Rewiring how we work

We’re starting to place a big emphasis on our working culture going forward. We’ve had some initiatives over the past year or two, but we’ve started to realize that things have slowly regressed.

Remote work has presented more challenges over the years. And we feel that it’s incredibly important to address those challenges head on from time to time.

One simple but silly thing we’ve realized is that we have way too many Slack channels. For a relatively small company, I feel like we have 5 slack channels for every person. This has caused people to work in silos. We’ve got to open the lines of communication so everyone is aware of what is going on.

Another issue is that we’ve stopped calling each other and have just taken to sending large emails and slack messages. While Slack and email are great for simple communications, you do not get close to the same level of brainstorming and we need to be talking to each other more.

These are all simple and seem silly, but if unaddressed, can really impact performance at a company so one of our initiatives in Q4 is to reset the remote working culture.

In person meetings

I’m at the point of the post-pandemic world where I think it’s ever more important to meeting our colleagues, partners, and clients in person. Zooms are great, but there’s nothing like a bond that is made from meeting together.

First, I think it’s incredibly important to build trust. Zooms feel very transactional. We have our 30 minute slot. We meet and we end. Everything just feels impersonal and that’s detrimental to building trust.

Second, conversations and ideas just flow much better in person. I’m sure there’s some science behind this, but people just talk more freely and openly when in person. It’s night and day for me when I have a brainstorming meeting via Zoom compared to in person.

Lastly and arguably most importantly, it’s just a lot more fun and less stressful. Zoom fatigue is real and I definitely struggle with it quite a bit. Being in person can energize me quite a bit.

As much as possible, I’m moving my meetings to in-person. It’s worth the price of that coffee.

The ultimate guide to success

A few people from my team were having a quick bullshit session before one of our meetings and the topic quickly changed to all these hustle porn people on LinkedIn and Twitter. Everyone unfortunately has seen these people - the people who claim to have the keys to success if you follow them.

They all follow a similar pattern. They follow people who have had success (oftentimes themselves) and highlight the things they do that made them successful. These keys can be anything silly from taking a magnesium pill in the morning to dieting to work habits.

Look, I’m sure some of these tips are great and do help you live a fulfilling and successful life. Yes some diets can give people more energy to do good work. Implementing Bezo’s 2 pizza rule at your company may work well for you.

But what I hate about these people is the narrative that implementing this also implies that you’re going to have similar success. These people are often selling a “silver bullet” solution that will fix all of one’s problems and make them overnight successes. In fact, think about all of the people who do implement this “fix” and have not become successful.

There’s too much bullshit nowadays on the internet.

Recapping New York

I got back to San Francisco on Saturday afternoon absolutely dead. I had a bit too much fun catching up with my old friend on Thursday for the 49ers game. And I was running on fumes when I got to see my other old friends on Friday. I ended up powering through and paid the price dearly on Saturday.

It was not an early flight at 11am. But it was not an easy one as I felt like I had slept a total of 8 hours the past two nights. I know I had gone into the week thinking I was going to take things fairly easy, but I had a lot of fun and the pain was well worth it.

Next time that I head out to New York, I need to come up with as bit better of a plan of attack. I kept things relatively laid back in the early parts of the week and felt great. But despite trying my best to get more rest, I ended up exhausted by Thursday. I have never been a good sleeper and the energy levels of New York didn’t help get me to bed earlier.

In terms of work, I had a fantastic week with the team. I felt many times more productive being together face to face with everyone. It was just crazy how much we interacted by being in the same room together. Things that would have taken perhaps a week or two to resolve were able to be hashed out quickly.

New York in general just has much better energy than San Francisco. For a fintech startup, it’s fairly obvious that it’s the place to be. Sophia and I will be doing a lot of thinking in the next few weeks to months to determine if we want to make the jump back to New York for a few years. At the moment, I’m riding my New York high still and waiting for that to fade a bit before I make any rash decisions.

Q4 prediction

We have yet another IPO with Klaviyo listing yesterday and having a solid exit. That makes two VC backed tech IPOs this week and the IPO window is officially open.

There is a huge backlog of companies looking to go public and I expect a handful of these companies to follow Klaviyo and Instacart given the relative success.

I previously had thought that we’d see less than 5 VC backed IPOs in 2023, but I’d likely take the over at this point given where we stand. Of course that can all change very quickly.

I also think expectations need to be tempered. While Klaviyo and Instacart getting to an IPO is impressive nonetheless, it would be remiss not to mention that they both are still trading at discounts to their last private round. I expect most of the companies that go public to go at much more modest valuations and likely below their last private round if they raised in 2021.

I also expect secondary market activity to pick up quite a bit going into Q4. Investors are now hunting for pre-IPO stock and there is a huge need for liquidity.

SF vs NY

It’s hard not to have crazy energy to hustle and get shit done after being in New York for a few days. The city is completely back and thriving. Office buildings are packed. Lunch spots having lines out the door again. The tourists are filling the city. I left the city before the pandemic began, and there seems to be even more activity than when I left.

This is obviously the opposite of what’s happening in San Francisco. Workers are not going back to the office like they used to. Restaurants and stores are closing rapidly in downtown. I’ll admit that I’m seriously considering moving back to New York even after being here for 3 days. I miss being in the office with coworkers all the time and the energy that others bring.

Of course, New York isn’t perfect. There seems to be more homeless people on the streets than I recall before. There also seems to be increased retail theft in stores as well. I walked by many places with lots of signs signaling as much. But the issues seem to be drowned out simply by the level of activity in New York.

San Francisco will come back. It’s not dead. There’s still a huge density of talent in the city. It’s still a gorgeous city and I plan to make it my home permanently at some point. However, New York has given me a lot to think about given that I’m 33, married and have no kids. I could be down for another New York stint soon.

IPO window!

I’ve done a bit this trip to make sure that I stay in a healthy mindset physically and mentally. Normally when I travel, especially to New York, I find myself running on fumes the entire week. My pattern historically has been to take as many meetings as possible, eat like crap, and not get much rest. I’ve tried really hard this trip to get more sleep, drink a lot less alcohol, and work out a lot more. It’s paying off as I’ve been feeling great the last couple of days.

Switching gears. It finally seems like the IPO window is officially open. Instacart had a great debut today and opened at $42 per share. It’s since dropped a little bit and of course, no one knows where the price will be in a few months. But overall, it’s a great sign for tech companies. Klaviyo should be following Instacart shortly and they have a chance to open at close to the last round done in 2021.

Given the recent and rumored successes of the first few IPOs, I expect that a lot of companies will be dusting off their S1s and filing shortly. The window is open now until Thanksgiving so we have about 2 months of IPOs upcoming. Hopefully things hold up and we get to see some success after nearly 2 years of pain.

New York, New York

I landed in New York last evening and had a nice night to myself. I lived in New York for 5 years and have been in SF the last 5 years. I love New York, but it does come with it’s own stresses. Within minutes of getting off my flight at JFK, I could feel the anxiety and stress pick up quickly. JFK is always a wreck and my cab driver tried to hassle me into paying cash.

I booked the cheapest hotel that did not seem to have bed bugs, and it is your typical old cheap New York hotel. I’m used to it after living here in my 20s, but I could see why a tourist would not be neccessary happy with a hotel like this. I dropped my bags and went off to one of my favorite restaurants in the country, Szechuan Mountain House.

It was humid and rained on me during my walk down. I got to the restaurant at 8:30 and had a 45 minute wait which ended up actually being a 15 minute wait. All that trouble and I had one of my favorite dishes within 20 minutes. All my stress was gone at that point. I remembered why I love New York again at that moment.

This city is amazing in so many ways. The energy levels here are off the charts. Unlike San Francisco, New York seems completely back. It’s crowded and people were out in force even on a Sunday night. Despite some initial anxiety of being back, I’m stoked to be here this week and I’ll be sad to leave on Saturday.

The retail investor

Investing platform startup Sandhill has been running this live auction of Databricks shares for the last few days. I’ve been following it closely as it’s a transparent view on retail investors bidding on a top private company. I don’t believe this has been done before so props to Sandhill.

The reason I’m interested in this is because I do this for a living, and I’m curious to how people who don’t do this for a living interact. I’ve followed Databricks very closely since joining Secfi and it’s been one of the top private companies in this space ever since.

The company just announced a fundraise and the projected share price should be around $75 give or take a few dollars based on some back of the napkin math. That is an upround from the Series I of $73.48, but not by much. Interestingly enough the round was announced during the live auction.

One noted observation is that bids have picked up since the announcement. Unfortunately, that could be a product of both the the auction coming to an end because people are waiting to put their bids in. Or the announcement affecting behavior. Likely a combination of both.

Secondly, it’s very interesting to see retail bidders putting in bids higher than that “market” for common stock. Yes, investors are buying in at $75, but they’re playing a different game. For one they are buying preferred stock. For another, they have different return profiles and holding periods than retail investors investing in a SPV that likely gets liquidated after an IPO.

The last 409A value was $55 and the market based on the data sources I’m seeing is somewhat around there as well meaning investors are typically buying common there. Pretty much ALL the bids made here are over the $55. As it stands now, the price of the live auction is $69.69. (I know… not a joke… but nice coincidence). So retail buyers are paying a premium to what they would or could typically get in the secondary markets.

In the secondary markets, there’s definitely a supply issue as there are likely more buyers than sellers right now so that’s something to consider. Regardless, it seems that retail investors are very much happy to pay a premium to be invested in a hot name like Databricks.

I’d love the opportunity to interview some of these people and get a bit of their strategy for putting thousands of dollars in Databricks at these prices. That won’t happen unfortunately. At the end, it’s a great company and could be a good investment despite paying a premium, but it’s fascinating to take a look regardless.

2021, what a time to be alive

I’ve started planning on how to close the year strong at Secfi and will be headed to New York for some in-person planning meetings. I’m excited to see everyone in person again and actually do some proper brainstorming.

On another note, I can’t believe that we’re almost in Q4 2023. The craziness of 2021 felt just like yesterday. A little under 2 years ago, the talks about interest rates rising began and officially put an end to the ZIRP world.

Whenever I catch up with friends who work in tech or investing, we almost always talk about those crazy days. We share war and horror stories. We laugh at others and ourselves. And we talk about how much we learned.

Some of the stories from that period are just downright insane. People in charge of millions of dollars throwing it around like it’s candy on Halloween. No real basis for investment decisions besides wanting to win. Founders running effectively live auctions for funding rounds.

We’ll likely never see a period like that again in our lives. And that’s a good thing. It was unhealthy and not the least bit sustainable. I’m happy to have lived through it and learned a lot then, but I hope to never see another 2021.

Free days and self-starting

Today is one of the rare workdays where I have minimal calls. Just under 2 hours worth to be exact. That’s a rare day for me as I typically live on Zoom nowadays.

I’ve always been fortunate to work in a role that has been fairly flexible. Even during the early days of my career at PwC, we had quite a bit of wiggle room where we weren’t always required to be in the office from 9-5. Of course part of that deal required a lot of late nights during times of the year.

When I transitioned to startup world with Secfi, I was largely by myself in San Francisco. We eventually hired people but for the first year and some change I was navigating the world through Slack and Google meets.

I love the freedom that I have in my career. As someone who is very self-motivated to get shit done, having the flexibility to create my own schedule allows me to maximize my productivity. Some of my best ideas and projects have come on days when I’m sitting alone in an office with my own thoughts.

It’s not always easy though. On a gorgeous day, I admit that I often want to leave the office and hit the golf course or the beach. It’s easy to get distracted with other tasks and responsibilities during these free days as well. It takes quite a bit of discipline when no one is watching over your shoulder.

I may switch things up this afternoon and try to work from a different WeWork to get my creative juices going. These free days are a rare treat for me and I fully plan on taking advantage.

Listening to my body part 35885

I’ve written quite a bit about my battles with getting older, adjusting my life style, and listening to my body over the last few years. It’s been a struggle at times changing some habits to combat my aging self, but I’ve also had some great successes over the last couple of years.

For one, I’ve slept a ton more in the last year and half than I have the rest of my life. I’ve adjusted my bedtime earlier and I no longer stay out late except in rare situations. Similar to that, I’ve also started to get more rest overall.

I’ve also cut down on my drinking quite a bit over the last few years. As the hangovers get worse, the alcohol becomes less attractive. I no longer have any nights out late at the bar. I try to drink more water between my drinks.

For as much progress as I’ve made, I’ve also realized yesterday that I probably haven’t made enough. After a productive Monday morning, I hit a wall in the afternoon yesterday and I was clearly exhausted from a likely combination of this recovery from being sick the last couple of weeks and a longer Saturday than my body could handle.

It’s definitely a frustrating situation. I didn’t have a crazy Saturday by any means. I golfed in the morning and watched football afterwards at my friend’s place. While I did drink a bit, I made sure to drink a lot of water and was even in bed by 11. This would’ve been a very calm night in my 20s, but alas I’m no longer in my 20s.

One thing that I’ve learned about getting older is that the bar constantly changes. I’m finding that I need even more rest nowadays and a big part of that is cutting back on the alcohol so I can get that rest. It also means taking more rest between my work outs. And working a bit less to balance out my life more.

It’ll be a bit of an adjustment period, but I’ll feel better for it afterwards. It also won’t be the last life style change I’ll have to make so I better get used to it.

Breaking 90 and addressing problems ASAP

I finally did it this past weekend. After a long 3 years of playing golf, I finally broke 90. I had a great round with the usual crew on Saturday. I couldn’t get off the tee for shit and my driver was all over the place, but my irons and short game held me together. My approach game was amazing as I was absolutely striping my irons all day. It wasn’t pretty or perfect, but I put together a solid round and finally got it done.

It was funny that it happened on Saturday because on Friday I went to Mariner’s Point to practice my short game for the perhaps my first time ever. My 100 on in has been the weakest part of my game, but it’s been brutal to actually practice that anywhere in San Francisco. Turns out that practicing the worst part of your game usually leads to good things as I stuck a 60 yarder to 2 feet and a 80 yarder to 1 foot on different holes.

Note to self - address your problems as soon as possible. I’m not sure why I avoided practicing my short game for so long, but I feel like an idiot now. I can’t help but think how much earlier I would have broken 90 if I did.

Going forward, I need to address my driver issues and practice some putting. One thing at a time though.

Tech drama in 2023

I’m really enjoying watching this drama unfold at Flexport. The Founder and then CEO, Ryan Peterson, hired a new CEO last year to run the company, and apparently they haven’t exactly seen eye to eye.

This all unfolded the other day when the CEO said he was stepping down, and Ryan was coming back in as CEO. This is not the abnormal part of the story as things like this happen often.

However, Ryan has been openly tweeting about everything that has happened at the company. It’s been absolutely hilarious to watch as there are not so subtle jabs at the previous CEO built into nearly every tweet.

The tech scene nowadays is never boring. For an industry once known for being a bit more private and laid back, this world is now filled by people with large egos and bones to pick. They’re also more than happy to do it online in public.

It’s funny to see the contrast behind the Bill Gates and Larry Ellisons of the world versus today’s tech leaders such as Elon. It’s the day and age of social media and everything is out there for better or for worse.

The cost of bad advice

At Secfi, we’re in the business of helping startup folks with financial advisory services and financial products. We build tools so startup employees can better plan around their equity. Those are completely free to use. If people want more in-depth help, they can work with one of our advisors.

Over the years of building this thing, we’ve seen some horrible financial decisions made by individuals and/or their advisors. I don’t judge financial decisions by their outcome - sometimes things just don’t work out for various reasons. But when I mean bad financial decisions, I mean obviously stupid ones that either take on no risk or take on too little risk for a person’s situation.

Both can be incredibly costly.

For example, a startup employee who doesn’t exercise early when the cost is low and can afford it in their financial plan will likely be left with much less in their pockets after exit due to taxes.

On the flip side, a startup employee who exercises by leveraging his home and taking recourse loans is likely overextending. It may work out, but if it doesn’t, this individual risks his entire livelihood.

The cost of this bad advice or bad decision can come back to haunt you years down the road. We’ve unfortunately seen a lot of this over the years. It may seem expensive today to get good sound advice, but at the end of the day it likely pales in comparison to the cost down the road.

When things just don't feel right

I’m on day 10 of this cold. The fatigue is nearly gone, but this cough does not want to go away. This should serve as a reminder that I now need to take it easy when I’m starting to feel sick. Taking a day or two off to rest and recover fully beats being a shell of myself for a week and a half.

One big lesson that I’ve learned at Secfi and investing over my 5 years is that you just need to trust your gut when things don’t seem right.

Early on during my time at Secfi, I was much more hesitant to bring “yellow flags” up for fear of being wrong. At that point, I convinced myself that I was new to this game of investing and that’s just how things were.

Sometimes it would be a odd signal that a bunch of executives were looking to sell out quickly. Or sometimes it would be a group of key engineers on what seemed to be a rocketship looking to leave early and leave a bunch of unvested options on the table.

Of course these are just signals and doesn’t mean necessarily mean the company was in bad shape. But I often found that these yellow flags would add up. Often when that happened, the company almost always turned out to be a bad investment.

Nowadays, it’s pretty obvious when things aren’t going well at a company for me. I can usually tell within the first 10 minutes if the executive or employee believes in the company in the long-term. When things just don’t feel right, we make sure to pass fairly quickly.

Aging

I’m at an interesting age in my life at 33. I’ve crossed the point where I’m officially in my mid 30s. I don’t know what the proper cutoff age for “youth” is, but I know the right answer for most people is somewhere between 20 and 35. I do know that I’m at best closing out my youth officially.

I saw a lot of college buddies in Seattle this weekend. I had a blast catching up with everyone, but I also couldn’t help but to think how much we’ve all aged. On one hand, we were acting a bit like college kids at times on Saturday. But on the other hand, the elephant in the room is that we’re all now in our 30s and can’t keep up any longer. Friends were pregnant. Some friends had kids to go home to. Some friends were just too tired.

I was further reminded of my aging self when I got home on Sunday. I had been battling a minor cold and cough this past week. I thought I had beaten it by the time I got to Seattle, but the cold came back with a vengeance on Sunday and Monday. Normally colds mean minor annoyances for me. Nowadays at age 33, it means I’m even more fatigued than normal and I should probably take some time off to properly rest.

Of course, it’s not all so bad. There’s this hard to explain beauty behind getting older and I have grown to liking most parts of it. I just wish I had a bit more energy and I could go away for a weekend without needing another weekend to recover. But that’s life.

Scary times in crypto

I’m off to Seattle for an extended LDW. I’m excited for the R&R before things pick up.

On another note, I’ve been reading just how much is happening right now in the crypto world with regulators and lawsuits. It’s a scary time right now for everyone in the crypto world.

Yes, there have been some big wins. But the SEC and other regulators did not seem to be letting up in their crackdown. I don’t know how things will shake out. I know the crypto industry needs regulation, but at the same time, there’s a real risk that over regulation really puts us behind the rest of the world when it comes to tech.

One thing is clear to me though and that is our current systems and rules do not work. We need a different enforcement agency and modern regulation in order to properly govern crypto. Given the state of our government, I unfortunately do not think that’s happening anytime soon.

Navigating the social media age

I loved the internet and computers growing up as a kid. I played video games online, built websites for fun, and was wowed by what I could accomplish over adults being literate in computers.

Then came the social media age which turned the internet into one giant popularity contest. I wasn’t a fan, but I needed friends in high school so I participated reluctantly. I was a freshman in high school when MySpace was a thing. It wasn’t a necessarily fun time as we spent more time angry at each other over Top 8’s rather than actually getting to know each other.

Eventually, MySpace turned into Facebook and it became yet another popularity contest albeit a much tamer one. It wasn’t great for my self-esteem at a very vital time in my life. And I was admittedly probably someone who contributed to those self-esteem issues for others as well.

I think growing up in that original era of social media was one of the big reasons why I don’t love social media overall. It made me a bit different as a person, in a not so great way. Sure social media has it’s positives - it’s entertaining for sure and helps me keep in touch with friends and family.

I turned out fine (sort of), but I know social media has impacted a lot of people’s lives in net negative ways.

Today, I have a presence but not a very active one. I have an Instagram I use for personal and mainly to keep in touch with friends. I have a Facebook that I never log into except to use Facebook marketplace. I have a Twitter which I used to use a lot more for work, but that has died significantly since Elon took over.

I’m not sure what Sophia and my strategy for our kids with social media will be. It’s something I think about a lot admittedly. I don’t want my children to feel left out of the digital age, but at the same time, I know how toxic social media can be for a developing human.

Small financial mistakes lead to big losses

I’ll never forget one phone conversation I had early on in my Secfi career. My then CEO added me to the provide some expertise around the tax side for a potential client. He was an early employee at Pinterest and helped build the company. He had exercised his stock options early and was planning around the IPO.

When my CEO heard that, he asked whether he had filed a 83(b) election with the IRS which effectively tells them to tax him now when the tax is $0. The call goes silent and it was immediately clear that no one on this person’s team knew whether they had or not. I won’t go into specifics of the details, but let’s just say he was a lot less wealthy because of some simple paperwork he neglected to file.

You only have 30 days after exercise to file the 83(b) and it can mean the difference between a $0 tax bill and large one if and when your company exits.

I’ll be filing 2x 83(b) elections for a couple of my angel investments today. Every time I file one, I think about these small financial mistakes or oversights that lead to a huge amount of money lost.