Mat Vogels (00:10)

everybody. Welcome to another episode of Fundraising, a podcast where we interview top early stage investors to peek behind the curtain a little bit, especially for you first time fundraising founders on exactly what the fundraising process looks like. Kind of like the title says, it is called fundraising, but fundraising is absolutely no fun at all. And I can't think of somebody

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better to have on here somebody who I have the privilege of working with every single day here at harpoon and black flag. Andrew, thank you for coming on. Could you give a quick introduction on yourself and black flag?

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Andrew Couillard (00:46)

Matt, honestly, the honor and privilege is all mine, especially to work with a creative genius like yourself. So, hey everybody, my name's Andrew. I actually was born in Canada, grew up in Colorado, went to the University of Southern California on an ROTC scholarship, so the military paid for school, and then I went and defused bombs for the Navy for about eight years. It's a wild tour, went all over the world, lived in Rota, Spain for three years, and then went all over Europe, Africa, and the Middle East, and then my second tour was out of San Diego, spent a lot of time in Asia, focused on that problem.

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Mat Vogels (00:48)

Hahaha

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Andrew Couillard (01:13)

and got exposed to the undersea drone portfolio. I was just frustrated with how behind we are in so many different ways, right? There was better AI in every single consumer app in my cell phone than the AI we were onboarding to all of our undersea drones. And felt like I could do more on the outside than I could within the organization. So I put my name in the hat to go up to Stanford. Actually, before that, joined Harpoon while we were incubating a company called Vector at the time, served as an interim chief of staff before they had a full-time hire and caught the bug for early stage. I just love being in high-performance teams, really small environments.

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the lateral latitude that you have working on audacious problems. Caught the bug two years ago and I've been doing early stage venture ever since. So I now sit on the deals team. I'm also on the government go to market team and programmatically the program director of Black Flag, which I'm happy to dive more into detail, but that's one thing that I'm incredibly excited to talk about here today.

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Mat Vogels (02:00)

Yeah, I love it. Such an incredible background. think a lot of the founders, whenever they get to work with you, appreciate how much of the operational experience, obviously with the military background and all the experience you can bring from that, but in the founder experience as well with Vector and then obviously working hand in hand with a lot of these other companies. Could you give a quick overview on the Black Flag program itself? What is it? What type of companies Black Flag is looking for, stages, check sizes, all those stats?

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Andrew Couillard (02:23)

⁓ Yeah

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Definitely. And I think the best way to phrase it is Black Flag is the next step or evolution of Harpoon Ventures. Right. We believe that the venture world is bifurcating. You have these big Goliath firms like Thrive Capital just raised a $10 billion fund, A16Z, $15 billion. They're going to be incredibly good at the growth stage, right? Series A and beyond, to be honest. And a lot of the other side of the barbell is these early stage boutique specialists. It's just right where Harpoon sits. And we specialize in helping our founders navigate government, go to market, whether that's just for a customer or non-dilutive grants, literally to get

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money to build the things you were already going to build anyways. And Harpoon was born a necessity not only just to go earlier, but the fact that we saw a gap in the market of all these different accelerators and what they were doing for anybody that was building for the national interest. YC has historically been a lot of consumer apps. Now they're doing agent and they're starting to dabble in defense tech, but they don't really have the network of opportunities that we do within Harpoon. They don't have the subject matter expertise and know how to navigate the market. And we had so many founders that were just like, Hey,

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Why isn't there a YC form for defense tech? Right. And that's kind of where it was started. Black Flag has evolved much beyond just defense tech, where you're looking at energy, you're looking at AI infrared, you're looking at AI in general, because anything that is not only just for economic prosperity, but also for the national interest is squarely in the investment thesis of Black Flag. So we've created a six week curriculum. Each week has its own topical theme. It's all virtual because we want to make sure that we're adding value to the founders. We're not distracting from the things that they're building. And then we partnered with them.

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most amazing companies on the planet too. We got partnerships with Microsoft for startups, with Google, with Anthropic, with Palantir, with XAI, and like the list goes on and on. I think we're at 22 partners total. Over a million dollars in credits. Yeah, exactly. like into the, you know, so we do an average check size of 250k to a million, but we also have over a million dollars in free credits for our founders, right? We want to just continue to add as much value as we possibly can, not just on the government side, but also with the partnerships that we have.

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Mat Vogels (04:06)

And feels like it's growing every week.

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Love that. That was a great summary. We'll talk more about some of the details in Black Flag as we go. But the first part of this interview is a little bit more about you. You mentioned spending some time in the Navy, going to Stanford and all these pieces. But what was maybe the decision that you made? You talked a little bit about getting that bug. What was the decision on, I want to be a VC. Instead of maybe going and starting a company where a lot of founders who get the bug go start a company, you chose to jump onto the VC side.

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Andrew Couillard (04:26)

Yeah, yeah.

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Yeah. ⁓

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Yeah.

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Mat Vogels (04:47)

any particular reason or what was the leading cause to that decision.

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Andrew Couillard (04:51)

You know, it's funny when I was, I was looking back at journals. I've been trying to be better reflecting. And when I was a ROTC midshipman, I was 19 years old. I wrote in there, I want to be a VC by 40. I don't know why, but I had that nested in my brain somewhere since I was 19 years old. And I think where it manifested was once I actually got to see the early stage development of a company and be in it, you realize that when you're a founder or you're building these companies, you're in that you're in depth, right? You are going so deep on a very specific problem. You get obsessed with the customer problem set. You get obsessed with the solution.

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solution.

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Whereas VC is more about breadth. And I learned over time, just for my personality type, maybe it's a slight ADD tendency, but I love the high breadth of what you have in venture. I love going from calls where you're working with the founder who's working on some new protein synthesis technology, and then you immediately shift over to low cost munitions for counter drones. Right. And for me, I just love the high engagement and the intellectual curiosity of doing so many different things and helping these companies along the way, rather than just going really, really deep in an area. So I think first you got to ask yourself the question, do you want to be in

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wide and an inch deep or do want to be an inch wide and a mile deep? I mean and you've been both too Matt like for you right like you've now been founder turned VC right which is historically how you get into venture right like for you what was it?

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Mat Vogels (05:54)

That's a great way to look at it. I think it's absolutely true. Yeah, yeah.

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Yep.

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mean, exactly that. I think I realized that I was not a good enough founder because of the fact that I never found that thing that I could go a mile deep on. And, you know, I, tried to, you know, I found ideas and did it, but I realized I'm not the founder to do that, which is why it's so exciting when we get to talk to people that have found that inch that they can go a mile deep on. It's, one of the, I think most magical things. And one of the things we get to do, actually goes into one of the next questions here where what is one of the,

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Andrew Couillard (06:11)

Yeah. Yeah.

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yeah.

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Mat Vogels (06:31)

best parts about being a VC, you kind of hinted on it in working with some of these founders. Are there any other parts that you want to want to highlight there? And then kind of the back end of that question is, what is your least favorite part about being a VC?

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Andrew Couillard (06:44)

I'll serve the best. So I think the best part is you're working with the best people on the planet that have the audacity to change the world. And it is so infectious when you meet these founders that truly have this like charted path and they say, I'm going to do this, you know, come hell or high water. And they're so convicted in that and you get excited and passionate with them. Right. And for me, I think on the VC side, like at end of the day, venture capital exists to give money to founders that otherwise couldn't get money from other vehicles. Right. Like you can't go to a bank and sell them on a

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Mat Vogels (06:53)

It is.

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Andrew Couillard (07:13)

vision and get a $15 million loan. Like nobody's going to underwrite that from a debt perspective. So at the end of the day, venture capitalists take money from a variety of different investors, a lot of impensions, funds, endowments, high net worths, or even multifamily offices, single family offices repackage that money and then convince the best founders in the world to take our money in the form of equity. Right. But these founders otherwise couldn't get money in any other way. like in that sense, venture capital is beautiful. I think that's why we have such an innovative ecosystem in United States, why a lot of the innovation is concentrated here.

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But the downside to venture capital

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is I think it's just too crowded, right? You look at the number of VCs from 1990 till now, we're now in the thousands, right? When the cost of capital went down to basically near zero, you saw a spawn of all these different VC firms throughout the Valley. And it's such a competitive market on the VC side. It's the best time in the world to be raising money as a founder because there's so much money chasing so few good ideas. And the downside to that end of it is like, VC is so transactional sometimes.

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You're always looking for the next deal. You're always looking for the next thing. You meet so many different companies that it's impossible to go really deep with a founder because you're so focused on all these different things at once. So I think the transactional nature of the VC ecosystem and then like VCs are sharks. There's this weird like it's a co-op-etition and all these VCs are always talking to you. I found I build better relationships with the founders that I think are meaningful and I can trust them. VC to VC, it's really tough.

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Mat Vogels (08:26)

So true. ⁓

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Andrew Couillard (08:38)

Right. Because like it's just competition. You try to be nice and then you'll totally undercut each other for certain deals. Right. So that in that sense like there is a bit of a shark environment when it comes to VC to VC.

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Mat Vogels (08:48)

Yeah, the scarcity environment for sure. And it's kind of, it's kind of the, the benefit that you mentioned earlier, being able to go, you know, a mile wide and an inch deep, it becomes an issue as a VC because then you feel like everything has to be transactional just for you to keep going. can never in the deep as far as deep into business, but also deep in some of the relationships with some of these founders where you might be the most important person they meet.

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Andrew Couillard (09:01)

Yeah. Right.

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Yeah.

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Mat Vogels (09:12)

all week, all year, who knows, depending on how far they are in the fundraising process. And not that we don't care about that. We very do, and we have a huge respect for the founders doing this, but just the nature of our job doesn't allow us to go as deep as we would like to in many ways. Exactly right.

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Andrew Couillard (09:24)

Yeah. No, because you got 30 of those calls, right? Like you may be the most important call for them, right? And I,

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I, I take that seriously, but it's just the fact that you've got so much volume of information, right? And even now in this AI world, like I almost feel like we're getting more applications than ever. And it's so hard to sift through this, like to figure the signal through the noise.

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It's so easy to form a company and that's an amazing thing. It's so easy to form a pitch deck. You can just do it in cloud coworker right now. So the application volume is going up for everybody, not even just black flag, but YC and all these other incubation and accelerator programs.

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Mat Vogels (09:58)

I love it. You mentioned some of the areas maybe that you're excited about as far as investing from the Black Flag side. Any personal areas, problem sets or things? This is obviously one of those questions that kind of changes every week, I feel like. But right now as we're recording this, are there any particular problems or sectors that are really exciting for you right now?

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Andrew Couillard (10:19)

I think everybody is chasing this AI bubble, this AI hype, this AI narrative. I think what is so exciting for me is to figure out where is AI going to be applied. And AGI, I don't know what it's going to be. We keep redefining what that definition is, and I think we'll just keep redefining that frontier. But what's more interesting to me is like in what industries can you actually create a vertical ASI, artificial specialized intelligence, in a dominant and just own that entire market. So for me, it's like, kind of applied AI problems are out there? Robotics is another huge one, right?

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We still haven't figured out perception data. Dexterity is not very good on robots. So how can we create some form of like an AI, VLM, or even JEPA based AI architecture for something like that? Biology. I am probably the most bullish on bio that I've ever been. I think AI has enormous applications for bio in a lot of ways, not just like clinical drug trial, but just simulating different clinical trial treatments, protein synthesis, drug discovery, peptides.

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There's a whole host of things that I think can be improved from a bio side, not even just with therapeutics and treatments, but just longevity, right? This idea that like they call it the biological escape velocity for every year we live. How many years of meaningful life are we actually adding? Like healthy years, not wheels decrepit in a wheelchair. I think it's at about 0.6, 0.7 right now, but it's getting higher, right? That's pretty crazy to think about.

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And then just like what are industries exist right now that I can be applied to, right? Like, can you take a plumbing business and basically automate a lot of their scheduling or outreach, their customer acquisition through AI tools or something of that nature? So I'm really excited to see like how they apply it, not just like, hey, what's the next agent hype app or what's the next like AI basically wrapper? Right? Yeah, for me, I think that's like the most exciting area right now.

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Mat Vogels (11:58)

Yeah, I love it. are all good. think that we're in this new wave of AI and it's hard to get lost in the noise, but I agree with you that the industries that are created, some of the hard problems that historically have maybe been too hard now have a chance and if anything, maybe have a lot of opportunities. So I'm very excited about that. Last question in this section. It's kind of a, it's a way for you to maybe pump your chest a little bit and talk a little bit about why.

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Should somebody pick black flag? There's so many investors out there. You mentioned it. It's overcrowded. Why should somebody in the early stage pick black flag is maybe a program to go to, or maybe harpoon is an investment to take from, pitch a little bit on what makes black flag different. Why founders should pick black flag.

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Andrew Couillard (12:41)

think what makes us so unbelievably unique is just our heritage and this culture of being the SEAL team of venture capital. And Larsen Jensen, our general partner and founder, really instills this level of discipline. It's just this attitude within our culture. So we go above and beyond to help our founders in every way. We know that we're always in the underdog story. We're not a big Goliath firm. We don't have the branding and recognition as other firms. So we will go far and above other venture capital firms in order to provide value for our companies. Because we're also a startup at the end of the day. We're a young firm.

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We're incredibly talented people, so we want to go above and beyond in the way that we help our founders. So it's not even just if your company is tangentially building for government. If you want to have VCs that are in the trenches with you and just getting scrappy, that's why you go to Black Flag or Harpoon. And I would say ask any of our founders. We're happy to give you references, and I think they can all attest to that as well.

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Mat Vogels (13:29)

Yeah.

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Yep, absolutely. It's exciting. I think all of us because we all have a little bit of that operating itch. We love rolling up our sleeves and diving in because we wish it is. It truly, truly is. So yeah, we absolutely love doing that. All right. Going into the fundraising process now, we break it up into three parts. If this is your first episode listening here, we go from getting into the room. How do you create the right pitch deck and send it to the right people to get the first meeting that's getting into the room to

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Andrew Couillard (13:40)

100%. That's the best part of the job, yeah.

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Yeah.

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Mat Vogels (14:02)

How do you crush that initial meeting? How do you actually convince an investor to continue with the process? Not just give you money, but just continue with the process. So many meetings will be one and done. How do you make that meeting stand out so that you can continue with the process? And then three, last part, it's a little bit of ups and downs. It's hurting cats. How do you actually push the process over the finish line and close the round? So we're gonna go through each of those, starting with the getting in the room.

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One of the things that we see with founders all the time, we see it through a black flag with our investor list. see it on vccheats.com. Founders like the idea of researching and building up a CRM of venture funds that they want to start reaching out to. Typically that list is a little too small, but what are some of the things that you would recommend founders as they're creating that list? What are the characteristics or features of the funds or investors they're looking at that they need to index on before they start reaching out?

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Andrew Couillard (14:47)

Yeah.

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Yeah, it's a great question. And I'm going to plagiarize something I learned from a founder at Stardex when I went through the Stardex accelerator program is the most brilliant fundraising strategy I've ever heard. So first, you have to figure out whatever product or problem you're solving or product, which firms would even be interested. It's a lot. It's easy to do that with AI tools nowadays. You can say, here's my company. Here's what I'm doing. Who's interested, right? And it develops a list. And then what I would do is before you even start formally fundraising, before you do a deck, start building relationships. People will always invest at the earliest stages because of a

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into human relationship and they have high conviction as you as a person. So what you do is you go through and you create your list. Maybe it's 20 firms, right? And you start having coffee chats or you get introduced to a friend. The best way to do it warm intros, right? So Matt, if you're connected to somebody over a conviction, I am going to ask you, Hey, can you do a warm intro to Sarah grow over a conviction or something like that?

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Then you start having these coffee chats and you have a great relationship. You wow them with who you are as a person. Go through this problem that you're trying to tackle. And at the end of these coffee chats, you always ask one question. It's, Hey, I'm not raising right now, but when I do, do you want me to call you? And then you base the level of yes on that question. There's a yes. Fuck. Yes. No, actually you need to start today. You need to incorporate. I'm about to wire you $5 million. That's a 70%. Okay.

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Mat Vogels (16:14)

Haha.

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Andrew Couillard (16:14)

So

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you say, all right, this firm average check size, two and a half million times point seven. Right. And you do that for every single firm. So if there's like a yes, I want to get you in front of my general partner, blah, blah, blah. That's like a 50. Right. Yes. I want to show us the team. I'd love to share materials. You have a data room. That's like a 30 percent. And a lot of this is a bit subjective. But the point is you go through and you find the average check size of these firms, which is public information. You multiply it by that percentage and then you go down the list. And whenever you get to three hundred percent of your target fundraise,

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Mat Vogels (16:30)

You

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Andrew Couillard (16:43)

So if you're trying to raise five and all those numbers, when you multiply the average check size by the percentage, add them all up is 300%. Then you start the fundraise and then you go down to your high conviction list. That 70 % you call them and say, Hey, remember that talk we had two months ago? I'm raising, are you in? And it's a quick, yep. Let's turn this around quick. Just send me some materials. I'll get this to IC tomorrow. Right. It can happen that fast. And this specific founder raised from multiple tier ones, never sent a single pitch deck. Probably one of the most successful fundraisers I've ever seen.

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Mat Vogels (16:52)

Hmm

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Andrew Couillard (17:12)

So that's one tactic. But the whole point being is that at the end of the day, when you're fundraising at the earliest stages, pre seed or seed, you don't have a product. You don't have revenue. You think you might have an MVP, but it is going to change eventually. People are making investments in people. So how do you build those human relationships, nurture those relationships and get it to a high conviction point? We have multiple options because that's how you create the sense of urgency and scarcity, which we'll get into here in a little bit.

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Mat Vogels (17:36)

Yeah. You mentioned warm intros and you know, reaching out to some of these folks. There's kind of the two avenues. You find an intro, you get the intro there, or you reach out cold maybe in some cases, but ultimately what is, what is a tactic that some of these people could use? How do you get somebody like a VC who's very busy, like we mentioned earlier, to take the time to go meet if you are maybe not fundraising yet, but you're kind of interested, like where do you walk the line in convincing the

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Andrew Couillard (17:38)

Yes.

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Yeah.

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Mat Vogels (18:02)

to meet you if maybe you don't have anything to sell right away. Cause I agree. It's a good tactic. VCs are oftentimes meeting with founders. In fact, one of the quotes that comes to mind, Larsen says this, and I love it is, you know, when you want money, you ask for feedback. When you want feedback, you ask for money and you're kind of playing that game right there. So it's like, you're not really asking for money, but you're not really quite asking for feedback either, or are you? So what, what does that like intro email or like request look like?

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Andrew Couillard (18:06)

Yeah.

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100%. Yep.

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Increase the surface area of opportunity to meet people in person full stop and what you want to do is as you go to founder happy or happy hours and chats go to pitch events go to Networking meetups up here in the Bay Area just increase that surface area of opportunity where you're meeting exceptional people and you'll you'll find over time like you'll be Talking about what you're thinking of doing and someone will say I know somebody over here. It's like that's great Would you be willing to do a warm intro? I'd love to talk to them about that, right?

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Mat Vogels (18:31)

Mm-hmm. it's so good.

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Andrew Couillard (18:54)

I think that's one tactical way to do it. The cold outreach is just a hard game, especially with agents. Nowadays, you can just have a high volume cold outreach. I never answered any of them. I know you don't either. So it's really hard to stick out from like a virtual, you know, cold outreach. So you're increasing your service area of opportunity with just human engagement. And that is just going to events, going to meetups, going to every single happy hour to the point that it's exhausting and nauseating. Right. The other part too is be really intentional about your friends and the network of your friends that you have.

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Right? Like I'm a huge believer in this idea of strong ties and weak ties, strong ties of those close friends, family relationships, people that you can go to for everything. And then there's weak ties, which are people that know you well enough that they'd vouch for you, but that are also had this amazing network of people. So if you're seriously considering starting a company, start mapping up those weak ties and who they're connected to. I think one of the most powerful ways to do it is what I call the activation. So really close friend of mine at GSB will keep it confidential.

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just raised an unbelievably strong round, as a student because he had this activation system. So what he did was he went through all of his different target portfolio or target venture capital firms. He then marked who was the closest to that. And then he had that person activate the person within the venture capital firm. And it goes something like this. So Matt will reach out to me, Andrew, because he has a friend that's raising money and Matt, you send me a text and you say, Hey man, there's this really hot company.

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They're building at the frontier of AI and protein synthesis. It's going really fast. You should talk to these guys. I will always take that call. Always. I don't need a pitch deck. I don't even need a cold. I like I don't even need a description of the company. You say that I trust it. Right. That activation network can also be powerful. So increase the surface of opportunity map your own network and figure out how you can activate these different bases.

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Mat Vogels (20:33)

Yeah. And one of the things that we've, I've heard a lot on this is same exact thing is how do you actually expand your network ahead of time? A lot of times founders wait until they're like needing to raise capital right away where the fundraising process almost starts months before. Um, so even if you're listening to this and you're kind of thinking about it, yeah, or even years before you're exactly right. It's like, if you are even thinking about maybe starting a company, you might as well start building that service area right now and it'll pay dividends later.

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Andrew Couillard (20:40)

Yeah.

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No, it's the worst time to do it, yeah.

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Or a year before. A year. Yeah. Yeah.

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Yeah. Let's be honest. Like early stage venture is the hot girl thing, right? It's all about how do you be the hot girl school? There's no art. It's more of an art than the science, but you want to make yourself desirable, right? There's urgency, there's scarcity. So how do you create urgency? You have a lot of people interested in you. You accelerate timelines. say, Hey, I'm trying to decide by next Friday. I've got a lot of interest. Are you in or out? That will then increase. They like, wait, this is scarce. This is urgent. And there's some clear value proposition here because other people are interested.

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Mat Vogels (21:05)

Yeah. ⁓

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Yes.

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Andrew Couillard (21:27)

What makes a hot girl hot at the school dance in high school? It's like all the other guys are looking at the hot girl. So how do you have that allure and that attractiveness that everybody else is all of a sudden interested because everybody else is as well? Because I'll be honest, most VCs are just lemons. They're just chasing around all the other firms that are interested in something and because more people are interested, they're not interested. Same dynamics in a high school dance. It's sad to say, but like, so you have to figure out ways in which you can create that artificial sense of urgency, scarcity and value proposition.

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Mat Vogels (21:41)

Yeah

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And the reason why is kind of playing off a little bit earlier. We mentioned VCs are a mile or sorry, a mile wide and an inch deep. And the reason that that is, you know, we're, scattered. So we have to rely heavily on other people that we know and trust leaping and making decisions. Um, it, pulls a lot of weight. I think, you know, being a founder, I remember a lot of founders listening to this founders hate is not the right word. Dislike VCs strongly is maybe the better word. Um,

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Andrew Couillard (22:06)

Yeah.

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Totally.

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Mat Vogels (22:24)

We're a necessity in a lot of ways. Founders don't appreciate that. A lot of VCs are easy to work with and feel rude, all these things. And a lot of it is around conviction where it's like, ⁓ yeah, last week you said you weren't interested. Now that a tier one is interested, now you're interested? It creates this relationship. So this is more for founders listening to understand it's not personal, but a lot of times we have to operate off of these relationships and conviction of other people that we know and trust.

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Andrew Couillard (22:33)

Yeah.

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For sure.

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It's not.

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Mat Vogels (22:51)

even though it seems like maybe that's unfair, that's just the name of the game.

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Andrew Couillard (22:54)

Yeah, because you have 30 other deals you're looking at and you're trying to make quick decisions and you can't possibly be an expert in every industry. And it's so hard to tell at the earliest stages. So you're taking high conviction bets on people. And if other high signal firms are interested, that's usually a good indicator that there's something special about this person. You should take it seriously. So you're right. It's not personal. It sucks. It's just the name of the game.

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Mat Vogels (23:14)

Yeah, exactly. All right. Let's talk a little bit about the pitch deck. We had a lot of questions submitted in this process on the pitch deck itself. The pitch deck is, know, in some cases it's everything that you could send to a VC to get that first impression, all these things. Even if you have a warm introduction, sometimes getting that pitch deck allows us to get full context before meeting. Do you have a slide, a stat, something that you, when you get, we get a lot of pitch decks. We got hundreds maybe per month.

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Andrew Couillard (23:17)

Yeah.

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Definitely.

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Mat Vogels (23:42)

Is there a slide that you go to right away that you look at that maybe holds more weight than any of the others?

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Andrew Couillard (23:48)

Like if I could only look at one slide and try to make a decision. And again, I think what people, let me take a step back. When you submit a pitch deck to an accelerator like black flag, and it's a virtual submission, meaning you are not pitching it. The deck that you read should be different than the deck that you pitch on a zoom call. Right. And I really want to emphasize that because the goal of that pitch deck through the submission pages to get the first call. That's it. How are you interesting enough? How are you compelling enough that you will get an intro call? That's your goal. You're not, your goal is not to raise money.

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It is how do get the first call? So when you think in that logic, at the end of the day, I think the average recruiter spent seven seconds on a resume. Think about your whole life truncated on one page and they spent seven seconds. VCs probably spent a little more than that, if I'm being honest. And then a lot of the reason they make the decision is like, is this a really competitive or compelling team? Is there a clear founder market fit because we're pre-seed seed? We don't have a product. We don't have revenue to base it off. Is there clear alignment with who the person is or the team is and what they're trying to solve?

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So for me, it's that team page always. And it's the one that I don't think people put enough emphasis on. And it's the name. It's what you've done. Maybe it's a couple like Boy Scout logo badges of cool, you know, programs like Stanford you've been to, but at the end of the day, what you need to get through in a glance review is this is such a compelling human being that has the audacity to create a unicorn company. And it's worth my time, right? Like that is selfishly what you should be thinking. And what I would do is test it with your friends, send the pitch deck to your friends.

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Have them look at that page and be like, what did you get out of it? Like in two sentences, tell me what this told you because you want to get the really compelling parts of who you are as a person to be interesting enough for that first call. But that's the one I would say is under emphasized. I've seen pitch decks without a team slide. Rare for me to want to take the call. Honestly, if I don't even know who you are, if you're not compelling enough, then where is this going to go? You can have a great idea. It doesn't matter. Right. So that's one I think that deserves a lot more love than founders give a credit.

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Mat Vogels (25:38)

What is a big mistake

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that you see founders make on that team slide? So not including it, obviously, maybe not packing it with the right information. Any other mistakes that you see founders make on the team slide?

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Andrew Couillard (25:47)

Yeah, I mean, I would say being too humble or being too reserved about what you want to take credit for, like take credit for all the amazing things that you've done in your life. And it doesn't even have to be just professional. I've taken calls because you see a founder as a Michelin star chef and now they're building a deep tech company. But like, that's interesting. Or I ran a hundred mile race in Antarctica. That's cool too. Like if you can just be an exceptional human being in other verticals of life.

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you're probably going to be a good founder as well. Right. Like they'd be able to do the context switching. Bill Gurley just did a pod with all my first million and was talking a lot about this, that a lot of the most successful founders are incredibly gifted at other areas like languages, music, art, things of that nature. So like try to figure out a way to get beyond just the professional accomplishments that you have, but like who you are as a person in that team slide as well. And I think a lot of mistakes founders make is it's just like picture CEO.

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Mat Vogels (26:29)

Yeah.

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Andrew Couillard (26:41)

And then just like a couple sentences of like this person went to this school and they did this, but there's no like action result. There's no, what did you do while you were there? Right? Sometimes it's a standalone. Like if you're an Olympian, it's pretty clear that like there's an action result there. But if you were like, had a job at a company and you worked in go to market, like, okay, cool. What did you do and go to markets? Like, well, I actually like increased our revenue by 400 % within a year. That's compelling. Okay. So like find a way to articulate that within the slide that you have.

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Mat Vogels (27:08)

The other question that you, or thing you mentioned earlier is the founder market fit piece. Is that something that you could see on this slide too, or is that a whole other slide to kind of talk about, you know, the why us, why are we doing this? Should that be on the team slide or should that be on a different slide?

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Andrew Couillard (27:23)

It depends on the story. I don't think there's a one size fits all. I think it's compelling enough. Let's say you're building a deep tech manufacturing company and you increased efficiency on the Tesla, you know, manufacturing production line for by 300 % your direct report was Elon. You should probably put that in your team slide, right? And like some shape or form. Now, if there's a bit of a weird story arc to it, like you may not have a manufacturing background, but you're building a manufacturing company that might deserve its own, like why us slide.

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because I will also say to this idea of like disruptive innovation and the Clayton Christensen theory, sometimes it takes an outsider of industry to actually have a distorted asymmetric value for a specific vertical. I'll give you one example. Palmer Lucky had absolutely no business being in defense tech, right? He was a former like gaming nerd turned Oculus. Then when it exited the meta, he was a metaphor a bit before he went off to start and roll. And at the time he had zero federal BD experience. Any military guy like me would have laughed him out of the room.

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Cause like, what's this like, you know, Hawaiian shirt flip-flop guy know anything about the fence. Well, it actually takes an outsider that's incredibly brilliant and gifted to look at an industry and say, wow, this is all screwed up. need to innovate in these different ways. And he built the most arguably the most successful venture backed, you know, defense tech company outside of Palantir right now. And he was a complete outsider. So if anybody would have looked at founder market fit, they would have looked at him and said like, this isn't going to work. But that's where, how do you,

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articulate the fact that there is this historical record of excellence through your life. have just insatiable curiosity and you are someone that people want to follow. You have this magnetic aura about you, whatever that is. So it doesn't necessarily like founder market fit doesn't mean that you have to have experience in the industry you're building in. Does that make sense? Yeah. It's kind of a riff, but yeah.

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Mat Vogels (29:03)

Yeah, it makes perfect sense.

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No, mean, like what you're kind of saying is, you know, if the distance between what you're doing now and your history or your work history is further apart, it might make more sense to explain why. If it's right away, like if you were, you know, leading engineer at Tesla and you're now working on something and batteries, it's like, well, okay, we can kind of see the connection there.

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Andrew Couillard (29:11)

Yeah. Yep.

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Yes.

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Easy to draw a line.

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Exactly.

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Mat Vogels (29:23)

Yep.

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in some of it, you're exactly right. We've seen founders all the time where they're highly exceptional and something that they've been doing for many years. And then now it seems like they're taking a complete different turn that you're like, wait a second. But then they have a really compelling story behind it. And honestly, those are some of the companies that I love the most because they have a little bit of like they're exceptionally talented. They have a great way of thinking about something, but they're applying it.

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Andrew Couillard (29:38)

Exactly.

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Same. Yeah.

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Mat Vogels (29:47)

to a whole new industry that maybe hasn't had this type of thinking ever. And then when you can tie a personal story to that even better, I think it's a great combo.

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Andrew Couillard (29:57)

100%.

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And again, it's hard to articulate that in a slide and sometimes you need that 30 minute phone call, but how do you get the intro call? How are you compelling and interesting enough that it's worth someone's time to take a 30 minute call out of their day? Right. And I think that should be the goal is people structure these decks. And then beyond that, you're like, yes, you got to stick and land the interview.

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Mat Vogels (30:00)

⁓ yeah.

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Yeah. And that's, yeah. It's, and that's why we,

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yes. And that's why we kind of split up the conversation in this way, where the very first part is how do you get in the room before we jump into the crushing the initial meeting? Are there any mistakes or things that you want to highlight about getting into the room? Any mistakes you see founders make? Is there a wrong way that you see founders more commonly nowadays trying to get in the room, get that first meeting?

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Andrew Couillard (30:34)

Yeah, I think there's a, there's a fine line between persistence and desperation and it is very subjective. And if you're constantly blowing up a VC asking for followups nearly every day on your application, it looks desperate. Right. now there is a persistence, right? Like I have met founders that have been incredibly persistent in an artful way and they're constantly adding value or adding things. So if you're doing a followup email, don't just say, I'm following up on my application. Like, can you give me some feedback?

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Hey, I haven't heard from you. Like I want to put this about top your inbox. Those are the worst follow up cold outreach I've ever seen. What's so interesting and compelling is when you're persistent and you're actually adding value to every time you do a follow up. So you say, Hey, you know, I'm doing this thing. You know, I would love to talk to you and engage, you know, blah, blah, blah, blah, blah. No response. Since we've last spoke, I just got, you know, a million dollars in contractual revenue with this customer. We're launching a pilot program. We'd love to talk to you about it.

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still no response. Okay. Next time. What are you going to do to up level that one? Right. And just have something of interest of value every time you're doing a follow-up. Whereas if you submit a black flag application and you're just blowing up the, the contact us email, just asking for feedback, it's a really negative signal. And I think founder sometimes again, persistence and desperation. Don't be in the desperate book.

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Mat Vogels (31:51)

And it's fine line to walk sometimes. So, but, but I agree. Yeah. It's desperate times too. So sometimes it's a, feels like you have to, but all right. So let's say that they've, listen to this advice. They've made warm introductions. They've built up their network. They have these initial meetings that are now scheduled. Let's get into the initial meeting part because it is such an important part of the process. That very first call. Let's flip the tables a little bit more from your side. What are the things that you look for as a VC?

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Andrew Couillard (31:53)

It is a fine line, yeah.

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Mat Vogels (32:19)

Let's call it for Black Flag specifically on this one. What are you looking for with the founders that you are meeting in those initial interviews? What do they need to tell you, impress you with for those 30 minutes?

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Andrew Couillard (32:32)

Yeah, I think there's a lot that we try to unpack in just 30 minutes. And again, that's the goal of that call. When you pass the application, you get the intro call is for the follow on call with other investors. So that's your target. Everything you do in that call on that 30 minute chunk should be targeted. How do I get the next call? Not how do I land a $5 million trick today? It's like, do do to get the next call? Unless yeah, they're not, they're not, unless it's like,

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Mat Vogels (32:53)

No one's writing a check on that call. It's very, I mean, it's, it's exceedingly rare. Yeah.

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Andrew Couillard (32:57)

That's the last day you're about to close the round like there's rare cases maybe but at the end of the day you're looking for that next call. So how are you compelling and interesting enough that someone in a venture capital firm wants to get their bosses involved put their own reputational capital online to have a call with you. Right. Because if you're a dud and you bring as you and as a lower level investor bring it to the upper level investors then that's a knock on you almost as a person. Why did you bring this to my attention as a waste of time. Right.

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Mat Vogels (32:59)

Yeah. Yeah.

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Andrew Couillard (33:22)

So how are you compelling and interesting enough at the problem you're solving? And there's a lot of ways to do it. Sometimes it's very unique insight that you have within a problem set because of how long you've been working on it, the area you, your industry you come from that is compelling enough to build a company around. Sometimes it is just basically creating this aura about you. like, do you have a sensational curiosity and a strong conviction in a very specific area? Me as an investor, one of my litmus test is, do I want to go work for someone like this?

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Right? Like I'm constantly thinking that and there's a lot of ways you can articulate that. It's how you carry yourself, how you present yourself, how you captivate an audience. And at the end of the day, you're just telling a story. This is all storytelling. All the pitch is supposed to do is to create a bunch of slides so you can help tell a compelling story. So similar to a campfire, how do you drive everybody in the campfire around this really compelling story? And there's so many ways to do it. I can't give you a script for it, but at the end of the day, it's like, how do you captivate an audience with that pitch? And it could be

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the Genesis and the story of it, right? Like I probably heard one of the best pitches I've heard in a long time. They spent 15 minutes talking about how the co-founders met. And it was this beautiful story of these Israeli 8200, how they went to cyber academy together, how they lived in the same bunk bed. They all went off to different places to gain the skills and experience to build this company. That first 15 minutes was such a powerful story. It's like, okay, I don't even care what they're building, but this team is exceptional.

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Mat Vogels (34:21)

you

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Mm-hmm.

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Andrew Couillard (34:44)

It's not only just high caliber, high talented people, but the story behind it is incredible. I've also had people that have uncovered this unbelievable insight in an industry because of the previous job that they had. And they'll spend literally 12 to 15 minutes just talking about that. Now they're not going through like the, here, follow these like, you know, 12 step process for a pitch deck. It's whatever's compelling enough in your story that makes people interested, engaged and want to follow you. And these are types of the things like, would just ask your friends, like do practice pitch rehearsals.

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Mat Vogels (35:14)

Yeah.

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Andrew Couillard (35:14)

Right. And when you, when you do

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it with people is like, what was exciting about that? What sucked about that? What do you remember from the last 20 minutes of jargon? just threw at you. Um, and I think the best pitch has turned into more of a conversation than a, than a monologue. Right. I think it's a, it's usually a negative indicator unless you get like, wow, an investment team. If you go on a 20 minute long monologue and there's no questions, no interaction, like that's usually not a good sign either. Right. So like ask periodically, like, does this all make sense to you? Like, are you seeing where this problem is? Like, and if it's more of a conversation, a dialogue,

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you're then bought in and drawn to this relationship.

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Mat Vogels (35:44)

Yep. Yeah, the one of the mistakes that we see often, I'm actually kind of curious, actually, let me flip it on you first. What are some of the mistakes that you see before I start throwing them in there that founders make during that initial pitch meeting?

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Andrew Couillard (35:51)

Yeah.

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I think a lot of founders try to make it too statistically dense. Stats should add to your story. They shouldn't be the basis of your story. If you were describing a problem in numbers and things that you can get on perplexity or Claude, it's really uncompelling, right? If you just throwing a bunch of numbers in the air, it's like, okay, how does this all stay together? Where's the story here? And I think a lot of founders, you know, they missed the forest or the trees and they don't look and zoom out at like the holistic big picture of like, what's the story? What's the narrative? Because when a

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when a VC is investing in a founder at the earliest stages, at the stage we look at pre-seed and seed, we are looking for venture backable outcomes and power law distribution. So we are looking at things that can 100 to 500 X. And in order to do that, you need to be solving a really critical pain point that potentially could have exponential organic growth because the customer is desperate for your product. So you have to find someone to tell that story. And sometimes it's just having the most amazing, compelling team that can tackle an area and do it better than anybody. That could be enough.

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Right. Sometimes it's having a unique insight on the problem. But again, a lot of founders just get so wrapped in these statistical numbers to try to justify it that they kind of lose the story altogether. And by the end of the call, it's like, I don't even know why they're starting this company. Right.

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Mat Vogels (37:09)

Yeah, they can get it's easy. I think especially in the areas we invest in. is maybe a message for all these technical founders out there to get so lost in the weeds of how technically you're doing something, which is amazing. And we care about it. This is maybe another little secret. A lot of VCs were not as smart as we may like appear to be. So if you go down a rabbit hole, I know. ⁓

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Andrew Couillard (37:15)

Yeah.

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No, we're all Neanderthals, man. We're running around chewing rocks and like, mouth breathing around

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each other. Yeah. ⁓

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Mat Vogels (37:31)

Like we're impressed, we're meeting with you. You don't have

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to look as smart as you might with some of your peers. So you meet with other founders and you have to really showcase why what you're building is so important. And like technically like the Marvel that you've built and all these, we care about those things, but it is easy in those meetings to spend 25 minutes all of a sudden going so deep where it would take us another hour to unpack exactly. Now we're more lost than ever.

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That's a mistake I think that founders oftentimes get into, especially on the hard tech side.

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Andrew Couillard (38:02)

Especially the version of the future. You believe I think what's harder than ever is to build a technical moat only because AI is accelerating innovation and so many different verticals, software and hardware. So if you're just, if your only compelling point is a unique technical moat you have now, it might not be there in five to 10 years because VCs are investing for the 10 year. And the reason we need that compelling story and a high conviction founder that can have these people that want to work for them is because at the end of the day, founders are building to a vision.

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Mat Vogels (38:04)

Hmm.

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Andrew Couillard (38:28)

and they're building a company and they want to attract the best people in the world to build on that vision. So if you don't have that aura about you to do that, and it's only deep technical, you're probably not going to be a great founder CEO. You might be a brilliant technologist, right? But it's hard to have that compelling story of like, why are you going to build a generational company?

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Mat Vogels (38:43)

Yeah. We hit on some maybe things that are not optimal, not great to do in that call, but are there any specific red flags that you see, like things that founders will do that you kind of end up just like, yeah, the meeting's already over before it ends type of thing.

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Andrew Couillard (38:58)

hmm. Yeah, I'm trying to think of like how to shoot yourself in the foot, right? during a call, I think, ⁓

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Mat Vogels (39:05)

But even more like character

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trait, like are there character traits that you see too from founders in those initial meetings that maybe put VCs off?

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Andrew Couillard (39:12)

Another one, again, it's a fine line. It's arrogance and confidence, right? And there's, you have to see it enough to really recognize the difference, but you can be incredibly confident and have high conviction and be compelling at the same time that people want to follow you. And you can also be arrogant and a prick. And if you are, people are unlikely to work for you. So we've found times where you can have an unbelievably talented, smart founder.

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Um, but they're just such an arrogant prick that I can't imagine anybody ever wanting to work for them. Um, and I think like not, you know, and I think with founder specifically, it's like, how do you articulate your confidence in a way that's compelling, but not coming off as just arrogant and like, know, everything. Right. And it's okay to say, like, I don't know. Like, I don't know where this market's going to go. I just know that I'm obsessed with this problem. I want to work on this for the next 10 years of my life. And I have the best possible team to execute on this vision. It's a great answer.

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Mat Vogels (40:04)

Yep,

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it is.

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Andrew Couillard (40:05)

Sometimes

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I feel like founders need to feel like they have the answer for everything and they just start digging a hole. And when they start digging that hole and they just start making shit up, they just like keep digging. And yeah, I get it, when you hit rock bottom, you can always start drilling, but it doesn't work well, especially for that first intro call.

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Mat Vogels (40:20)

Yeah, no, definitely. Last kind of maybe question here is what question or things should founders leave with before the call is over? Are there any questions that they should ask? It's an interview process. They're also interviewing us. Are there any questions that you think founders should ask of VCs? Not because as an investor you think like, wow, I'm glad they asked that question. That's a good plus mark, but more that it's important for them to get that information out of the VC too.

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Andrew Couillard (40:33)

Yeah, for sure.

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Yeah.

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100%. It depends on what you want to get out of the conversation. If you're screening a VC that you want to take seriously, ask them for founder references. We are happy to give you founder references of portfolio companies of ours. If a VC isn't, that's usually a very negative signal, right? Especially if they burn some bruises. Not the first call. No, yeah. Good call. Yeah. So maybe for the first meeting, honestly, I think a really good question you should ask VCs is what part of this pitch was most compelling?

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Mat Vogels (41:01)

Would you do that not in the first meeting though, right? We'll probably cover that in the next one. Yeah, yeah, yeah.

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Andrew Couillard (41:13)

or are there any questions that are unsolved that I can answer in the last few minutes? The first question is just tracking, they paying attention? Do they even understand what you're building? And if they don't, they were tuned out the whole time and they're probably not worth your time for a lot of reasons, right? Sometimes you hop on a call as a venture capitalist and you're conflicted out. You have a portfolio company that's building what they're building. You didn't realize it when you scheduled the meeting, but five minutes in, you're like, shit, we can't make this investment. Like I can't even bring this to investment committee because we're conflicted out. So that's a good way to screen that out.

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Right. The second piece is you get an opportunity to answer any glaring concerns that the venture capitalists have. And if a founder asked me that question, I will always say, I'll be like, yeah, you know, I just, I don't understand your go-to-market strategy. Can you walk me through how you plan to do this? And it gives founders an opportunity to maybe address those red flags. So the first one is like your screening VCs, because it's so hard in a zoom environment to see if someone's paying attention or taking notes. Right. And if they are just completely tuned out for that 20 minute

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first monologue and you ask them a simple question, what was most compelling and they can't answer that. You should not be engaging with that venture capitalist. It's not worth their time. But the second piece is get an opportunity at the very end to address any concerns. And the only way you can do that is just by inviting them to say, hey, is there anything in this pitch that is unclear or concerning? Like I'd love the opportunity to answer that now.

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Mat Vogels (42:18)

Great question.

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One of the questions that we had founders asking was, should they schedule the next meeting in that meeting or is it okay to let that meeting lapse and end and then follow up with scheduling times?

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Andrew Couillard (42:43)

Yeah. I think what we try to do, you know, even through black flag is we'll tell you like, we're, know, these are the next steps we're going to review as a team. If we proceed to the next round, we'll try to schedule a call to broader team in a week. If you don't hear that from the venture capitalists, it's a very fair question at the end of the call, just to say, are next steps? You're not asking for the call, but just what are next steps. And I think you can gauge their level of interest by saying, dude, I need to get you in front of everybody. What, what do you have tomorrow?

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I guess a strong signal. like, wow, this is really interesting and compelling enough that I want to get a call. Right. Like we just had a call, like two of our investors at Harpoon had a call last night. They sent a screenshot to our Slack and they're like, this guy's incredible. You know, one of physics, a tournament in Finland, his parents are AI researchers. Like we got to get on the phone with this guy tomorrow and we scheduled a call immediately. So if you're compelling enough, like that can happen and you can always ask the end call, Hey, what are next steps? Right.

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Mat Vogels (43:28)

Yeah, exactly.

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Yep, exactly. All right, so they've let's say they've crushed the initial meeting. We're excited. Maybe other investors are excited. Could you shine a little light on what the diligence process looks like at Black Flag? Like, what do we go from? We like these teams. You mentioned maybe a second meeting and going from there. Any other pieces in the diligence process that founders should be aware of?

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Andrew Couillard (43:37)

Mm-hmm.

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Yeah, for sure. It depends on the company too. So diligence can take many forms depending on the type of company. If you're pre-product, pre-revenue, and you don't even have like an idea of what you're doing, it's hard to diligence your technology, right? So a lot of times it's reference checks. I strongly weight a lot of reference checks. I'll look at who, and sometimes we ask founders, hey, do you have anybody we'd love to talk to? Typically though, they've already pimped their friends. So they'll say, hey, this venture capital is going to reach out to you. You need to tell them a 10 out of 10 glowing review because I need this money.

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Right? So what I like to do is go on LinkedIn and see who they're connected with that I'm connected with. And I'll reach out to them directly and be like, Hey, have you heard of this person? Do you know them? I'd love to talk to you for five to 10 minutes. And I think reference checks go a long way, especially when we're doing diligence for early stage companies. If you have a white paper, if you have a product, you know, technical mode, we'll deep dive it. We use a couple expert networks, especially when we're way out of our depth. Like, I don't know anything about quantum. I've read a lot of books. I'm trying.

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It's a hard physics thing. So I've got to reach out to expert networks because I don't know what's real and what's not right now. If it's something more in the military use case, I've got a lot of friends in the ecosystem. I know the technology very well. I can typically do a better job. Anytime an AI deal comes or AI infra. I asked the smartest AI person I know if this line of thinking is relevant, if this technological approach has some legs to stand on. But again, I think at early stage venture, you're making high conviction bets on people. So how do you

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Mat Vogels (44:48)

It's so hard.

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Andrew Couillard (45:13)

figure out is this person worth betting on? That's a hard question to answer, but a lot of it comes down to references.

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Mat Vogels (45:21)

Yeah, references are great. The problems that I think a lot of founders get into, it's a good problem to have, is gonna be when multiple investors are interested in what they're doing and it kind of heats up quickly, things are moving fast, especially, it's a great problem to have. I'd argue it's more common, I think, than founders think.

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Andrew Couillard (45:22)

Yeah.

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Yeah.

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Yeah.

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Great problem to have. Yeah, it's awesome.

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Mat Vogels (45:40)

because it doesn't mean that you're vastly oversubscribed. Sometimes all it is is just maybe you're one check oversubscribed and you're building momentum. Because what happens is it takes a while to maybe get to the first 30 or 50, but then once you kind of get to 70, 80, or you're kind of at that closing finish line, now all of a sudden you're gonna get a lot of interest. Because we talked about earlier,

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VCs are interested when something feels like it's hot and if things heat up, it can become a real process for these founders. When I was fundraising, it was one of the most like stressful times of my life. It seems like it's a good thing to have, but it was so stressful because then you have to go back. you have to go back and you have to tell founders, you know, or sorry to tell VCs, you know, yes or no, you're almost starting to build your cap table up. So that kind of leads to the question. What is some of the advice that you would give founders that are in this position?

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Andrew Couillard (46:02)

Yes.

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Was it? Yeah. I know, don't envy founders.

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Mat Vogels (46:27)

in picking the right investors for their cap table? What should they be indexing on? And keep in mind, this is their first round of funding, very early. What are some of the things that they should be indexing on, maybe more heavily than they're thinking of today?

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Andrew Couillard (46:40)

First round of funding. think what people often overlook is you should focus on quality, not quantity. I've seen a lot of founders, especially in the Bay area that believe that the more people they get on the cap table, the better. And it's fundamentally not true. Think of it this way. If you're a venture capitalist and you have 70 portfolio companies and you want to spend the most time adding value, you're going to add value to the companies you have the most equity in. It's because the incentives are aligned that way. So if I have a 1 % equity in you as a pre-seed company,

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Mat Vogels (46:53)

It's not true at all.

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Andrew Couillard (47:09)

probably not going to spend a lot of time, not because I don't want to. It's just, there's all these other competing interests in life. So people typically think, I'll get like 10 investors. That'd be great. Cause then have 10 people that are now on my team. Yeah. But it's 10 people that have a very minor stake and they have low equity percentage. Therefore they're probably not incentivized to go above and beyond to help you. So I think a lot of founders should focus more on the quality of investors and it just depends on your company. I think a lot of it is human relationship driven, like pick an investor or firm.

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that you just have a great relationship with. You know that you can trust them. They're going to be on this equity journey with you for 10 years plus. That is a human relationship and you should take that very seriously. I think oftentimes, you know, founders get so aggrandized or lured to like the logos, but if you don't have a great relationship with either those partners, those people, like they're not really going to be that involved in your company. Capital is readily available. The fortunate part of the founder, at least here in 2026 as the time being, it's not hard to raise money.

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make sure you pick the right people because it's the seller's market, right? It's kind of like real estate. There's buyers and sellers market right now is a hundred percent of seller's market for founders. It's great time to raise money, but

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Mat Vogels (48:12)

Yeah, one of the conversations about in the past, they mentioned that this is usually where founders start to get in the mindset of like, I just want to get this over with so I can get back to work. And that is, it can be true, like that is the mindset, but it can be a huge mistake as well.

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Andrew Couillard (48:21)

I get it, yeah.

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It's like selling a house. Sometimes people list a house and they get so stressed out because they have 10 visits and they get three offers and they're like, I just got to pick one. And then they realize a week later, they could have sold it for a lot more. Happens a lot with raising money for founders too. So be patient, be cautious. It is a horribly stressful process. I don't envy it. The founders that go through fundraising, but you also want to make sure you're picking long-term commitments for 10 years. You should take that very seriously. It should not be a 24 hour decision.

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Mat Vogels (48:53)

Do have any thoughts, a common question that we had from founders, do you have any thoughts on tier one VCs in those earliest stages? A lot of founders obviously want to take money from Andreessen and Sequoia. I'm not putting you on the spot to say negatively on those things, because they are great funds. But do you have any advice for founders that are maybe thinking that that's their target? They want to get a tier one on their cap table on that first early stage and maybe why it is or it isn't the right choice?

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Andrew Couillard (49:03)

Yeah.

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Mm-hmm.

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I mean the tier one firms are tier one for a reason. That's why we call them that. They're incredible firms and if you have the opportunity to have them as investors, think founders should absolutely lean in. I will say the only word of caution when it comes to tier one at the earliest stages is if they take a huge chunk of equity, let's say 15 to 20%, they're less incentivized to lead follow on rounds by design. So if you get a Sequoia and a Preseed, congratulations, you are a rock star company and a rock star person.

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But if you then go to raise the series, they're probably not going to raise the series just because they already have the 20 % equity stake. They'll do their pro rata. They'll get other firms within the ecosystem to then lead those rounds, but they're less likely to do so. So oftentimes I've seen founder structure where they go for a gray lock, right? If that's their number one, not because, know, they're better than Sequoia or a 16 Z and their internal, you know, pecking order, but it's because gray lock only does early stage. So if they don't come in the air, the B that's not a negative signal. Whereas sometimes if

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Sequoia is an early investor, but they're not even in the series A other than Pro Rata. Other investors start to think, what's wrong with this is Sequoia is not interested. It may just be they already have their equity target. You don't know that because you're not in the room with Sequoia as they're making these decisions. So sometimes by getting a tier one early, it sets the precedent that if there's not a tier one leading later down the road, that that's a negative signal. That's the only word of caution to have, but honestly, they're tier one for a reason. They have incredible networks. They have some of the best investing professionals in the entire world.

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But I think companies should think about the next raise and the long run. And of all the businesses we've seen fail, think those that fail the most do not have a five-year time horizon. So have a five-year time horizon, your milestones you want to hit and your successive raises. Because if you blow it too early, it's going to be really, really hard to make that up in future rounds.

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Mat Vogels (51:05)

Yeah. Our last question for on the closing of the round side. It's very stressful. It's very easy for founders to make mistakes, but what are some of those mistakes maybe they can look out for in closing the round and building FOMO and getting docs signed, all these things, anything that you would tell founders to keep an eye out for and pitfalls and things that they should look out for.

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Andrew Couillard (51:10)

Mm-hmm.

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Yeah, the mistake is they don't assume that other VCs are talking to each other. We are so incestuous. VCs, like it's the co-op petition, we're all sharks and we'll undercut each other in deals, but we will always talk about active deal flow, whether you like it or not. And I've seen founders say we have a commitment from this firm and they don't. That is the bet. The number one sure way to kill a deal is to say, hey, we've got a verbal offer from General Catalyst. I reach out to my friend. There's no verbal offer. They're not even that IC yet. Okay. All right. You're that type of a person, right?

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Mat Vogels (51:33)

So yeah.

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⁓ All the time. It's very common.

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Andrew Couillard (51:56)

And it's hard because you do want to highlight all the amazing things and, you know, develop this delusions of grandeur almost right for VCs to make them appealing and have this urgency and scarcity, but just don't lie. If you have it written term sheet, make sure you actually have a written term sheet and it's not coming in a week. It's like you physically have it. That's the biggest mistake I see. Cause if it does like the deal is dead, at least for the VC from the uncovers the lie, it's, it's pretty hard to recover from.

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Mat Vogels (52:21)

We see this all the time where they'll say that they have a deal signed or they're very far along or whatever it might be. then like we find out that it's not the case. And sometimes it falls on both sides. And then all of sudden you're back to square one again. But you felt like you were at the finish line and now you're back to initial meetings again. And that you just don't put yourself in that position. It's one of the easiest ways to lose momentum. All right. They've closed the round really quick. A couple more questions here.

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Andrew Couillard (52:32)

For sure.

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100%. Yeah.

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Mat Vogels (52:47)

The round is closed. What's the biggest mistake you see founders make right after they close the round?

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Andrew Couillard (52:52)

They, honestly, this is gonna sound so crazy, is they maintain their scarcity, hustler mindset.

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because the reason that venture capital gives you money is because one it's in the form of equity. Otherwise couldn't get it from a bank. But we want you to use that money for high growth things like take big swings. Go to the PR firm that is unbelievably expensive but is going to help produce or promote the brand and get recognized. And we've seen so many founders they raise the money they get it in the bank. They freak out because they've never had that many millions in a bank account and they still eat ramen sleep on a cot and they refuse to hire the best people because they're trying to like maintain their cash burn. It's like no weird

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doing this to accelerate your business. Use the money. Use it in a very like judicious way. Don't be blown in on stupid stuff or else you're going to blow through it and maintain like whatever you said was your runway when VCs asks, okay, we give you this money. You know, how much runway does this give you? Don't blow that right? Because that's also a negative signal. But I see so many founders just like they get in this like scarcity mindset and they can't leave that scarcity mindset. It's like, no, you need to be in a world of abundance. You need to get the best people on your team. Probably have to pay a premium for the best people on your team. That's okay.

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Go to the best PR firms. Go to the best law firms. Go to the best of everything because we want you to build the best possible company. I don't know if you had that experience when you were a founder too, where you you raise the money. You're like, I don't want to lose it. Yeah.

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Mat Vogels (54:03)

Is that maybe one of the?

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Definitely do. Or you spend it too quickly. was kind of in, I think the problem was I did it both at the same time. It would be like, would spend it too quickly on things I thought were important that weren't important, but it was like, you know, Facebook ads at the time. But then I wouldn't hire like the right person. So I would save money on that. So it's, think that's the hard part too is, yeah. Yeah. No.

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Andrew Couillard (54:11)

Yeah, yeah.

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Yeah. Right.

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Yeah, you probably don't need a Super Bowl commercial. It's like a seed company, right? I'm trying to get you some money, but I would say

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far and beyond hiring the best people is the best use of your money.

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Mat Vogels (54:31)

Yep, love it. Any of those leading into maybe the final question of what is the biggest reason why you see companies as a whole fail? Obviously founders listening to this are in the earliest stages. What are some of those reasons that they should look out for now in helping them go the distance?

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Andrew Couillard (54:47)

I mean, for just venture backed companies, right? Which is a small subset of all companies in United States, but a lion's share of S and P 500 NASDAQ is I feel like a lot of companies that fail, fail to hire the best people. They get a bunch of B and C players. They don't hire the A players or they fail to scale themselves.

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Mat Vogels (54:49)

Venture back companies, yeah.

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Andrew Couillard (55:05)

And you can find founders that are so technically brilliant. have such nuance, but they just can't inspire and lead and manage teams to then execute on scaling that vision. And it's the scaling part where oftentimes the unraveling happens. And it's just a different mindset. It's a different type of person that's required for that. That's again, some of the behavioral characteristics we're trying to screen for in these pitch calls and these diligence, because we want to know that you're not only technically brilliant and a rock star of a human being, but you will also be able to motivate and champion people towards a common mission or a

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and be able to execute on that. And I just think a lot of founders just can't, right? It's a totally different skill set required.

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Mat Vogels (55:41)

Yep, agreed. Andrew, thank you so much. There was a lot of information packed into this hour. I'm super excited for founders to listen to it. Where can folks continue to follow you, learn about you, Black Flag, any last minute calls to action?

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Andrew Couillard (55:57)

Blackflag.VC, we've trying to put out a lot of tools in there to help founders. So regardless of investment, we want to help add to this ecosystem and make sure that you are building the best possible companies, regardless of whether we're a capital provider or not. think LinkedIn, X, please engage in me. I'd love to talk to you. I'd love to meet up with you at a meetup. Again, increase your surface area of opportunity, meet incredible people. If you see my face at a happy hour event, please come talk to me. Yeah.

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Mat Vogels (56:20)

Love it. All right, Andrew, I'm sure we'll have some more meetings later in the day, benefit of doing these with somebody on my team. So thank you for hopping in. Love it.

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Andrew Couillard (56:26)

Matt, it's always an honor and privilege anytime, I appreciate you

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brother. I appreciate you adding to this ecosystem and honestly providing tools and information like this for founders. Go out there and do it. There's never been a better time to raise money. Rise and rise all boats. Go be a pirate too, right? Challenge the status quo. Yeah, way more fun. As someone who's been in the Navy, why be in the Navy when you can be a pirate? All right.

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Mat Vogels (56:34)

That's our goal. mean, rising tide lifts all boats. Yeah. Yeah. Yeah. Pirates have more fun. Yeah.

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Exactly, All right, Andrew, have a good rest of your day. We'll talk soon, bye.

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Andrew Couillard (56:49)

Awesome, Matt. Well, thank you for setting this up. We'll talk soon, brother.