David Gardner (Cofounders Capital): We have a joke that if we don’t understand something in the first 2 minutes, we won’t invest.
30 Jul, 2021
Heidi Roizen is a venture capitalist, corporate director and ‘recovering’ entrepreneur. She’s a partner at Threshold Ventures as well as being a corporate director for DMGT (LSE:DMGT), Invitation Homes (NYSE:INVH), Planet, Memphis Meats, Lumity and Polarr. For fun, she co-leads Stanford’s Threshold Venture Fellows Program in the Management Science and Engineering department and also serves on the Advisory Councils for the Stanford Institute for Human-Centered Artificial Intelligence and Stanford Technology Ventures.
Heidi started her career as co-founder of software company T/Maker and served as its CEO for over a dozen years until its acquisition by Deluxe Corporation. After a year as VP of Worldwide Developer Relations at Apple, she then became a venture capitalist in 1999. Heidi has undergraduate and MBA degrees from Stanford and is the proud mother of two kids and two rescue dogs. She loves working with entrepreneurs and executives to build great companies. She loves doing things with a creative flair. Heidi also truly enjoys the role of corporate governance.
I started my work life as an entrepreneur by founding a software company with my brother. Initially, we started way back in the era of package software era for CPM, DOS PCs and ultimately Macintosh and Windows computers. Back in the days when you actually shipped software in boxes, we were a software developer of word processing, spreadsheet and graphic image portfolio is desktop publishing. We did a lot of desktop application software. There was a word processor called Right Now that was very popular on the Macintosh, a line of products called Click Art, which was graphic image portfolios. You can still find those that are still available somewhere, but we sold the company. Unfortunately, there is no chance that you could use some of our products. They are all ancient history now. We sold the company in 1994. So, that is a very long time ago.
We ran it for over a decade and after that, I was recruited into a venture capital firm as a partner in 1999. So, I spent the first 20 years of my life on the other side of the coin as an entrepreneur.
I’m a partner at Threshold Ventures and most people know us as a spinout from the former DFJ Capital which was known across consumer enterprise and deep tech investing. Threshold is the entire venture team that was formerly DFJ spinout a little over a year ago. We are an early-stage VC fund based in Silicon Valley. We invest primarily in North America, but we have done some investing in the UK, Europe, Southeast Asia and Australia. We do invest outside of the US as well, but primarily US-based, typical series A and I would say the average check size is $7 million, give or take.
We’re investing in companies that have a minimum viable product, they’ve got some customer tests going and have a handful of employees. Usually somewhere around 7-15 employees, just to ballpark. We do a fair bit of enterprise SaaS. Current companies in our portfolio that have achieved some level of recognition: Talkdesk, Front and LaunchDarkly – enterprise application software companies; Remitly – finance space. We do a fair bit of healthcare. Recent investments include Brightline, which is telemedicine mental health care for youth, TIA, which is women’s health and OODA Health, which is more back office. We do many things in the back office. We were investors in Livongo, applications for health management and maintenance. We look at things that apply AI to health – a UK based company called Viz.ai. We are looking at the application of AI across various application areas. We see it in factory things like Elementary Robotics. We see it in data processing by a company called CrowdAI that we’ve recent invested in. So, we look at AI not as itself but applied to solve a problem.
We are also looking at consumer things. Our company is not as well known for consumer-facing, but the companies that are known to consumers, like a company in the property tech space called Loftium. It is a kind of a three-way marketplace between Airbnb customers, people who want to rent homes in nice areas and landlords who own those homes. But again, we are providing software for the management and it’s not as much consumer-facing. We are certainly interested in the area, but we don’t have a big footprint in the consumer.
And then last but not least, we certainly have been known for some of our investments in deep tech. I personally serve on the board of Memphis Meats, which is a cell-based meat company and I’m super excited about the company and the space. I’m also on the board of Planet, which operates the world’s largest satellite network and we imaged the entire Earth landmass every day. And until recently I was on the board of Zoox Inc., which was one of the leading fully autonomous vehicles companies. They are working on a full ground-up vehicle for passengers that obviously can be used for any form of mobility. Fully autonomous vehicles of course are still a little way off in the future. The company was sold to Amazon a few months ago and I’m no longer on that board, but I’m still a fan of it and cheering the company from the sidelines. I am a big believer we are in the opportunity that they present. It is an incredibly complex technological challenge to build a fully autonomous vehicle. And if you look at the players who are left in the market, you will see some of the most well-capitalized companies on Earth. Amazon, Apple, Google. Those are the biggest contenders in the autonomous vehicle space. It is very capital intensive space, but it is a huge market opportunity.
This is one of the challenges of being an early-stage venture capitalist. Most early-stage VCs have a small fund and a small number of partners who vet the deals and her poof group pursue early-stage companies. And I believe you need to have some elements of focus. For example, we do not have any social media type companies in our portfolio. It’s just not a sector that we’ve spent. We don’t have a lot of domain expertise or muscle memory in that space and so, we don’t do that. Also, we, I think as many very early-stage companies, are limited in the amount of capital we can deploy. Companies that are very capital intensive are probably not a good fit for our firm. We certainly have done some very capital intensive companies in the past. Planted and Zoox are two of them. Obviously, you have to put a lot of manufacturing behind those companies.
Certainly, our predecessor firm was known for investments like Space X, Tesla and Solar City that are fairly hefty iron and they’re big capital-intensive companies. I would say that probably it is not an area of focus for our future and we are looking rather at companies that are more capital efficient. That one gets farther along with the capital that an early-stage investor can deploy.
One of my partners, Chirag Chotalia, came to us from Pritzker and he was involved with things like The Honest Company, Dollar Shave and Casper. He’s got tremendous knowledge and experience in the space, but we haven’t done a direct to a consumer product company. We’re certainly willing to look at them and Chirag is our subject matter expert on that, but it hasn’t been one that we’ve pulled the trigger on in our fund. We are known more for enterprise solutions. Fintech, manufacturing, AI-related, robotics and healthcare would be more of the areas that we’ve got the advantage.
I think we have a restriction. For us, it’s more an issue of when you’re an early-stage investor you need to be very involved with your portfolio. I think that all of us have been put to the test with COVID-19. We’ve all been working from our homes since March or April when the first lockdown happened. We’re learning that you can still be very involved with the company while never being physically in the same place. Perhaps that will open our abilities to consider companies outside what we used to call the nonstop flight.
If we can get to it a nonstop flight it’s probably still okay. But, as I said, while we primarily have invested in North America, we do have some portfolio companies in the UK and New Zealand. We certainly can go outside, but I think that the challenge is to make sure that we have a great relationship with the entrepreneur and that we can be really helpful to that company because we invest in a very early stage. I think one of the value adds you bring as an investor is your network and ability to help recruit people and talents at the board level, help them raise money, open channels and do business development for them. All of that relies on a network and an ecosystem and if you’re trying to do that in a country where you don’t have the platform it becomes difficult.
I wouldn’t call it a restriction, but it’s rather friction. The best investors go where they understood they have domain knowledge and they can build value and be of help. And so, to us, I would say those are the sectors we understand, the geography where we have operated and where we have a footprint. If I look at our portfolio, we have deals with companies in New York, Seattle, Los Angeles and many in Silicon Valley and Denver. We definitely operate mostly in the US. Certainly, I’ve been in discussions with some companies in Toronto and Vancouver from Canada. Also, we have a company based in the UK and a company that has its major part of operations in Portugal.
Today companies are more global. And the question is more, does the company need that you have a global footprint? Is it competing on a global platform and is there a sufficient need for operations in the US? That is the market that we play in. I would say that our target region is primarily the US, but we’re certainly willing to look outside the US.
All startups are unusual in many ways. Some of the ones I mentioned, Zoox and Memphis Meats immediately come to mind. Memphis Meats has an unusual mission, that is to allow humans to consume meat without ever slaughtering animals and still be able to eat real meat. That’s a pretty tall order. It takes a tremendous amount of technology and innovation and it’s quite a bold and audacious thing. When you think about the fact that 40% of the world’s arable land mass is utilized in creating meat for humans to consume that is an unsustainable untenable thing and the world’s appetite for meat is going up. It’s a multi-trillion dollar market. I believe that plant-based proteins, while they can certainly be useful for some part of the market, are not going to completely satisfy people’s desire for meat. I think that’s one of the more unusual and extremely audacious companies we have ever invested in. I’m very excited about it.
We are investing early in the current market. I would call it an early series A. Our average check is $7 million plus or minus a few. Maybe we go up to $10 million. Usually, the sweet spot is around 6 or 7 million dollars. We might go as early and as low as 3 million. Something like that. We are not a seed investor. We don’t tend to do the $500K or a million dollar check with two people, a dog and a laptop as I like to call it.
We generally are investing in companies that have a little more traction. Although, we’re certainly very happy to meet with seed-stage companies just to get to know them and have them get to know us, that particularly obviously, if they’re ones in the sectors in which we invest, that we can build a relationship for the future. But generally, over time we may put upwards of $15-$20 million into a company.
We’re happy to be either co-investor or the lead. Generally speaking, we are the lead investor in the deals that we do. Sometimes we split it 50/50 and we do syndicate. Somebody contacts us and says, that he’s doing around 7 million and he have a stub of a million left. Would we like it? The answer is probably no.
Generally, we try to know our sectors very well. We try to not make competitive investments and we work very hard for the companies we invest in. We’re not really in the market to take tiny positions of a lot of companies. We would rather have a meaningful ownership percent, when investing, somewhere around 15% give or take of the company post the round that we’re doing. And in most of the deals, we’re the lead. In most of the deals we have a board seat. Again, it’s not a requirement, but generally speaking, we’re investing in more ways than just the money.
There is no set of hard and fast rules. What we look for is, first of all, we want to understand the market that you’re going after. The total available market. We’re looking for substantial things. As I mentioned, Memphis Meats is way up a multi-trillion dollar market. We’re looking for markets that are undergoing rapid expansion or disruption.
One of the questions we ask is why now? Why is now the right time? Let’s use Memphis Meats as an example. A lot of the development and technology that one needs to prosecute the business were only becoming available and commercialized in the last few years.
We look for a founding team that has the right level of domain knowledge, passion, firepower ability, drive and tenacity to do this. We really like to understand entrepreneurs. What have they done that has led up to this moment that would help them be a successful outcome?
Not only do we focus on a sector, but we generally don’t make multiple investments in the sector. It’s important for us to pick what we believe the best company in the space is. We don’t play the whole field of the entrance. Generally speaking, once in a while, we invest in things that are not yet ready for customers. I’m particularly in these disruptive spaces. When we invest in things like Zoox, Memphis Meat, or Planet, from the time we invest to the time they can generate the first dollar of customer revenue is significant because of the technology and infrastructure that has to be in place before you can ever get a dollar out of a customer. But the vast majority of our investments are companies that can develop some customer relationship fairly early. I think one of the beauties of cloud-based enterprise SaaS is that you can be up and running for very little money and meet customers’ needs for very little. You can get going pretty quickly.
Generally speaking, if we’re going to make an impact, the normal criteria for series A deal today is that you have an MVP and some customers. Maybe they are not paying you a lot, but the companies that we’re looking at have usually gotten close to a hundred thousand dollar monthly recurring revenue. It is about this size of the company when we’re coming with a series A. And those companies have raised money before they’ve raised angel rounds, or they’ve raised something.
Well, it’s a market! When you’re buying equity, you want as much as you can for the dollars that you’re going to invest in. The entrepreneur generally wants to get as little dilution as possible. It is a negotiation, but I think always in the deals we do, our company and the entrepreneur have reached a fair deal. And it really depends. Some companies are very early, they might have a valuation of $10-12 million. If they are later, they might have a post-money of $20 or $25 million. There is no set rule here. It’s very much a negotiation and an evaluation.
Our firm has been around for around 35 years. If you look at the history of the firm, we do Skype, Hotmail, Baidu, Skype, Tesla Space X and Box. When you’re an early-stage investor, you’re probably going to be involved in the company for 5-7 years. If I just look at the recent history of the Threshold Ventures fund, for example, there was a company called Nirvana. We invested in them and then Intel bought it. We had only been an investor in that company for maybe two years when that company was acquired. A company like Lovango went public recently. It was a very successful IPO. We were in for probably 4 or 5 years. In some companies like Box, we were in for probably 10 years. In companies, especially the ones that take a long time to build, like Planet, we’ve been in around seven years. And we’re still away from having liquidity on a company like Planet.
So, it really depends on the company and the arc. On average it is somewhere around 6-7 years. I joke that it’s longer than the average marriage in the United States. Take your VCs very carefully.
When we look at any deal, we want to have the potential to say, can this return the whole fund? We are in the home run business and not in the first base hit business. When you are a growth-stage investor or when you are investing in lots of metrics and you are later in the game and the companies are predictable, there are predictable revenue streams and they’re very easy to quantify and that’s not the game we are in. In the early stage business, you are every time you’re trying to hit a home run. And we are not going to invest if an entrepreneur comes to us and says to give him $3 million and in three years he’ll triple our money. That’s not interesting to us.
We want an entrepreneur who says give me the $3 million and then I’ll come back to you for another $4 or $5 million in the next few years. Then I’m going to raise another $20 million. And in the end I’m going to have a company that’s worth hundreds of millions, and you’re going to get a 10X on your money. We’re also in the high-risk business, and many of the deals don’t return that capital. You need your winners to fill the bucket. Because you are in the risk business a lot of times, it’s a couple of companies in each portfolio that will return the entire fund.
I think good funds generally return somewhere in the 3X the whole fund over the life of the company. And in order to do that, if half of your companies don’t return more than paid-in capital, the rest of them need to do very well.
I lived in Scotland for a while and I went to the entrepreneur pitch thing. It was about 10 years ago and everybody was pitching: «You can put a million pounds in my company and I’ll sell it within three years and you’ll get 3 million pounds». I asked somebody who was organizing the conference, why did they do that? Why everyone has such low expectations and such quick exits. And it turned her out at the time that there was an individual investor tax incentive that was very oriented towards those kinds of things. The fascinating thing about that is if you orient towards small outcome tuck-in acquisitions, you’re never going to build the next Facebook or Google.
Every single pitch was explaining how quickly seed investor could get their money back. And it was such a comparison, a contrast to Silicon Valley where when you pitch someone, you never talk about how quickly you’re going to get a small multiple of your money back. You talk about how it’s going to be a unicorn and a billion-dollar outcome. This is a different mindset. And that doesn’t mean that every company should be a unicorn. I think there are many awesome businesses, that are not designed to be venture-backed. That can be wonderful businesses and great entrepreneurs, but the venture business as our firm is a unique instrument for a very small subset of businesses. We do hope that we are building companies that get liquidity in the hundreds of millions to billions of dollars.
We don’t do a lot of physical products. We are doing software and generally speaking, most software today is in the cloud where we want to invest in the best of class. We want to invest in flexible architectures, on the latest platforms and we want them to be platform adaptive, some of the technologies are mobile-first because that’s where the market is. We are looking at modern architecture technology companies. We do have some things in different spaces. A company like Elementary Robotics, which is in the robotics space. We have done different things. Memphis Meats is ultimately going to run a biology plant and process. Those are more the exception than the norm. I would say the norm is software.
We’ve looked at e-commerce and we have almost invested in some spaces in e-commerce. We certainly have invested in the financial side. If you would look at something like Remitly, which transfers money, ex-pats transferring money back to their home country is really the vast majority of it. Many of those unbanked people, we certainly are comfortable with that. We’ve been looking a lot in the finance and credit card industries right now, but we haven’t the trigger on anything in that. We’re certainly open to it.
Actually, we don’t have a standard checklist. To be honest, we’re looking for talent. We’re looking for people who have drive, passion and tenacity. We’re seeking people, that when you look at them and they’re doing something, they have a reason why they’re doing it. And usually, the reason is that they are experts in the field. I realized that, but a need wasn’t being met and I decided I was qualified to build a team and meet the need. That means the person has some domain experience, right? It’s always a little questionable to me when somebody is trying to do something in a market where they have absolutely no experience. On the other hand, markets get disrupted by people who are not insiders sometimes. It varies deal by deal there. If there was a perfect playbook for how to be a great series A venture capitalist, in terms of the filters one uses, this business would be a lot easier than it is.
We don’t do seed-stage investing, and by the time we’re investing the companies have been around a little while. Maybe a year, two or three. They usually have already a handful of people. They have had some seed investors. There’s an origin story for every company. Often companies start with just one or two people and an idea, but that’s not the stage where we are involved.
I certainly can meet those companies. I have one company right now helping. We’re not an investor, but I co-teach a class at Stanford. And usually, every year one or two of the students will end up doing a startup and I will be helpful to them. Both because I’m their professor and I like to help them, but also because someday they might be a company that we would back. And we would like to be first in line. Today the best entrepreneurs have to pick up the money they take. It is marketing and the best ones are going to have multiple offers and multiple term sheets. And we want to be in line to be the best choice.
And part of the way we do that is to get to know these companies before they’re ready for their series A investments. I can’t think of the last time we backed a single person because that’s not the stage we invest in. We did a very early stage deal where at the time when we invested there were only four people in the company. But again, that was a repeat entrepreneur who sold his last company for hundreds of millions of dollars and we have a high degree of comfort with that entrepreneur, even though the company wasn’t fully formed.
Let’s speak about a family business that is a more common situation for us. It’s not a deal-breaker for us. We have had some situations in the past where that hasn’t worked. On the other hand, I started my company with my brother and look at people like Houzz. I love that company. That’s a husband and wife team. It’s not one of our investments, but I don’t think that a family, siblings, spouse are a deal-breaker. I just think we have to be cognizant of that. We have a couple of companies where their siblings are on the cofounding team. They were successful so far.
I’m going to say a thing that entrepreneurs don’t like to hear, but I think it would be wise to do this. You don’t want a really fast process, just like you don’t want to marry somebody after three dates. The venture capital entrepreneur relationship is very deep and important and it is something where you need to have a great degree of ability to communicate. You need to have an alignment of your ethics. You need to have a lot of trust. I don’t think you build those in one or two meetings.
That said, sometimes deals can be very fast and competitive. We hear about them late in the game, we have to come in, build that relationship, do our due diligence and get comfortable as does the entrepreneur in a very short period. It’s not out of the realm of possibility that between you meet an entrepreneur for the first time you wish a term sheet a week later and the deal is done four or five weeks later. That’s okay. That’s not impossible. Those are usually your highly competitive deals with a lot of traction. It’s not that it’s hard to diligence that because there are people to call, but I think that both for the entrepreneur and the venture capitalist the best thing is to acquire that late.
I have a student. He’s been one of the best students I’ve ever had. He started a company. It got seed funded by a very reputable seed fund firm. I’m keeping in touch with them and I’m talking to them every few weeks and presumably, when he’s getting ready to raise his A, we’ll be able to meet and make a decision very quickly within, hopefully, a matter of days.
Does that mean it only took days or does that mean it took years because on the other hand, the time since I’ve known that person might be years. In a deal we’re doing right now one of our partners is known the person for 10 years. But we’re only investing right now and the deal came together very quickly, but there was a lot of history there. My advice to entrepreneurs is to pick the VCs. You want to have one or two or three years in the future and build those relationships now because the best deals are the ones where the relationship pre-existed.
We probably touch a hundred deals for every one we do. And we’re probably doing 8-10 deals a year. It depends. That’s an origination. There are also follow on deals where we’re already in the deal. And we’re looking at thousands of companies a year for the deals we do.
They come from personal references. They come from outbound, where we’ll be interested in a sector, we’ll be following people and what they’re doing and reach out to them. Sometimes they come from others, upstream and downstream investors who know us. Maybe someone will look at a deal and it’ll be still too early for them, but they’ll send it to us. Or maybe it’s an angel who put a little money in the deal and he’ll bring it to us, other investors that we’ve co-invested with might want us to be in a syndicate with them. We get a lot of deals from our existing entrepreneurs.
Aaron Levy from Box just sends a deal to my partner Josh, because he trusts him and Josh was on his board for a long time. We have a graduate program at Stanford called the Threshold Venture Fellows, and we have a dozen students that are on masters in the schools of sciences, engineering, computer science, etc. Now we have run that program and we are just about to enter our seventh year. Every year we have 12 more of those fellows out there in the world who are sending us deals. One of the deals we did this year was sent to us by one of our fellows and it’s really about casting a pretty wide net, but on the other hand, casting nets in your areas of expertise. Maybe a lot of them are done at conferences and it’s hard in the COVID era, but it’s done in very narrowcasting. You’re broadcasting, but you’re broadcasting to a very specific group of people.
Sure. Yeah. It’s called the Threshold Venture Fellows. We recruit from masters in engineering, computer science, aero, astro, mechanical engineering, management, science and engineering. You have to be an engineering student getting your master’s degree at Stanford School of Engineering. It’s a very competitive program. We usually have somewhere around 70-80 applicants for the 12 spots. And we’re just about to go through our process right now. We are recruiting and have our first information session tomorrow.
I co-teach it with professor Tina Seelig at Stanford. She’s a fantastic faculty member at Stanford, and it’s a six-month deep-dive discussion course on entrepreneurship and venture.
It’s only for master students and let me give you a resource that’s available to everyone that is tightly correlated to our class. There is a weekly lecture series that all our students participate in. I’m on the committee that helps to figure out who should come and be a speaker. It’s called the Entrepreneurial Thought Leaders series. There’s a speaker every week. Everyone from Mark Zuckerberg and Bill Gates to the wonderful entrepreneur and former corporate executive, who also is on the boards of Nordstrom and Verizon, Shelley Archambault. They both do live streaming when it’s in session, record these sessions, put them up and index by topic. It’s a tremendous resource for people and anyone can watch the live stream.
There’s a big difference between before you’re in a deal and after you’re in a deal. Once you’re in the deal, it’s your job to do everything you can to try to help make the company successful. Certainly, if we’re in a pitch meeting and we haven’t made an investment yet, we’re looking for people with what we call the growth mindset, people who look at every opportunity as an opportunity to learn. And when you see someone who shuts down every question or has a lot of arrogance, when you see teams that are fighting with each other, when they answer questions who don’t have a good team dynamic these are definitely red flags.
I have a blog on medium and I wrote a blog post there called ‘What *not* to do in a venture pitch meeting‘. I put some of the things that people have done that have been bad. You can go look at that, but certainly, we’re watching signals for the quality of the team dynamic. And if there’s a bad team dynamic in a pitch meeting that doesn’t make you feel very good about the company’s ability to manage the team.
We are a minority investor. Once an investment is made, we don’t usually have control of these companies and as a VC, I don’t want it. Boards are there to help the company to navigate and they have to make a decision. If the team is not working or if there are internal issues, sometimes one needs to change leadership. That is not something we ever choose or want to do. It’s the exception, not the rule, but those are things that sometimes you have to do. We have a fiduciary obligation as investors, board members and general partners in our funds to our limited partners to manage our investments. We have to take that very seriously, but those are the exceptions. Normally it’s a collaborative opportunity between the entrepreneur and the investor. Generally speaking, you work together to make good things happen.
Oh, sure. It happens all the time in Silicon Valley and we call that anti portfolio. Some firms, for example, Bessemer Venture Partners put out an anti-portfolio annually where there are the deals they rejected and why that went on to be. Super famous deals, but they have regret about that. FDA has put out something like that in the past. Benchmark did it a couple of times. I think we’ve talked about ours in the past. I would generally say, and one of my partners says, that you are not judged by the deals you don’t do, but by the deals you do.
I haven’t been attending a whole lot right now, but in general, I think it’s a great way to get up to meet people. I’m doing a conference next week. The Stanford Law School and the National Venture Capital Association are doing a Venture Capital Symposium on October 6th and 7th. It’s for people who serve on venture-backed boards, super interesting conference. Unfortunately, we’re doing it virtually because we can’t be there in person, but I think there’s a lot of tremendous conferences that are very interesting.
I do a lot with public company stuff and I like the JP Morgan conference for public company directors. I really enjoy the conferences of the companies I’m involved with. Planet Explorer and RMS Exceedance are some interesting conferences and many sessions are free for people to implant it. Explorer is coming up on October 13-14. It’s super interesting. One for anyone interested in geospatial data and satellite imagery. I think is a great conference.
COVID-19 is a reality that you have to deal with both at the fundamental and operational levels. We had to move all our meetings to virtual, where we are operating in a different way. We are not working any less and still doing as many deals, but we had to operate in a different way.
And at the macro level it also impacts the economy. It impacts deals. Certain deals actually get a tailwind from COBIT. There are other deals for which COVID is a disaster. Because a lot of what we do is enterprise software, our portfolio has been weathered by COVID very well. You always have to adapt your investment philosophy, operating policy and outlook on the future, based on whatever the most current information is in COVID is certainly a big one.
They did a session on Stanford ETL devoted to COVID-19 and I have a whole hour on how entrepreneurs should think about the impact of the pandemic. You can find it here.
First of all, people think that startups fail because they are too late. I find it way more often that they are just too early. You know that the idea that the market is ready for something or there’ll be market acceptance or the technology is sufficiently progressed, technology platforms so that something can happen. I think that’s problem number one. The second problem is entrepreneurs, at least in Silicon Valley. They over-index on the beauty of their technology and they under-index on other things like marketing, customer support and even HR and finance. They think all those are like after when there were companies that have been tremendously successful in the past where the technology was not that differentiated, but their go-to-market, marketing strategy, or business model was different. It isn’t all about the technology. It’s about the whole solution and how that brings together. Those are a couple of weakness things that are common to many startups.