is a finance job for the most part that involves needing to win, but it is just plowing capital into things that are working and helping them scale. There is more of a financial orientation to the work that gets done there, and the people that do that work have a different lens in terms of what they're looking for. So I don't believe I work in the same industry as most of those people. I think it's series A and B, there's still an art to it. The art is getting in front of companies, convincing the company to pick you, and helping form the shape of whatever that narrative is going forward to get them to that capital point.

**Jack Altman** (2:05)
There's like this quip that like everybody in venture who invests a stage later than me is like a spreadsheet jockey, and everybody who invests earlier than me is like throwing darts. It's like that.

**David Tisch** (2:13)
I'm a dart thrower.

**Jack Altman** (2:14)
You're a dart thrower.

**David Tisch** (2:15)
I think that at Seed, it's messy. And I think you have to appreciate how messy your job is. And I think to your question, most people don't want to stay in that mess. That's not the passion. That's not the easiest place to play. It is easier to have a concentrated portfolio in the sense of if you're going to do two to three deals a year, you get to have a different filter for how you go about your job. I don't think it's easy in the sense of winning great deals, but I think it's an easier model to marry yourself to for a career. It's a bit more stable. I think seed is just a mess, and I think it's a happy mess for me. I love doing this. This is a place that we happily live at forever, and we're not going to evolve. We're not going to change.

**Jack Altman** (3:07)
What do you think people are misunderstanding when they think that this model... People got it wrong, obviously, because you did scale it, but what did people misunderstand when they're like, this doesn't... In order to do a big fund successfully, you have to get out of collaborative seed, basically.

**David Tisch** (3:22)
I think there's two parts to your question. One is, why don't people stay here?

**Jack Altman** (3:26)
Yeah.

**David Tisch** (3:27)
And then two is, why did you stay here? So I think the reason people don't stay here is it's hard to scale AUM, and AUM is the thing that allows a venture firm to scale. It gives you more money in a fee stream. It gives you more scale to return more capital, to make more money at its core. And then you like, on the other side of it, you don't, you're not as important, in a true sense of that word, right? You're not sitting on a board. You don't like take credit for the company's success. You're just a seed investor. And I think to your point, like we like to look at the later stage investors as spreadsheet jockeys. I think people like to look at seed investors and write them off as like random. And I think that there's some tension in that dismissal of what happens at seed. To me, what we do at BoxGroup is we meet people at the beginning of their dream and we give them some money to help them achieve their dream. And there's like a romanticism to what I just said that is the art of why I love this. Is you meet literally a person who has an idea and then five, seven, 15 years later, that idea is important. And it's an important part of the world. It's an important part of an industry. And that narrative, that impact, that that person goes out and creates, it's like amazing. And to watch that from day one, to me, is very different than watching it from year two.