 What we'll do is we're a little bit ahead of schedule, so we're going to go through the list. First of all, the question I have opening, number one, introduce yourself, what you do at your firm, and why are you at KubeCon, right? I think about the people in the early days of KubeCon. People were just excited about Kubernetes, the various open source projects. Then I look around one day, there's vendor booths, and venture capital is crawling around. So introduce yourself, what you do at your partnership, and also what you're doing here at KubeCon. Sure, I'll kick things off, guys. My name is Michael Yamnitsky, and I'm a partner at Insight Partners. We are a worldwide global venture capital fund. We invest across stages, starting at the Series A through the Series Z and pre-IPO and beyond. I focus on investments in software developer tools and cloud infrastructure, and I'm here because I've been a part of the ecosystem for years. I worked at Datadog before coming to Insight, who is a big user of Kubernetes, and I'm really seeing that the ecosystem is quite mature today, but there's so many opportunities in the future. I personally think the value of startups in this area is going to go up over the following few years. It's kind of funny why our venture capitalists here, there is way more venture capitalists at the NVIDIA GTC conference this week, but I think the three of us are firm believers that Kubernetes is a really big opportunity going forward. We're glad you're here, by the way, you're as welcome. Thank you. Hello. Nice to meet you. My introduction was stolen earlier. I was going to say, hi, I'm Megan. I'm the devil from the previous talk, but yeah, I don't need to say that anymore. Hi, I'm Megan. I'm an investor with Vertex Ventures. We are a firm based in the US investing, and our entire firm is a specialist investing in infrastructure software, and so that's what I focus on. Anything from seed to series A. The reason that I come to KubeCon, and I've been coming to the European and the US KubeCon for a long time, is similar reasons there's a lot of innovation happening, and I think as KubeCon has evolved, and as you said, Kelsey, larger organizations are much more present here, and so if you're an early stage company, a company that maybe we would be looking to invest in, and this is basically part of your marketing strategy is getting in front of the buyers that do attend these events, getting in front of them, spending time with them at the happy hours, everything that's happening, and so we both support our portfolio companies with that who are here, many of whom are here, and we're also looking for new investments. So yeah. So Megan, I'm going to stay with you real quick. You're investing in a company, you write that check, and they tell you we want to spend 50,000 for a booth at KubeCon, and maybe their product market fit. Your thoughts on that, I think earlier you just said, you see this as part of their marketing strategy, they go to market in front of the buyers. What is your advice to them to make sure that they're getting the most bang for their buck, sending all their whole team to a place like KubeCon? I mean, it depends. If you're one of our portfolio companies like LaunchDarkly or Hasura, later stage, and they want to spend 50,000 at a booth at KubeCon, I'm like, hey, maybe that fits into a strategy and let's talk about what that ROI looks like for you. If you're a company, you have to invest in at the seed stage, and you say, I want to spend 50,000 of that two million raise on a booth at KubeCon, you work up to that. And maybe that's not for the first year, maybe that's not the second year, maybe it's the third year. And so when you're coming to KubeCon for the first time as an early stage company, what you have is a captive audience of buyers. And so it's about how you use that. You're probably going to get less fitful. And so having a booth that early on is probably going to be less valuable. But coming and doing a dinner, buying out a restaurant and bringing in your key five prospects that you want to spend time with and capturing that attention or using your investor's happy hour to bring your prospects there as what a lot of our companies are doing that are earlier stage, that can make a lot more sense. But you have to test. And so coming early, testing a booth eventually and seeing how that works for you is important. Anil, introduce yourself, your partner there, where you're at. And also what are you doing at KubeCon? Sure, I'm Anil. I'm at a firm called Crane Venture Partners based in London. We do mostly infrastructure software investing at the seed stage. I'm here because I've been coming forever, basically. I started my career in software engineering and distributed systems 20 plus years ago. I've been in and around this ecosystem for a long time. All right, look, the context of this is a lot of builders are here. I mean, I'm looking at a lot of people who were just like, hey, Kelsey, let me show you my new open source project too. I want to build a company around it. They have to build the courage of going from an engineer to a business person. They put together that slide deck. They download that how to raise money template off the internet. You've seen 1,000 copies of it. How do you evaluate these companies in a way where you're giving them great feedback? What does a good deck look like? What does a good game plan look like? And I'll give you a starter here. There's projects that have 10,000 GitHub stars. And some people have these VC calculators, 10,000 GitHub stars equals 2.5 million seed round. I'm pretty sure that's not how you all think of it. That it's not how anyone up here thinks about it. So let's give people some insight into people coming from that lens into the world of venture. The main thing I will say is, are you solving a problem that other people want solved and that they will one day pay to have solved for them? I really don't care about your deck. You could write me in a long email or a memo. It's just those things have to be true. And if those things aren't true and you don't bother finding out whether they're true, if you're not willing to test that other people want this problem solved, other people who are not you find your friends and just in your head talking to each other. And if you're not willing to test that those other people would actually pay to have this problem solved, you're not actually, you don't actually want to be a founder of a startup and make a business. What you want is someone to finance your project, which is fine. There are people who finance projects. That's just not the business that we're in. Yeah, I agree with all of that. The communication mode doesn't matter. It really just matters what you're communicating. And so working, I would also say tactically what Kelsey just shared. Actually like finding someone who's not a VC to test your ideas with. And so Kelsey, we kind of think about it like a Sherpa on your round. Having someone who understands the VCs, how they think, but also can kind of just give you unvarnished opinions I think is really helpful. So yeah, everyone's gonna be a pastor in Kelsey after this talk for sure. Sorry about that. Thank you, and I'm gonna ask you another question. So look, you have this same engineering team. I'm trying to get to the nuts in both people. I wanna make sure you all are taking notes and gathering something because there's so much knowledge on this stage. You know, I meet a lot of the first-time founders and I'm like, have you talked to any customer? Have you gone to go visit their team and try and do a bit of this price discovery? What does it look like? Does it make a material difference if that same company comes to you and say, hey, we have two paying customers. They're paying for exactly this and we need your capital so we can go and scale it to the rest of the world. What are your views on even just one customer to start with? Amazing. I mean, fundamentally, the one way you can show to real validation is that someone has put money down on the table for your product. That is kind of the only validation, the only real validation you have. And so for sure, that is a much more compelling pitch to us because then as a VC, just to show you understand how we work, what we then do is go around to all of our other network that looks similar to that customer that you've gotten money from and we say, hey, is this also a problem for you? And we frame that in the way that you've told us that it was a problem for them. And so once we get validation for our own friends, people that we know that that is indeed a problem, that's when we decide to invest. And so even if you don't have a paying customer, you can still make that story and we will basically giving it to an investor in a way that they can then take it to other people and test it. So the more of that kind of pithy framing you can give about that problem statement, the better. Michael, same question. Sure. So I think the one thing I would add, folks, is figure out if you want to build a business. I think that's the most important thing we're talking about. Okay, you've got an open source project. It's got stars, users, engagement. Think about whether you want to build a business first and think about what that entails because your open source project is going to be one component of this business. But being a founder means having a set of stakeholders, employees, making tough decisions about the company. And that is something that you as potential founders need to really do the sole searching to figure out. Maybe you give people a little insight in what it means to build a business. You become a manager. A lot of engineers have been avoiding management their whole lives. Some people left big organizations because it got way too political. So they figured we'll just go start our own company and avoid all the politics. What are the type of skills? So if an engineer needs to learn how to write code, write unit tests, what does a business owner need in terms of a set of skills that people need to be ready for when they go down this route? Ooh, I think, look, there's a ton of things. I think the first one is being able to get people behind what you're doing. You can convince people very early on to join your business even before you raise funding, kind of tying back to some of these factors that we really like. If you've gone and found a team before you raised any capital, that says to us like, hey, you are a magnet for talent. You are building something that people believe in, right? And that is absolutely important. Second thing I'll add, and then I can go to the rest of the panel because this is something we all think about a lot is just having grit, startups are hard and you need to persevere. And if you're the type of person that perseveres, you will find success. It might take a long time as a lot of businesses in the open source and the developer tooling ecosystem take, but you will figure it out if you really persevere. Or better or worse, like 75% of my life is technical founders and has been so for the better part of two decades now. And the one thing that on the whole, they tend to not want to do that you actually have to do if you're gonna be a founder is become salespeople because generally they don't like salespeople. But the whole job is a sales job. You have to sell people the future of what can be built here from a product perspective, from a business perspective. You gotta sell the VCs. You have to sell your employees. You have to sell people who you want to use the product and pay for it. You're constantly in sales mode. And oftentimes you have to sell yourself into the delusional proposition that you're gonna become a billionaire regardless of whether or not it's true, just to keep yourself motivated every day because you can wake up and get punched in the face and told no by everyone about everything all the time. And it's like you're just in this state where you're always trying to convince someone of something and it is exhausting. And some people often salespeople are wired to do it. They like it, they enjoy it. And oftentimes people who pursue technical careers, especially in engineering are not wired that way. And it's a thing you have to learn how to do. And without it, the rest of the being a founder and doing a startup thing just doesn't work. And either you figure out how to make peace with that and do it, or you struggle mightily. I think that's a great point and kind of took the words out of my mouth. I would say the first comes the decision. Do I want to be selling or do I want to be working on a product and working on technology? And that's the foundation. But I would say one of the reasons we exist as a firm, we invest exclusively in infrastructure software, pretty much exclusively in technical founders building very technical products for technical users. And the way that we run our firm is exactly in helping founders unlock that piece of go-to-market, unlock how to sell, learning how to sell. Because if you can build very complex technical products, learning how to sell and learning how to do the mechanics of selling software to developers, to large companies is very doable. It's very learnable. There are different approaches for every different team and that's what we help companies work on. But it's making that decision that you want to learn to sell is the key thing. So we're gonna stick with that. I remember during the, in the United States, the zero interest rate phenomenon, there were so many people with money running around looking to put it somewhere for the best return that they can get. My guess is venture had been growing a lot also during that time fueled by this injection of money heroin into the veins of capital allocators. And then I remember there was a point where some founders I was advising were like, hey, they were rejecting offers because they wanted more than money. And I would go talk to some of the VC firms and they started to build out their offering. They went from finding people to allocate checks to having more services. If you invest with us and we become your partner, we know how to fill in this gap that I think you've been hinting at. We know how to help you understand your go to market strategy, build out that executive leadership team at the right time. Maybe we'll go down the list starting with you, Megan. What are those things that you kind of bring as a full service venture capital outside of cutting those checks? It's a great question. And I think full service has a lot of negative connotations and I think that's been a, has become a challenge for a lot of firms and I won't name names that launched into hey, we'll kind of build everything for you. Come to us and we've got a 50 person platform team and we'll do hiring, we'll do this, we'll do that. And I think it's really hard firstly as a founder to know when to pull those resources. Like that's kind of the key unlock is like when do we need those things? And ideally you have a very supportive partner that can help you leverage those things and I think that's where it works. The approach that we took is really, we don't promise everything. We're not gonna build your product for you. We're not gonna sell your product for you. All we're gonna do, the one thing we're gonna do and what we believe is the key unlock is helping you learn how to sell. Because as Anil said earlier, it's the most important thing you can do as a founder, especially as a technical founder when you haven't done those things before. Figuring out when to hire the right salespeople, who are the right salespeople to hire. Building out that understanding of talent and so it's important to us that we don't try and oversell we're gonna build everything because that just ends in disappointment. We just do this one thing and we do that one thing very well. So we are one of the firms that have a very large platform team. We have over 100 people that are focused across functions to help you with sales, help you with marketing functions, pricing, cost optimization of your cloud compute. But, and the way that we think about this is building companies is a team sport, right? So we as a venture capital fund, we wanna support all of the people at the company. So one thing I like to say is like, look for myself as a board partner, I work primarily with founders, but then if you work with a firm like Insight, your VP marketing, your CTO, all of the people on your executive team also have board partners. The thing that we do as well because I think there is some points here that, okay, you can't do everything and sort of like things are useful for certain types of businesses, other types of services are less useful is we tend to tailor for you. So when you're at the very early stage, we help you with pricing, help you with cost optimization for cloud compute, simple things and then as you build out the business, we tend to layer onto the cake with things like sales, marketing support. So we kind of like think about sort of growing that function for you as you scale your business. We're about halfway through. So I'm gonna take a few questions from the audience after Anil asks this question. But as you asked me this question, Anil, what were VCs doing before this, right? Cause a lot of times when I see these things get set up, it's a response to something, right? Either your customer base, the founders, the people that you're servicing are asking for this. Is this something that makes you different and stand out from other VCs? So what were people doing or VCs doing before this? And what is it a response to and is it working? I've been around long enough that I can actually answer this. So like Vertex and Insight, Crane will get you bootstrapped with sales and marketing and hiring. Like a lot of VCs say this, many of us do it. Some of us are very good at it, some of us aren't. It doesn't actually matter that much cause at the end of the day it is your job as a founder to become proficient at these things because if you don't become proficient at them then how will you know that the person you hire to do it after you become proficient at it is any good at it? On what basis will you figure out what a good salesperson looks like if you've never done the job? You're gonna hire the wrong people, I guarantee it. If you don't learn how to do it yourself you're gonna hire the wrong people. It's gonna burn three months, six months, nine months, 12 months of your company's time and effort and money and failed customers and all kinds of things. And you're gonna do that in every function until you learn how to do it yourself. And it is, for some reason it is some kind of fundamental failure mode that every founder has to go through in order to learn to not do that anymore. And I've seen this at this point well over a hundred times. This is just what happens. And I can't prevent you from doing it. But the best case scenario is that eventually you decide, hey, if I can sell that I know what a good salesperson looks like. If I can do some baseline marketing I know when I'm being bullshit or not by a marketing person who claims to be able to do the job they can't actually do. That's how I enter that question. Now as to how we got here with these, with platform teams in this world, part of that VC was just money and if you invested long enough, over enough years you saw that all the founding teams tended to go through the same set of problems more or less at the same rate in a given space like an infrastructure software. All founding teams, if they're first timers tend to experience the same set of problems at the same exact time relative to when they started. And you look at this and you're like, here's something where I can sort of have a product or a service or an offering that can address this repeating pattern that I see over and over again across so many founders and startups. And if you look at those, it's a marketing problem, a positioning problem, a first set of selling problem, a how to hire, a salesperson problem, a how to build a team problem, a how to go to international problem, how to go from pilots and proof of concepts to paying customers problems, these problems repeat over and over again. And so VCs who had the money to build the teams abstracted this out and said, okay, let's systematize this and start applying a blueprint and customizing it as much as possible. As Michael said, some firms like Insight do a lot of customization, others don't and just hand you a thing and say, do this. And that's how we got here. And I think it works to varying degrees. I think there's no set pattern here about what does or doesn't work for any given specific team. I like that, it sounds like you're fulfilling that partner component, right? Just writing a check feels more like a bank loan where helping me build a whole business and the entire life cycle feels more like a partner. Halfway through any questions so far. There's one back here. I'm gonna run there really quickly to answer this one. Piggybacking off of the question about founders who have customers. If you've got a business, you've got a few customers, you haven't had a lot of success working with venture angels. What would you suggest as maybe going back to that well and seeing if there's anything there? You can always go back. There's no reason you cannot go back to an investor. The investor doesn't care that the last time you spoke with them that things weren't working or that it was before you had users or before your customers. If you come back and you have users or customers or whatever now, you have some thing that tells the investor that there is a problem, that other people want solved and that they might pay money for it, then you have a business. And so you should always come back if anything changes like that. Also, I would say just being very clear with that investor about the learnings. I think for any investor, we'll meet lots of founders many times and maybe that initial interaction won't be the time to invest, but what every investor is looking for is that learning curve. Exactly how Anil phrased earlier, are you learning how to sell? Are you learning what customer problems are? And that can be really compelling, especially if that growth curve is really fast. That's often what seed investors are investing in is this an individual that can learn really quickly from customers, regardless of if those customers are paying or not. I think one thing to add is, do not oversell. Like we thrive in things not working. This is our job, we deal with, even companies that are on the outside really successful have so much chaos on the inside. This is what we do day to day, show us what's going on with your business. I'm gonna pivot us to making the decision. And I think there's a high percentage of companies that you know are not going to make it. And no matter how much due diligence you do, there's just market dynamics. I think there's enough data in the VC world to understand what that's going to be. And there's always this advice about trying to find that company's gonna return the fund, which kind of justifies the risk appetite for all of this. With all of that in mind, as you're seeing these ideas presented to you, how are you making that decision, knowing, and I'm assuming I'm correcting the assumption that these need to be big bets. And so maybe you all go down the line and talk through your decision-making framework and maybe give us a little bit of inside baseball wear. I know some partnerships where each partner can kind of control a little bit of the fund, but sometimes you do need to go back and convince the other partners that this is a good investment. So maybe we go through that. How do you make that decision? And then how do you all get the other partners on board for this capital allocation? I'll start. So Crane Invest basically at pre-seed and seed. So oftentimes when we invest, there is a prototype. So there's some code and a couple of people. And sometimes at the late end of our investment, there'll be not paying customers, there'll be beta customers or users or design partners, and maybe you're up to five or six people and you've raised a million or so already, but you're not necessarily a GAA, you don't have a ton of paying customers. So for us at that stage, we actually don't have a lot of evidence about traction yet. So we have to use other things. So as Megan mentioned, we spend a lot of time validating that the problem that you're solving is a real problem out there in the world and we'll go and do that independently. But we'll also ask you to point us at people who can do that for us. So we spend a lot of time figuring that out and then we spend a time figuring out, hey, how many people is that? Roughly speaking, right? Am I thinking there are a thousand people on Earth who will pay a hundred bucks a month for that? That is not a hundred million dollar business. Or am I talking there are 10,000 people in the world who would pay $50,000 a month for that. Now we're talking about a hundred million dollar business. So this is the order of math we try to do. So it's not exact, but if we get close enough where we feel comfort in the size of the market and that the problem is sufficiently important that someone would pay to solve it, which honestly is not that hard to figure out. It's like maybe a couple of weeks worth of work. Then it's all about you. It's all about the founders. Do they really want to do this? Do they really want to build a big business? Do they really want to learn all this crap that you have to learn in order to do that? Do they really want to be here doing this five years from now? Cause it's usually minimum five years from now, if not seven, eight, nine, 10 years. Are they going to last that long? Do they want to stay on their ship that long? Do they want to build something big and meaningful that changes the specific world that they're operating in, right? And our, is there ambition? Huge, is there ambition? We're going to totally change how people do this thing, whatever this thing is. If all those things hold, that's the basis on which we invest. To answer the inside baseball question, Crane specifically operates on a more or less consensus model. In other words, almost anyone can kill a deal. So you have to spend a lot of time convincing everyone that something is a good idea. But honestly, like the, if it's not a hell yes, it's a no mantra actually kind of works pretty well in this environment. Cause if everyone starts jumping out of their seat on day one, when they're thinking about something, that's usually a good sign. And you want like one person to feel kind of uncomfortable and oppose it a little bit because that means there's a little friction and you're doing something interesting. What you, if you, if you bring forward a deal and half the people are like, yeah, that's great. And half the people are like, no, that's not great. It's, that's, that's a no, that's a clear no. And that's more or less how we function, but every firm is different. I have two layers of inside baseball. And the first is that I, early in my venture career was with Crane Venture Partners. So joined when they closed the first fund and was with them for three years. And so a lot of the ways that I think about seat investing are very similar to what Anil just said. So I would add one thing to that framework around seat investing and that is referencing. And that is both on the problem with our, across the team, deep network of technical buyers and that CISOs, CTOs, VP engineering at large organizations and small ones. That is all we spend our time doing is, is referencing. And we'll usually have around six to 10 calls for any problem that we're exploring. And the other thing is founder referencing. And so from even the first interaction, if we have any connections in common or we know people from companies that founders have worked at before, we're usually doing that referencing very early on and we'll speak to as many people as possible that can give us a read on that individual. And then we also do formal references. So when we're almost about to invest in a company, we'll ask every founder for two, three, sometimes even four references. And that's how we make our decisions on teams. It's very informed by the things that you've done before and the people that you've worked with to build that picture as well as our short experience working with you on a round. Maybe just the second piece of Inside Baseball on how Vertex works. We're six people. We are all specialists in infrastructure. My partner Jonathan built the infrastructure team at Facebook. My other partner Insik built a company called Loud Cloud, which became Opsware, which is the company he built with Andreessen Horowitz and there's a whole book about that story. And so across all of us, we're very deep on infrastructure software businesses, but we make decisions independently. And so usually we will, everyone will inform each other and have good questions, but we can also make our own investments. I'll make usually one or two investments each a year. So we have a very, very narrow, we have a very, very narrow model and we work deeply with the companies that we invest in. So it's a very high bar when we do make an investment because we work with so few. If I were to quickly recap, this whole part about not only getting market fit, but actually working with customers because you're gonna go try to find out from the very same customers they will be selling to, how would you use this in production? Is this something you would pay for? Or is this a real problem you even have? And if so, what are you currently doing given that this product that we are thinking about investing in doesn't exist? I think I see a lot of founders that don't understand the current way that customers do things. If you plan to go and disrupt because it's a whole onboarding phase, there's a whole integration phase because most companies can't stop what they're doing and switch over. So if you're taking notes and paying attention, there's so much value in you doing this early because they're gonna do it anyway. So you might as well get the dry run in place to make sure that you can arm them with this information. And I would guess, Megan, if someone in their deck gave you these bullet points about how customers are going to use their stuff, what you're gonna replace and you go do that due diligence and it starts pattern matching, my guess there's bonus points for having that. 100%. If you can make it easy for me to ask those questions, it's a much better process. The other benefit of that, if you're framing the problem in the right way and I ask those questions in the right way to your target customers, ideally those then become your customers. That's kind of the perfect outcome is that when I speak to engineering leaders that like large booking companies or flight companies or big banks, for example, or even smaller companies like in our portfolio, like Launch Darkly or Docker, and I speak to those engineering leaders, they go, wow, yeah, that is a problem for me. I'm like, great, here we go, I speak to this founder, they'd love to tell you more about their product. And so that company then becomes a potential customer and we get really great feedback about how you're solving that problem in the right way. So it's a real win-win on that side. And so the better that you can frame that problem in a way that I can ask it and sometimes I'll frame it slightly differently if I can understand the product and how it might work for that company, it's much better. Michael, same question, how you making decisions? I think, okay, there we go. So we do work on consensus. I would say what we do, so just going back to your point of like, can we get something inside baseball, is we do the work to sort of get the partnership on board for you. So rather than you coming to present to our entire partnership and get questions from a bunch of folks, you work directly with the team that you're speaking with at Insight and then we go do that work for you. All right, so we talked about the, the title of the session was the good, the bad and the ugly. So we're gonna start pivoting towards some of the things that are less happy path, if you will. Number one, what happens when a deal gets away? Like your team is excited, you see the presentation, we gotta do this now, call them now. And the founder is like, hey, we don't wanna work with you. We don't want your money. What does that look like when you go back to the team, it's like, how did we do? When do we wire the check? And they're like, yeah, about that. What is it like on the other end when the company doesn't wanna partner with you, the deal that got away? Heartbreaking. But it happens, of course it happens and especially in the US and much more condensed markets, there are a lot of investors specialized in infrastructure and so this happens a lot. I think with every, whenever we lose a deal, we have a very rigorous approach of diagnosing where did things go wrong? Where did the relationship break down? What were we not offering that they got from another firm? How did we communicate that? And sometimes it's a better offer. Sometimes firms will offer to pay more and that's an amount we wouldn't be willing to pay, for example, but if it's anything other, if there's a fault in the process, that's what we look to diagnose and try and fix. I love that answer because it humanizes, that's how the equation, because I think a lot of people look at VCs as pure money factories, like a faceless bank and not understanding that a lot of VCs view these founders as customers. We wanna invest in the right customer, just like different businesses will make sure that they're selling to the right customer and I think that gets lost a lot because it's like people feeling they're doing the most uncomfortable thing they've ever done in their lives. People have a hard enough time applying for a job and submitting their resume, let alone pitching their business, their company and their idea. So to hear you refer to them as customers, very humanating, we should clap for that because most VCs fear that level of transparency. Like seriously, you should clap for that. I make them clap. We will, I mean, there are over 5,000 seed funds on earth that don't necessarily invest in our space, but they've got money and they invest in startups at an early stage of the ones that compete directly with the same kinds of things that Crane invest in, that I invest in, we know almost all of them, but that's still over a hundred. So like at any given point in time, we're gonna be competing with five to 10 firms for every startup. So like of course we'll lose, it happens, but we treated the same way you would treat like your site going down for a day, right? We'll do a post mortem, we'll debrief, we'll diagnose it, we'll figure out how we could have done better and we'll improve the process so it happens less often next time. And to us, we also don't do that many deals a year, honestly, at least not anymore, and every deal matters because every deal, as Kelsey mentioned, is something that we hope will return the fund, which is to say be such a huge success that everything that is in the success is accounted for. And so like we care about every deal and usually if we wanna do a deal, that means at that point we really like the team and we more or less become friends. And often what happens is even if we don't do the deal, we stay in touch and we try to help them as much as possible for the rest of time. And so you just stack up all these people that you really like and you really wanna work with and you'd love to work with them and sometimes you can't and that's life. I'm gonna ask you to explain, return the fund because a lot of times you will hear some feedback that founders get is, and it's like the most derogatory thing you can tell a founder, that's a lifestyle business. And some founders actually only want a lifestyle business. There is a dream where I can take three people and we all earn a million dollars a year every year for the rest of our lives. A lot of people will be like, that's a wonderful deal, sign me up. But maybe to a VC, that would be like, yo, that's a lifestyle business. That will support your lifestyle and it won't return the fund. There is nothing wrong with a lifestyle business, especially if you can clear a million ahead. That's a great business you make, way more money than me and you will forever. Lifestyle businesses can be very good things. My business is to best case scenario, take a dollar and turn it into $100 or $1,000. So every dollar I spend anywhere, if I don't believe that that's possible, then I'm not gonna do it. So I've literally never said to a founder that that's a lifestyle business. I have said to founders, hey, we don't believe that there's a potential here for a large enough outcome by which I mean, I don't think you can take my dollar and turn it into $100 or $1,000, which is what I need for the way I do business to work. So when we see, say, return the fund, there is some thing, there's some X times and that X times rule of thumb is 100 or more. I assume this has a lot to do with that. All the people you invest in necessarily won't work. They're high bets, they're high risk. So you need to be making big bets consistently. Got it. And just a quick comment on that. I think Tim, who spoke before us, put this wonderfully in that you kind of have to be a little, not unhinged, but you have to be so focused on what you wanna build to build a billion dollar business, to build a company that is worth a billion dollars. You will have offers, especially if you're building something in infrastructure, you will have offers along the way to sell that business for 10 million, for 20 million, for 50 million, for 100. You'll have offers all along the way to sell that business and to keep that business and to keep building it to where you turn $1 into $100, it takes almost a maniacal focus to do that. And so that's kind of also what we're trying to understand from founders. Do they have that and why do they wanna do that? Because it's not really socially understandable for many people. Michael, have you wanna add something there or I can pivot to the next component? I say we pivot. Okay, the ugly, the ugly. I think the ugly part of this whole thing is that a lot of these founders will pour their lives into these companies. I mean, they sacrifice a lot, their families. I've seen founders get remorse. They leave big company making lots of cash, good equity to go out on their own and they end up earning a fraction of what they would have made if they stayed. And that feels bad. And then on the other side of that, if they're a seed round, if you're all investing early and they come to you and say, hey, we're ready for that A and you say, we can't put any more money into this thing. We need to start talking about an exit. It's like hospice care. We need to figure out how to spin this down. That is a ugly truth that a lot of founders will be faced with. Maybe tell us a little bit about how we get to that point and how do you have that honest conversation that, hey, we tried, we did everything we could have, but we don't see a reason to continue to put capital into this thing. Let's go with that. Sure, I think, look, I mean, there are different firms with different strategies, but I think generally you expect seed investors, series eight investors to participate pro rata, which is, you know, the investors right to a certain allocation in a fall-on round. That is a signal to the market, right? So when you've got a company going to raise externally from other new investors, those new investors want to see the existing investors participating. That is a signal. And that's a big signal for folks like us who come in at the series eight and beyond, we say, hey, do seed investors like Vertex and Crane, are they in this journey with us? Also, when they go to raise with the external partner, that's gonna be the first question that comes up is why is your current fund not putting money in? Is that typically a hard no at that point for you? I mean, look, it's a sliding scale. There could be a particular reason why this firm is not putting in, but look, I think if you look at things in practice, and I think the folks on the panel would agree with me, the company's going out to raise a series A, there is a good likelihood it's gonna raise it. Good likelihood the business is good and that the seed investors want to participate. We don't really see that sort of too much, Kelsey. I'll be honest with you. Yeah, I can't think of any situations off the top of my head where we haven't agreed to do our pro rata. I'd say in the last few years, it's been more us fighting to keep our pro rata. But I think this does become more of a challenge for multi-stage funds where their strategy in most cases is to lead every round. And again, I wouldn't necessarily name names, but there are certain funds that do that. And the challenge if you're an external investor, when you see that that fund then doesn't lead the series A. Maybe they lead the seed and they don't lead the series A. Well, they don't lead the next round. That's where the signaling becomes a big challenge. I would say there is a situation though, aside from our pro rata and committing to invest where it becomes clear for a company that they're not gonna raise that next round. Because they haven't hit certain metrics that you would need to achieve by the series A for that business. And I think in all of those situations, ideally that is not a surprise for the team. You would have been helping those teams set the operating plans, understanding at every point what needs to happen to raise the next round and setting those milestones. And so if those growth numbers aren't hit or if the revenue figures aren't hit, then there's a conversation around, okay, what is the opportunity cost of continuing to run this business? That's a really hard conversation to have. And there are no good ways to have that conversation. But usually in any case, that would never be a surprise to the team. That's important. So if you thought starting the startup was a way to avoid performance reviews, you are sadly mistaken. It really is not. This conversation is hard. It is hard when a business isn't working. It's hard when it turns out people don't actually wanna pay money for the thing you've built. It's hard when the world changes under your feet. Like your business or the project or whatever is premised on it being true that there are this many customers who want this problem solved within the next X many years and that there will be no change, no externality that makes it irrelevant. Like if you build something that's predicated on Kubernetes being world dominating and tomorrow Kubernetes ceases to exist, guess what, your business also ceases to exist. So like there are times when the thing just didn't work, right? Everyone tried. You tried. It's not that VCs do that much. I don't wanna say we tried. We believed, we invested, we helped. But you tried and it didn't work and we have to call it quits. And that's just a hard conversation to have. It's not fun. There are situations where founders don't wanna believe it even though all the evidence says that the thing isn't working. There are times when all the evidence says the thing is working, it's just slow and it's ambiguous as to whether or not it will continue to work and grow or it'll stay at the level that it's at and kind of peter out. And as an investor, you have to make a judgment call on that and your confidence in your rightness is probably at best mediocre. And you have to live with that and that's just how life is. But like there's no easy way to have this discussion but you have to be able to have the discussion and at least the way we operate at Crane, we attempt to have the discussion early and often. Last question here, we all see what happens in the best situations, right? You have companies like Hashew Corp that go through all the stages and the IPO. And the question I have is like, when you have an exit event where there is no acquisition, you spin the thing down, what happens to all the technology, right? Like is there like you lock up the IP, do you house it, do you all split it over dinner? What happens with all the things that were built up into the point you shut this thing down? Every variation you can imagine happens. Sometimes you actually find someone to buy the IP even if the company doesn't succeed because they were dependent on it. And you know, you managed to get to 100 customers and two of those customers really care and they really want this thing and they don't want it to go down. So they'll buy the tech out from under you. Or no one wants it and the IP just goes under the shelf. Goes to GitHub. Yeah, and sometimes it just goes to GitHub. Like there's an infinite variety of things that can happen here that are almost exactly the same as an old car. Like someone could buy it. It could be broken up for parts. It could be totally stripped. It could be shelved. It could go to a landfill. All the things you can imagine. Awesome. We're gonna wrap their big round of applause. Michael, Megan, Anil, thank you.