Seed Investor | CTO | AI-Enabled SaaS
David Evans | Seed Investor | CTO | AI-Enabled SaaS

"You should want your advisors to say, hey here's all the different things I've seen and I've done and you pick, founder and CEO, you pick how you think you should approach it"

- David Evans

David Evans – Having a rapport with advisors


I am a serial entrepreneur and technologist who started coding at 14, launched my first business at 19, and made by first angel investment before age 30. Including my companies, my portfolio, and my clients I have been involved in multiple exits as a founder, investor, advisor and team member.

In this broad-ranging experience as an entrepreneur, investor, and consultant, I have worked in Group Travel, Telemarketing, Digital Out of Home Advertising, Light Manufacturing, Digital Marketing, Occupational Therapy, e-Commerce, Retail, Non-Profit, Ticketing, Sports & Entertainment, Public Agencies, Alternative Asset Management, Consumer Services, and Professional Services and bring domain-specific knowledge to these industries.

I am looking to engage with people that want to leverage technology to make money, save money, or improve customer experiences. As a consultant, this means middle market companies looking to add strategic value to their technology investments. As an investor and advisor, it’s usually early stage, AI-enabled SaaS companies.

Additionally, I have a passion for helping build sustainable social impact businesses that serve our communities with less reliance on philanthropic funding.

Request Intro

The full #OPNAskAnAngel talk

Jeffery: Welcome to the supporters fund ask an investor i’m your host Jeffrey Potvin let’s please welcome David Evans the managing partner of sentiro ventures as our investor for today welcome david it’s a real pleasure having you join us.

David: Well jeff thanks for having me

Jeffery: Well we’re very excited david i know we got to see each other at collision uh we’ve been chatting i guess on and off for a couple of years so excited to kind of dive in and the big reason is that you’re also a tech investor and i like tech and being the fact that i’m an ex-software engineer it’s very rare that you get to have a deep talk about well deep tech and all this great stuff so i think we’re going to have a great discussion around that but also i think what really stands out and hopefully you can share a little bit about yourself and you know go far back is uh your connecticut’s at you university days but really you have a great story you started coding at 14 years old built a couple of companies sold them so many great things in there so maybe you can share a little bit about your background where you’re at today and then one thing about you that we wouldn’t know.

David: Yeah sure so i mean i i think kind of the i always describe it as i’m a technologist entrepreneur and an investor in that order right and and some of it is because i did start coding at 14 years old on a ti-85 graphing calculator um wrote blackjack it wrote blackjack and it went viral in in my high school right and this is the day this is the days before you had the web to go viral like we had little sync cables to make it go viral um so started coding really really young without a lot of direction and natural intensity for it um you know and it that’s why i say i’m a technologist first right um started my first business at 19 while actually at johns hopkins university that’s where i started my education was at johns hopkins but like all good techies i dropped out early right after my sophomore year um i left johns hopkins to go work in tech in the in the middle of the dot com boom um and uh spent about two and a half years uh working for a consulting firm and then moved on to an dot com that that went out of business um so i had had that little bit of a ride in my first exposure essentially the startups venture capital and angel funding was through uh through that through that startup um and when they uh when they went out of business i actually launched my my second business geode software um that company is the that company still exists today it’s really just a custom software development company mostly services based but we develop products for companies as wide ranging as nasa to uh digital signage in every albertsons across the united states as part of that company i actually got involved in the secondary ticketing space so i think companies like stubhub vivid seats uh and in 2005 actually launched uh launched my own company uh in the space easy and easy seats launched in 2005 by 2010 we were 176 on being 500 we were the sixth fastest growing retailer in the country and it’s not because i was a great a great retailer or a great seller of tickets it was because we had great tech right we automated the distribution of digital tickets as early as 2008 um we had predicted pricing models we had automated pricing we had um even tools that could tell us if a concert would sell out within 48 hours of when it would actually sell out so it was really about the tech and not us um wasn’t it wasn’t an industry i was passionate in so i actually sold that business in in 2015 um and at that point made the shift to the other side of the table into uh into investing uh first as an angel investor working mostly as an angel and then got involved with the fund here in dallas rep tech ventures that was focused on on retail technology right i had been in the e-commerce space so it was a natural fit to work with david revtec and that was kind of my first opportunity to move from being an angel where it was my money to being a venture capitalist and investing other people um which there’s a there’s a dynamic there and i’m happy to share it but there’s a there’s a different psychology when you’re you become a steward of someone else’s money versus versus your own um took that experience with revtech to launch santiaro at the start of that started pandemic um which was not the best time to start it was in january of 2020 uh but we did raise we did raise a fund uh we’re currently in active deployment we’ve got nine nine companies in the portfolio uh and expect to make a couple more before uh before we go out and and raise funds too so i think that’s that kind of covers the background i think you said the the one thing that um one thing that people may not know i realistically speaking i i always talk about this i i never uh i never intended to start any of my companies right so it wasn’t like i had this grand vision of oh hey i’m gonna go and i’m gonna go and build this um you know geode it was sold went out of business right they they flamed out in a dot-com bubble burst so i i had a choice to go work for somebody else or start my own business and i’m sort of a diagnolal entrepreneur i want to start my own business right i’d rather make nothing and and and be building something than make six figures and have to answer to somebody else um easy seat was very similar you know part of the way i got into the industry was was through a a failed partnership with one of my clients at geode software um so you know that actually got me into the into the ticketing business um and even venture capital right like it wasn’t something that um you know it was something that just because of my experience i got connected with revtech and it really kind of pulled me across the aisle into venture capital i really only had started making private investments because i like the start phase right i like the zero to one of startups um which attracted me to angel investing and now has kind of pulled me over into into venture capital.

Jeffery: Awesome and a great story and of course sharing that you started this all at 14 and then kind of worked your way through the the racket and learning and uh well i guess there was some fails uh through the companies you work for but you kind of built and learned what it took to be an entrepreneur i guess the first question i’d have is that when you look at being an entrepreneur back when you were 19 versus today what do you see the big significant differences are because like you said you’re like i could take a six-figure job or i could build it myself was it easier to build it yourself back when you were 19 and go get a six-figure job inside of your own startup that long ago uh versus today where it seems to be a lot longer grind and build to get to a six-figure salary or is that completely reversed and um i’m looking at this the wrong way how do you kind of envision.

David: That i mean i think a lot of it’s based on a lot of it’s based on deferred gratification right um so personally it’s a lot easier now right i’ve got some pelts on the wall i’ve been there i’ve done that every mistake there is to be made i usually tell founders you know i’ve made that mistake at least three times and there’s a good chance i’ll try to make it a fourth um but the difference between today and then is you know i kind of know it going in right i know that i know that well yeah we probably shouldn’t go build a bunch of tech right now we should go do a little bit more market validation or we should go to like i know better but i may still do it and that’s it that is a massive difference and that’s a massive change i think the other thing that evolves over time is i usually i usually always talk about like i didn’t really learn how to be a ceo uh until about call it 2010 or 2011 right like i was very much um i was far more tactical i was far more of a of an operator than a ceo uh in a true executive and that’s one of the big differences between between them and now um that’s on the personal side from a market side i think it’s actually a lot easier now than it was then right you know things like digital digital funnel digital acquisition funnels make life so much easier to find customers to find clients you know low code platforms make it so much easier to spin up prototypes and start to validate your idea before you ever actually get going so i think there’s a there’s it it’s easier to get started but i think there’s so much noise going from zero to one is easier than it was 25 years ago i think going from one in up has actually become more of a challenge because they’re just more cluttered to have to cut through when you do start to get to get some traction.

Jeffery: Yeah i can totally agree with that because i do think that the startup phase everybody’s built enough tools to get you moving quickly so that zero to one really is quick and then after that it’s really how do i find my market how do i get in create a segment uh find the customers and get them talking to me you mentioned one thing inside of this which is you’ll probably still make the same mistake which is go and build the tech is that because being a coder and doing this many times it isn’t really a mistake it’s more of your you want something tangible to get in front of people to move quicker so in your mind you’re actually moving quicker because you know how to code and you know how to move that dial faster than the average person would so it’s not really a risk or a problem you’re doing what it is is that you’re going to validate quicker so someone that might take six months to build a system you’re building that in two and you’re going to market so you’ve already assumed the risk and said i can do this quickly let’s get it in test it and then start to build out where you fit in the market is that a fair assessment

David: I would agree that you know when you when you talk about kind of building to building to prove the market um the it it’s all about trying to find the right balance right is is how much do you actually go and build when do you actually take the cover off and and start to engage with customers you know humans humans don’t have a don’t do very well at sort of um envisioning how things look i always you always stage your home if you’re going to sell it right because you need to give them a picture of how it’s going to work it’s the same thing with tech right you kind of need to stage your product well enough so people can understand how it fits so i think the the mistake is building a full product right the the mistake is actually getting to the point of where you go and you spend you know very early on i spent 18 months building our very first product with geosoftware at 18 months our very first sales call i knew we had a problem right because it was just a wrong market timing we could go into that later but ultimately um you know 18 months of effort went down the drain that could have been addressed with that very first sales bill right having that very first call with a with a potential customer would have saved me 18 months worth of actual engineering time so it’s finding that balance right

Jeffery: So i guess in taking that what you just shared is it kind of more of you know everybody always says build to this mvp which completely means you know something small and get it to market and then there’s a lot of others that will say you know go out and learn from the customer learn where you want to be and then build the product and build it with them so it ties them in so in the sales process what you’re trying to do is enable the people that you’re working with to help them feel empowered by sharing that you’re building something that’s solving something that they know well they spent 30 years in the space and you’re using working with them to build this versus coming in new building something for 18 months and then dropping on their lap and saying this is going to solve all your problems i know you’ve been in this space for 30 years we know better so here you go is it kind of that work up and work into the space versus trying to be the solution this every time and thinking why doesn’t this work.

David: Absolutely and and i think there’s there’s two distinctions there right one is and at centiero we like to look at founders that have experience in their industry right it may not be a lot but it may be one or two years or maybe even 10 years or 20 years of experience in the industry to where you do have some of that understanding from the inside right at that point and i think this goes back to your question to me earlier is that you know i when i go and i build that product i’m going and building it because it’s a space that i have some knowledge about right so if you have that knowledge you you probably want to start down that mvp road and start to understand um you know use the mvp as your basis for understanding your market if you don’t have that then you absolutely start with customer interviews right you need to not only understand the problem but you also need to understand the incentive structures you need to understand who’s your user who’s your buyer you know it’s the the the common thing is you know oh hey um this this industry is still run on paper okay it’s 2022. we’ve had 40 years of desktop computing we’ve had you know 20 years of sas there’s probably some other reasons not related to technology that is causing that to happen in that industry and you need to go as somebody that doesn’t understand the industry you need to go and find out why why are you still using it why are you still using using paper and pencil because the answer isn’t going to be nobody’s built software right the answer is going to be far more about the incentive structures the you know friction of deploying software all the other things around it not just the the actual software itself.

Jeffery: So it sounds like when you’re working with companies and what you’ve gained through your your own experiences that you’ve created and you said you’ve made lots of mistakes along the way so you’ve kind of almost created a template of where you’re seeing a faster way to get from a to b versus here’s the standard what everybody does they go in 95 percent of founders are builders they just want to build build build and they forget to sell so then when they go out to sell they wonder why they don’t make it and it’s because they haven’t actually learned what the market is and they built something they built the lamborghini when they should have been building uh the fiat or something so there’s there’s a really disconnect between what that entrepreneur knows and what they’re trying to achieve and does that go and you mentioned experience but does that go back down to well then you should only invest in entrepreneurs that have two to three years two to three year companies that have done it a couple of times versus someone who’s just built their first one because they’re going to go through all the mistakes that you really don’t want to go through and it’s going to be a long cycle so just focus on founders that have done it before

David: Well i mean i think that’s part of our job is that’s part of our job as investors right is you know and as operator investors so myself and my two partners um we’ve all been entrepreneurs for 20 plus years we’ve all scaled companies we’ve all had exits and that’s part of our job right and that’s the relationship we want to develop with our founders is you know we can’t do the work for our founders it’s just it’s not how not how things work but we can’t help you learn from our mistakes we can help you learn from our experience and this is what’s kind of interesting about sort of even the venture side is not only our experience from you know 15 years ago running easy seed or starting easy seed but also from working with our other portfolio founders right of hey you know these other three founders we are having a very similar problem and this is the way that we’ve been able to solve it successfully the successful so i don’t think it precludes the first time founder because i think there’s there’s other pieces that as a as a repeat founder you you start to get you you may get a little bit jaded or you may start to get you may start to fall prey to this worked in you know this worked in my last company therefore it will work in this company um which isn’t always the case right there there’s a lot of decisions that you make as a ceo they’re very predicated on the current team you have the time in the market the market you’re going after like there there’s a what worked for you then may not work what worked for you then may not work for you today just because of different sort of um different extraneous factors.

Jeffery: So the experience is obviously key but it’s breaking through the experience and not holding yourself to the bad things that you learn but just using those learnings to kind of shape the next thing going forward so being open-minded i guess across the entire time that you’re doing this and not looking at your past mistakes and trying to run away and avoid them but more trying to accept them and figure out how can i build on this and be stronger or better for the next company.

David: Absolutely and i i usually refer to that as i call that synthesis right of where you’re going to take as a founder if you’re taking my advice i don’t ever want you to if i say i think you should do x i don’t ever want you to go and just immediately ux right like that’s that’s not really the intention the idea really is for you to synthesize your own experience my experience advice you know input from advisors input from other investors and synthesize that to the current moment that you exist in in your company in in kind of the overall market cycle that’s that’s what any founder needs to do that’s what i need to do as an investor i need to synthesize all the different information that i consume even when it comes to you know pattern matching is you know i i’ve been in the ticketing space i’m not a fan of i’m not a fan necessarily of companies that are in that market for a lot of reasons but i constantly have to sort of challenge my assumptions because there there will be change there will be evolution you know if you ask people 25 years ago whether or not consumers would use digital ticketing they would have told you absolutely not right and now ticketing is 100 digital so you always have to understand the unique timing in the moment so even if you are an experienced founder you need to be taking all of these signals and interpreting how they apply if they apply and what you do with that information in in your company.

Jeffery: So is there a timeline that you look at or working with your founders that you’re always iterating on this strategy in this plan so if you have a company you’ve made an investment in and they’re going forward and they’ve got this five-year vision you know you look at companies um like toyota most japanese manufacturing companies they’ve got 20-year models so they already know where they’re going to be in 20 years they’re shaping the market to get them there so you know maybe that doesn’t work so well in a startup space but if you look at the startup are you asking them to always be looking at that plan reiterate if you have to every month but make sure your whole team is aligned to that plan even if you have to make small pivots inside of that plan are you always trying to iterate on that.

David: Yeah we always look at it from the perspective of we want to see we want to see sort of an annual plan revisited quarterly and that’s what i did when i when i was a ceo um and even it dovetails into the bigger vision right so i usually the way i’ll describe it is usually the next six months next six to nine months that’s usually high certainty right almost 100 probability next six nine months you know what’s going to happen the 12 to 24 month period out beyond this it’s a 50 50 right you have enough information now to understand what should likely happen over the course of the next 12 to 24 months beyond 24 months is useful from understanding your potential direction but realistically speaking that’s going to change a lot right a lot of things can change over the course of a 24 month period so you know but you don’t want to you don’t want to lose the that big vision of where you’re going to go next because really you need to be happy you need to have what you’re doing in that near term period the midterm period and that long term they all tie together to actually grow and scale especially if you’re trying to build a venture capable.

Jeffery: so does this now fall onto what you talked about which was learning what it takes to be a ceo versus an operator.

David: It absolutely does you know the you as an operator you’re really only looking at that you’re looking at that near near-term window um you failed to see you know as you as you look out to those further time periods right when you look out to those three-year time periods that’s where you start hiring people that are better at that job than you right like that’s when you look at it and go well if we’re going to get to that future point i need to hire somebody yeah i can go log on to adwords and create ppc campaigns but that’s not a it’s not efficient using my time but b i’m never going to be as good at that as somebody that specializes and oh by the way adwords isn’t the only component of our strat of our sort of marketing strategy that’s going to lead to getting us to where we’re going to be so you really start having a look at the big picture rather than micro and as an operator you are just going to focus on that micro you’re going to focus on that next six months.

Jeffery: While getting enough data in from that micro site to be able to make those decisions so taking your experience that you’ve had through the companies that you’ve built do you find that you could have been knowing what you know today you’ve been more effective learning better how to operate as a ceo versus just operating as a startup founder is there a significant difference there that you can share to the audience you know focus on these three things they’ll help you better understand your market your business and how you drive your business forward because there’s going to be another stage that you know when you get to series a where you’re going to have to try to tear that apart and start looking at a different way of looking at a macro of your business can you share some of those details.

David: I mean i i think the so it the lens is always sort of the same and it goes back to something that you said a little bit earlier is um focus on selling it focus on the market and that’s really what’s going to drive your success your success as a business and also your success in venture capital you know you you don’t run into too many cases of where a company is generating too much money to talk to vcs right if you’re generating that that’s never an objection to an investment of oh you’re generating too much sales i can’t invest in you if it may mean your valuation’s too high but at the end of the day like sort of sales and understanding where the market is going to go um is one of those incredibly important pivot points to to to deal with especially early on um and it’s very very difficult for especially a technical founder to let go of their baby um to basically say you know my vision is x but the market wants y i’m gonna deliver y and as a technical founder and as a product oriented founder you really really like x like that’s your idea that’s your baby and if the market but the market is saying well i don’t really want that like that’s not what i want you have to be able to let go of that and quickly shift to that and i’ve worked with founders as an advisor and investor over the years that have walked into walked into meetings with large customers um global brands and said well no no i hear how you’re doing it but you’re doing it wrong you need to do it our way to use our product right that’s not that that’s not how you how you operate so really that that focus on sell it first give the market what it wants um you know not it’s not to be said that you can’t create markets but you have a much higher probability of.

Jeffery: And then you’re going to success of keep iterating and i seen that you also spend a lot of time advising coaching inside of businesses so it sounds like you’re kind of taking this 30 years of learning of wins fails etc and learning again how to be a ceo is that kind of your mandate is trying to push that back into the ecosystem so that founders can better strap themselves with valuable not just metrics but valuable insights on how to actually run a company because i think from what i’m hearing and what i’ve learned as well along the way is that a lot of founders early on are running and gunning and maybe they haven’t matured enough in understanding how to get out of an operational role and get into the big macro view of where this company has to go and it could be financial could be many reasons but it sounds like a founder right from the get-go should be looking to speak with or on a regular basis at least interact with somebody that has that advisory coaching experience that can help guide them out of that operational Role.

David: Oh absolutely and if you can find a if you can find a mentor that can help you think big picture right and that’s one of the that’s one of the big differences that you you can sort of point out between an operator and a ceo is that that level of strategic thinking i know it sounds cliche but it’s really having that big picture view and understanding that the big sticker vantage point understanding where you’re going to go understanding that you know as i delegate this as i delegate this particular task yes it’s going to take me time to delegate it but it’s also going to free me up time for things that only i can do as the ceo or founder of this company but it absolutely advisory boards if they’re run well and there’s two things that i i would i would suggest to any founder looking to find advisors is one make sure you have a rapport um personally with the individual that you know you you it’s not just oh my god jeff is really really smart he’s worked with a lot of startups works a lot of investors i need to have him be an advisor but the two of you don’t have any kind of common ground you don’t relate to one another conversations are strained like that’s that’s no good in an advisory relationship the second is you need to have advisors that don’t insist on being the smartest people in the world you need to have advisors that understand that concept that i was talking about before that their expectation of you isn’t adherence it’s that synthesis right so that somebody that somebody that yeah i’ve been there and done that uh whether it’s building product whether it’s marketing whether it’s sales i’ve done it but it’s also been a while and it’s also been in a different company in a different market with different customers with a different team you know i don’t expect you to necessarily do it exactly the way i i do it and that’s what you should want from your advisors to say hey here’s all the different things i’ve seen and i’ve done right and you pick founder and ceo you pick how you think you should approach it you know which of those tactics you know which of those tactics which of those approaches how do you apply it to your own business and a lot of times that’s incredibly frustrating for advisors because they’re used to being the smartest person at sales like they built a massive sales organization so you know it it’s not easy to say well hey get what you did at oracle two years ago that doesn’t work for a five person startup like how do we scale that down um you know those are sort of the two pieces right you have to have that rapport and they have to have they have to be geared to mentor not sort of rule i guess.

Jeffery: No that’s super valuable and i think rapport obviously allows for the two to share information and then ensuring that the ceo is still the ceo your goal is to coach them into these next layers so if you’re in there trying to overpower and dictate how something’s being done then that’s not really assisting them in growth and allowing them to start understanding big picture so that mentorship really has to work like a mentor and and supporting them and propping them forward with ideas or introductions to other people that can help them grow as well along their journey um i think a lot of the time it’s it’s like a teacher i guess you know your teacher is to help your students get to the next grade it’s not to figure out how to keep everybody in the same grade then nothing’s going to move forward and i guess sometimes it gets tough because what you did 20 years ago you may feel that experience is really warranted today even though they didn’t have tick tock back then it’s the same thing as using skype and you’re like no they really aren’t the same so the markets are changing and they are different and you have to adapt to those times so i think it’s really valuable that you’re you’re coaching but you’re not coaching from a top you’re coaching from an equal and helping propping them up and giving them the value so now taking what you said earlier and in sharing that there is a big difference between on your role angel versus vc um how did you see that change happening when you went from being an operator being a ceo of a company switching into now supporting through an angel network and being able to support founders how did you find that transition went and then you kind of took the whole leap right into vc and i think there is always a misunderstanding what vc actually means versus what an angel is and maybe you can share a little bit about those differences too.

David: And so i mean it went poorly um because i didn’t personally understand that second piece right that it really is about you know i’m gonna give you context and it’s up to you to make decisions as a ceo right um which is hard i mean you you come from 20 years of being in the driver’s seat it’s hard to now kind of move to the passenger seat and simply be the simply try to be the gps to where they may take the route you give them but they may also go a different route um so that that went relatively poorly i think one of the things one of the bigger differences between vc and uh between vc and uh angel is really the size of the seat that we have at the table um one of the things that one of the one of the things i didn’t realize becoming an angel is how transactional it is um as much as a lot of the conversation in the ether is hey you become an angel in that you’ll become an angel investor you know you’ll get to work with your portfolio companies um you have to work with your portfolio companies you know you get to advise them you’ll work together you know all that kind of stuff really doesn’t happen because there’s so much work involved in fundraising for a company especially from angels there is no time to develop a relationship right they take my check and move on to the next investor they take their check they move on the next investor and that’s not a criticism of the founders that’s just kind of the nature of the way the process works in angel investing um and oh by the way i have other things that are my day job i have other responsibilities rules as i make this shift to as you make the shift to being an actual vc one we’re writing much bigger check so hopefully you’re not talking to 800 vcs like you would with angel investors but two is part of my job and part of why part of why i was basically hired for lack of a better term from by my investors is to provide stewardship and guidance to our portfolio and that means that’s my day job like if it that is what i’m supposed to be there to do so there’s a vastly different structure of how i interact with my portfolio companies because a it’s part of sort of the mandate of our investment is that we are gonna well we will meet on a monthly basis but b is my full-time job all day every day is to is to find new companies and support our existing company so it’s my job you know it’s my job to if you need to contact a company here in dallas it’s part of my job to see if i can do everything i can through my network my partner’s networks our investors however i possibly can to find that contact at that company to help you and that’s that’s a vast difference between an angel investor that’s doing this sort of as a as a hobby like it’s not your job like it’s not your job to yeah if i’ve got a contact that i can make an introduction to i’ll make an introduction but the level of commitment is gonna be very very different if it’s sort of a hobby or it’s something you do in your spare time than it is a vocation.

Jeffery: And then you found that when you made that transition from founder to angel investor to now into the the venture capital side of things now you’re almost stepping up a completely new level so you went from operator ceo to angel tactical hands-on helping when you didn’t think you needed to help and you’re jumping in a lot to now the next layer which is on the venture capital side now you’re paying attention to other people’s money making that investment and still having to do some of that operational side but pulling yourself away enough where it’s more tactical and it’s more bigger vision which is hey i can get you in front of this group or i can move you into this area and help you facilitate that next move is that kind of the stages that you’ve gone through and you really keep getting more of an umbrella view of this entire ecosystem as each stage you move on from

David: you you really do have to keep sort of zooming out and it’s it’s no different than your progression as an entrepreneur is that you keep zooming out like you know day one you’re writing code at day one you’re writing code year ten you don’t even know you don’t even know what the code’s written anymore right like just i think python maybe um right but that’s kind of the progression that you go through even as an investor is you know you go from this sort of intimate involvement you go from being um in a it’s a different sort of portfolio construction but understanding you go from every investment i’m going to live live or die with right because this is you know it’s my money it’s coming out of my checkbook and i’m invested in my fund so i’m partly investing my own money but um as a vc you take that much broader views that it is it is about the portfolio it is about generating those returns um for investors and i know it may sound a little callous but you know i’m not going to live and die with every investment the same way i do as an angel investor because the entire structure of dc is about that power law and it’s about that portfolio so you’re not you’re going to look at the big picture right you you need to look at how is how are all of my companies doing not just hey how is this one or how are these two doing it really is about that entire portfolio which again it’s very much it’s it helps to actually push you to that macro strategic view because you’re you’re thinking about your portfolio broadly not individual companies.

Jeffery: I love that that’s awesome and it’s it really does give you this focus that i have to work as a whole versus individually and if you don’t shift to that you’ll spend so much time in the weeds which is again the problem of being an operator versus being a ceo it becomes the same thing an angel versus a vc if you’re stuck in the weeds you’ll start to lose more companies and lose more value because you haven’t been strategic and coming in with that broader view.

David: And the beauty is you also get an economy of scale right so ultimately what happens is you know as you if you’re if you have that broad-based portfolio view you know as we develop relationships with other investors you know maybe they’re only a fintech investor well i i don’t need to try to convince you to talk to you know a deep tech investment or a a platform play right like you know i can develop that relationship with you knowing that at a certain point i’ll have i’ll have an investment that you might be interested in partnering with us on because you know we we we have a similar thesis or you know if i develop that connection with um with a fortune you know with a fortune 500 company here in dallas right if i develop that relationship that relationship on both sides can benefit from the broader portfolio not just hey hey look at this one thing from my one company it’s you know we become we become a potential partner for a lot of different ways a lot of different resources so you do get that economy and scale as you move from being an angel to a vc.

Jeffery: I love it there’s one one story that pops into my mind to an earlier point that you were making about that shift and um i remember standing in the elevator with um calvin mcdonald who’s now the ceo of lululemon or has been for the last couple years and he was my boss and we got him came out of a meeting and stepped in the elevator and he looked at me and i guess i look like deer in headlights and he said did that meeting go the way you wanted it to and uh i kind of had that not really because in my head i was trying to process how can i change this and his comment was now let’s figure out how to shift it so that it gets to where you need it to be and it’s interesting that that is that again that bigger scale view is that you went in you were tactful it may not have worked now let’s figure out how to make that bigger vision view work so what do you need to make that happen and i think in any any entrepreneur as they grow that scale that business and start to interest vcs a lot of the things that you’ve shared are really getting them into that bigger picture so that they can execute and start to drive out say larger investments or bigger revenues whatever that might be so i think all of what you shared is is obviously amazing and very valuable.

David: Awesome

Jeffery: The the next thing i wanted to dive into because we got to talk some tech maybe you can share a little bit about the a few of the questions i had and and i think that um you could really kind of um i guess blow these ones up but i think a lot of companies tend to be focused today on uh building ais staying at their ai and being that you like to invest in ai how many of the companies are you seeing are actually ai based companies versus matching algorithms that they feel that they are building ai but they haven’t actually got to ai at this point is there a number and are there a ways that you can get the founders to shift their mindset from instead of using the buzzwords and being more tactful in this area is there something you can share that say hey this is a way you need to go in order to get in towards being more of an ai com uh complicit business versus stating that you are and finding out later that you’re not or whatever that might look like.

David: Absolutely so generally speaking about a third of the companies that we see don’t that we pass on that we actually take a close look at don’t actually fit our definition of ai and our definition of aai is pretty broad we include machine learning we include we include some companies that have a long-term ai strategy that hey we need to go collect data we need to go collect data for the next 18 months then once we get that data then we can go do these other really cool things and i think that’s really the the crux of what we look for as ai investors right is do you understand the tech do you understand where artificial intelligence can create value in your product and that’s the that is the the the key distinction that we look for as investors and we look for from founders and and from ctos is where does it create value in your product because i really at the end of the day your customer doesn’t care that it’s am like truthfully they don’t care what they care about is that it’s 95 accurate in it it’s 95 accurate or the company that i know here in dallas is 99.9 accurate in transcribing an invoice right that the customer doesn’t care that you’re using ai to do it and what they care about is that in invoice has been transcribed properly that’s what they care about that’s what they really do so what we look for is is founders that know how to articulate the way the technology drives roi in in their product um where we tune out pretty quickly is hey here’s we’re going to bolt on chat here’s we’re going to bolt on sentiment analysis here we’re going to take some off-the-shelf product and bolt it onto our product that’s in reality the ai the the the value being generated by artificial intelligence is really from the that third-party product you bolt it on it’s not from your product so i know it’s it’s it’s a bit broad but um that’s kind of really the really the distinction is you know understanding what is it good at which also means you don’t need to actually understand the tech right you need to understand the four or five things that ai is good at and understand how those impact your product you don’t need to understand how to train a model you don’t need to know how to train a a deep neural net like you don’t need to know how to do those things you just need to know what do i need to give to the neural net and what do i get out of a neural net and how does that affect my product.

Jeffery: And which is great so does that also entail that when you’re putting this together you’re looking heavily at that early team as well and you’re defining all the roles and saying okay you guys don’t actually have anybody that is a python developer how are you actually really working in this ai stream so are you really diving in as well to pinpoint out to make sure that all of these equal out to the output that you’re looking for.

David: So i mean i think to a certain extent it’s still such a nascent field i mean it reminds me a lot of it reminded a lot of the web in 95 when i got started in tech right is you didn’t have web developers right you were taking mainframe developers you were taking client server developers you were taking traditional developers and handing them html and going hey go build a web app right we’re doing the same thing right now and we’re at the same level of maturity in the technology uh with the technology and with the the the with sort of the training um in ai so we’re taking you know javascript developers we’re taking you know sql developers and we’re we’re turning them into to data scientists so the exact skill sets on the team are less of a concern than actually understanding that big picture because we are we’re investing so early that a lot of our companies like if you press me on it’s like yeah they’re not really you know they can’t do air they really can’t build they can’t build highly accurate models right now just because they don’t have enough data or they don’t understand enough of the they don’t understand enough of the features um in it so you know we understand that there’s a there’s an evolution and even generally speaking whether it’s ai or any kind of software product at the seed stage your product is gum and duct tape like it is not it like what it’s going to look like three years from now like it the the term technical debt is going to be one that gets thrown around three years from now and it doesn’t matter.

Jeffery: What you do early on well fair enough and it’s good to share that because as much as we want everybody to be perfect and to build that 18 month system it’s not going to happen as you mentioned earlier it’s going to be that smaller version and that smaller version might be a few band-aids here and there that are kind of holding it together and popsicle sticks but at the end of the day maybe that is what is needed to prove the market and then it’s the next stage and the the next uh shot of brilliance that’s going to move them into the bigger picture and that’s going to help it.

David: Absolutely i had a i had a company that i i launched and shut down a couple of years ago that was a recommender system in the in the ticketing space and before we ever trained any models there was one key assumption we needed to we needed to try and we needed to figure out will consumers respond to a curated result right will they respond to the recommendations that’s question number one i don’t need to build any ai to do that and i don’t it first is will a consumer respond to curation then you start to get into okay what degree of curation is is necessary because it may not even need to be curated and personalized one-to-one it may just simply be let me curate it based on some high level factors and now i’ve got a result without ever implementing that so in in a lot of cases you’re going to go through that discovery process without having to without having to go build the tech going back to a lot of our conversation earlier is like you know how do you get to that point and how do you get to that mvp without investing too much time and energy and training models doesn’t it strangely training changing training your models and being accurate with your models in many cases doesn’t prove that it actually solved the problem.

Jeffery: Interesting very interesting now taking that perspective and what you’ve built and all these great things you’ve done blockchain tokenizing nfts and ai tie all these things together web 3.0 where do you see the industry moving to are all of these going to be big massive industries in the next three to five years 10 years are they like what you said as they’re the web in 95 and these are all going to be the best next things coming or do you see there going to be a shift and do you think ai kind of dominates over this or is it a blockchain shift that gets up what do you think is going to be the way that these markets are going to play.

David: So i look at ai is in the the trough of disillusionment right now we’re starting to come out of it to where we’re starting to see broader base acceptance like that standard gartner hype cycles where you know about 2015 2016 ai really peaked when everybody had a chat bot for everything and every single chat bot was terrible and we basically turned the entire market off to artificial intelligence um now we’re starting to see it come out but again it’s coming back ai is having sort of a resurgence because we’re talking about the problem it solves we’re not talking about it’s ai you know ooh it’s ai driven it’s really just here’s the problem um i think where we we just broke the peak on on blockchain um and we’re heading into the trophy disillusionment i think a lot of the sort of over over-exuberance a lot of some of those early use cases um have turned people off but i think there’s a they’re coming from the ticketing space i can tell you that for smart contracts and open ecosystems there’s lots of opportunity with ticketing right and um it’s just going to take there’s a different in in blockchain there’s a different dynamic because it requires collaboration in places where lack of collaboration creates a competitive advantage right so ticketmaster has a competitive advantage because they don’t collaborate it’s a closed ecosystem therefore they own the they own the vast majority of the data they have control over the market as soon as that opens up and right you know as soon as a ticket becomes a thing that exists on a just a block on a chain you know now ticketmaster loses that control now control gets handed out to handed back to the consumer it’s handed to the team it gets handed to you know it gets taken away from sickness and that that’s one of the things that we need to solve in this process in the process of adopting blockchain is how do you how do you deal with those those incentive structures.

Jeffery: Now well shared and it makes me think of the music industry tick-tock becomes the uh decentralized part to how music is now being distributed everywhere so you’re losing the big players in music because of a tick tock because of social media so in the same instance with ticketing ticket mastery is that same thing but if you drop that into a blockchain or drop that out that anybody can now equally go in and get tickets and you create that company that now does this whatever that company is you’ve now done the same thing you did to the music industry where you’ve dropped everything down to the common denominator where you can’t go anywhere else and that goes for all tickets so there is a way to decentralize that and i think you can almost look at this is that every industry is going into that decentralized component where it’s everybody’s been running big on the bank side and now you talk in the last interview that we did there was all of the banks in latin america well they’re all doing a bad job or they have been recently doing a bad job well now you can decentralize them all and create many many many players that all fill in the gaps along the bottom which again force that change like the music industry or like the ticket industry.

David: Yeah and that’s that’s where the opportunity is right and it’s the that’s the barrier to adoption the barrier to me in decentralization does tend to be around the incumbent players fighting to hold on to their information right or their their competitive their competitive advantage that’s delivered by closed ecosystems rather than delivering value.

Jeffery: Well it sounds like it’s going to be one big whopping change in the next 10 years you’re going to see a lot of these big players start to drop i guess because they’re not going to be able to keep that control if they wish now banking maybe in north america might be a little tougher because they’ve done a great job at managing it and controlling it so maybe that’s not as easily broken but it seems like a lot of other players were are going to be faced with these uh incumbents coming in and changing their markets.

David: Absolutely

Jeffery: Brilliant all right we’re going to make a shift we’re going to go into uh being a little bit more tactful now we’re going to talk to uh if you can share maybe a case study if you will of an experience or a startup that you’ve worked with in your past that really kind of define what it takes to be an entrepreneur i think we all have these glorious moments where we think entrepreneurship is billion dollar unicorns every day and every night but there are a lot of things that have to go into them and maybe you can share a quick anecdotal story or something that you know of that really kind of blew that out of the water for you.

David: So this is one that it’s relatively recent and it’s one that goes back to a lot of our talk about how you work with how you work with advisors and synthesis of information and how you actually like how you adapt as an executive so one of our portfolio companies had an opportunity called me up and said hey we really want to take advantage of this opportunity and my first response was oh my god no um run far run fast don’t do it and instead of leaving it at that right instead of letting me just talk him out of it he looked at me and he said well what are your objections to it right and i said well here’s the three or four three or four objections that i have you know um and he said well if we can come up with a way to solve those would you be in favor of being in favor of pursuing this opportunity i said sure well give me a week schedule a call for next week and and we’ll go from there so he goes away we schedule the call for next week he comes back sends me over it sends me over kind of his like 10-point plan of how he’s going to pursue this opportunity and i look at that plan and i’ll be honest it actually made me feel jealous as a as an operator like i looked at it and i said wow like he actually took the input for he took my input and actually created a plan better than i think i could have created right and you know i i looked at the point i looked at the results and i’m like if you can make this work this is a massive win right and i love that story from i love that story a is an entrepreneur not willing to be an entrepreneur not willing to take no for an answer but doing it in a way that isn’t just pig-headed stubborn of now i’m gonna do it anyway but of listening to listening to his trusted advisors listening to the market and saying hey we need to make we there there’s something broken about the way we’re pursuing this let’s figure out a better way to do this and creating a better outcome so that’s probably one of my favorite stories about uh as of late and it ties into a lot of what we talked to.

Jeffery: I love it uh not taking no for an answer but coming up and being strategic about it i
think that’s brilliant in it and like i said it puts you in a spot where you actually maybe the word wouldn’t be jealous maybe the word is excited for the fact that somebody was able to build something outside of your perfume that you didn’t think was possible in the space and they proved you that they could and that goes to your coaching and advising so that’s a good thing it makes uh makes you feel good because you’re like hey man we helped you in a way get this far and now you’ve really stepped it up a notch you’re really a ceo and i think uh that’s pretty phenomenal so that’s an incredible story i love it all right we’re gonna move into um rapid-fire questions so pick one or the other as an investor perspective uh founder or unicorn or sorry founder or co-founder

David: Founder

Jeffery: Unicorn or a four-year 10x exit

David:I’m a vc now unicorn

Jeffery: Love it tech or cpg

David: oh Tech

Jeffery: Nft or web 3.0

David: Web 3.0

Jeffery: Ai or blockchain

David: I got to say ai

Jeffery: First time founder or second third time founder

David: Second or third time founder

Jeffery: First money in or series a

David: First money in

Jeffery: Angel or vc

David: Vc

Jeffery: Board seat or observer

David: Observer

Jeffery: Seat or convertible

David: Convertible

Jeffery: Lead or follow

David: Either but follow

Jeffery: Equity or interest

David: Equity

Jeffery: Favorite part of investing

David: Uh being on a bleeding edge

Jeffery: I love that part too number of companies invested per year

David: Uh six to eight

Jeffery: Love it any preferred terms

David: I we typically cap out around 15 million posts so we’re usually looking at companies you know we’re looking a rounds between 750 and 3 million um up to about 15 million post money.

Jeffery: Perfect two qualities a startup needs in order to stand out to you

David: Um well it’s really their product their product needs to be a need um their product needs to be a need and their team really needs to understand the problem that they’re solving um whether they have experience in it or not.

Jeffery: Okay uh we’re gonna shift to the personal side book or movie

David: Movie

Jeffery: Superman or batman

David: Batman

Jeffery: Restaurant or picnic

David: Restaurant

Jeffery: Five minutes with bezos or oprah

David: Bezos

Jeffery: Mountain or beach

David: Mountain

Jeffery: Bike or run

David: Bike

Jeffery: Big mac or chick mcnuggets

David: Mcnuggets

Jeffery: Trophy or money

David: Money

Jeffery: Beer wine

David: Uh beer

Jeffery: Camera mobile phone

David: Camera

Jeffery: King or rich

David: Rich

Jeffery: Concert amusement park

David: Amusement park

Jeffery: Fortune cookie or birthday cake

David: Birthday cake

Jeffery: Ted talk or book reading

David: Ted talk

Jeffery: Tick tock or instagram
David: Tick tock

Jeffery: Facebook or linkedin

David: Linkedin

Jeffery: First our sorry most famous person that pops in your mind

David: Uh probably because i have our office uh walter payton

Jeffery: Nice favorite movie and what character would you play

David: My favorite movie is matrix um so i’d have to be neo right

Jeffery: Yeah that’s perfect favorite book uh

David: I’m supposed to say something venture related but all that’s coming to mind right now is uh um the three musketeers by alexander dumas.

Jeffery: I haven’t read that one i don’t think but it sounds like uh it’s good doesn’t have to be venture related ah we learn from everything we read first brand that pops into your mind.

David: Apple you’re priming with the the the airpods

Jeffery: Favorite sports team

David: Chicago bears

Jeffery: Favorite sorry what is the meaning of success to you.

David: I the meaning of success is not having any have tubes right like if you’re successful you don’t have to get up today you don’t have to go to that meeting you don’t have to do anything right that’s success to me not having have too’s

Jeffery: I see it i like that one that’s uh it’s good i don’t want any half shoes either what is your superpower

David: Um i’m a really strong read of people even if i haven’t met them.

Jeffery: I like it i like data so in in the case of asking these questions it’s profiling i guess but you learn a lot from it and it’s uh it’s fascinating but i can say that apple and maybe it’s the earpods but apple is like a 60 choice of uh of investors and um.

David: Well i i’ve been looking at the air i’ve been looking at the airpods for the last you know 45 minutes so i guess you are doing a little bit of priming although i’ve also been looking at the dell logo on my laptop too so you know.

Jeffery: They do a great job apple is phenomenal on how they they do market so regardless of just the you know there’s a lot of signals but they they do a great job and uh for not being the number one mobile carrier etc etc they’ve done a pretty phenomenal job so uh but we learn we learn everywhere we go so big fan of that but i think um david i want to say that it’s been a pleasure i’ve taken lots of notes it’s been awesome to be able to get the time to spend with you and to dive into not only your background what you guys are up to today and how you guys see the space of ai and and all of the uh areas that kind of support it and where it’s going but again i appreciate all the insights it’s been awesome and the way we like to kind of end our show is we like to give you the last comments and thoughts and share that to the startup community and to investors alike so i turn it over to you but thank you again for uh sharing today it’s been a privilege getting to chat with you.

David: Well thank you it’s uh it’s been the same this has been it’s been a ton of fun um i mean honestly the the thing that i i would share with founders is you know dms are open email is open you know we we love to talk to founders and our goal as as founders is that um i just said this today is that every founder we work with should be referenceable whether we invest them or not like you may not like me very much because i pass on your company and you’re not a fit for our thesis but hopefully everyone that i encounter we’ve treated with respect the you know we’ve treated you fairly um and that you know you’d be willing to say those things about and we treat you with honesty right um that’s kind of our that’s kind of our goal and how we want to work with the world hope to get the chance to to work with you more and and work with some of your listening.

Jeffery: I love it and last question how do people get ahold of you what’s uh is their email linkedin what’s the best way.

David: Dms are open on twitter reach out on linkedin and also it’s just david centero.buc um happy to talk to happy to talk to anyone we don’t we don’t require warm intros.

Jeffery: I love it well again i appreciate all your time david thank you very much for sharing.

David: Awesome Thank you jeff

Jeffery: well there’s been a lot of uh great great discussion with david and certainly a lot of things that we dived into uh from your mvp to you know even if you’re going to start off instead of building the big system there was always that retraction and going and building something small getting out to market testing the market learning from them uh you know there’s lots of inter uh companies that are changing from paper to digital and hopefully they’re all at that stage now but you know the synthesis was really the one that really stood out for me on his advisory side and how to make and build the ceo so not just be an operator and running a company but being the ceo of a company i think that’s really impactful today as startup founders start to grow their business and start to get out of the day-to-day and start moving into that micro i think he shared a lot of great information and insights on how you kind of move from you know building out this strong rapport with your team um and learning and being the best in that industry taking insights from advisors coaches everybody and then synthesizing that back into your strategy into your plan and then being able to keep moving yourself forward and growing and allowing your team to take over and become the drivers of areas of your business as you grow as a founder and grow into that ceo role and start being more macro so a lot of great insights very exciting and conversation and i will have to say it was um always great to talk with a fellow techie so thank you everyone for joining us today if you enjoyed this conversation please feel free to share with your friends or subscribe to our youtube channel follow us on spotify apple podcast and or stitcher feel free to share an audio or video clip around our show with any questions that we may be able to include in the next future podcast find us at marketing at your support and comments are truly appreciated you can also check us out at or startup events visit thank you and have a fantastic day.

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