Mat Vogels (00:10)

Welcome to another episode of Fundraising where we ask early stage investors all the tips, tricks and secrets about the fundraising process. And today I have Philip Carson, partner at Cubit Capital that is going to go through

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the ringer with some rapid fire questions on the fundraising process. Philip, thank you for coming on. Could you start a little bit with a little background on you and the fun, what you invest in, average check size, those types of things.

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Philip Carson (00:37)

Yeah, Matt, thank you for having me. Let's see, myself grew up in Lexington, Kentucky and been a native of Texas since 2014. Enjoy it thoroughly. It's not the, yeah, not the venture capital ecosystem that most are used to, but an incredible powerhouse of entrepreneurship and just marketplace activities. So grateful to be here. We started in

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Mat Vogels (00:48)

Before it was cool. Yeah.

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Philip Carson (01:03)

early 22 investing in early stage venture focused in two main categories. One we call national security. The other is human flourishing within national security, focus on energy infrastructure and defense. That includes critical supply chains. On the human flourishing side, we're thinking about things around redemptive media.

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education, second chance appointment opportunities, enabling the skilled workforce, really a lot of the nuts and bolts that help society thrive. On the national security side, it's like the, just the foundational elements that enable those activities to take place. Our average check size is probably around 500K to 3 million. Focus on pre-seed to series A. When we started,

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a bit of a unique element to us is we're a single LP firm. So we've kind of sat down at the table, fortunate enough to the principal and founder had a vision in mind and then put the team together to say this is the course we're charting and we've been building this firm while investing and, you know, companies building themselves. So we've got a handful of portfolio companies that are the same age as we are.

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Mat Vogels (02:15)

Mm-hmm.

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Philip Carson (02:20)

It's been awesome to walk through the journey with them. ⁓

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Mat Vogels (02:23)

Yeah.

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That's great. A single LP. Could you maybe dive a little bit deeper on why that could be valuable to some of the founders listening? Because that's a new one. I haven't heard very many folks say that, but I could see that being a huge advantage for founders out there.

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Philip Carson (02:36)

It is, yeah, it's very unique, very unique, especially at this size category, if you will. Yeah, for us, we don't have traditional fund terms. We don't have fundraising cycles. don't, we really have zero need for early liquidity events. We're...

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able to invest in relationships much longer than other firms are. Granted, a traditional VC firm has a pretty long fun life with extensions and so you could easily find yourself in a 17, 18 year VC firm or fund. But for us, just, removes some of the misalignment that exists between capital allocators and the founders.

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And so we get to have flexibility within that. We're fortunate, you know.

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ultimately get to know founders, what are they working towards? How do they like, do they want to operate this business for 30 years and not actually sell it? And can we still invest and join the journey with them and still achieve a return like we're in this because you know, we want to be good stewards of capital and resources. And one of the metrics to that is generating a return. That's very good.

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but we have a lot more flexibility on how that's achieved.

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Mat Vogels (03:57)

Perfect. Let's go one more question on you specifically. You mentioned that you've been in Texas for a while. How did you get into VC in general? As a career path, what were you doing before VC? Why VC?

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Philip Carson (04:09)

Yeah, great question. I did not dream of being in venture capital. I definitely dreamed of starting a lot of businesses. I had been entrepreneurial, I've worked in public markets, private markets, investments, worked in construction, industrial services, and then tried to build companies along the way. That ended up right timing, right place. Met our principal, Trevor, and we...

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You know, started working together a couple days a week while I was finishing business school to see what we could learn about the venture asset class, ways that we could operate within it. And then, you know, the rest is history. We're maybe 53 companies now in the portfolio and been able to cover a lot of ground.

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Mat Vogels (04:58)

I love that. Some of the questions that we have coming up were questions nominated, voted on, and voted up by some of the founders listening. The first one that was most popular was, what is your favorite part about being a VC? And then is your least favorite part about being a VC?

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Philip Carson (05:13)

Hmm. this is very timely. as I mentioned, we've got, you know, a large portfolio for our team signs and a lot of my time is spent helping and just supporting the founders that we've invested in thus far and something I really want to do. and, and it's fun. There's also an, an element of like, it's fun to make a new investment.

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and to learn about a new technology and to like, you know, make that bet on the future and get excited about it. So the favorite part of this job.

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Yeah, it's, frankly, there are times there are some companies in our portfolio where our check was really meaningful. And that those companies have gone on to do incredible things raise, you know, 20 times in one round the amount of money we invested in that that single round. And so I think being in the position where you do take a risk.

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and you get to know the founder and you decide like, this is worth investing in. They have a level of courage that we've identified and that we want to support. And then being able to say like, hey, you actually made a difference in this journey versus being just one of the like 30 investors in a massive round where it's more economically driven, not

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not much of a relational proximity to it. My least favorite thing, oh, that is, I don't know. I mean.

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Mat Vogels (06:43)

VC's all rainbows, there's nothing hard about it.

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Philip Carson (06:47)

Yeah, that's a good...

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That's a good question.

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Think, well.

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Yeah, honestly, I don't know that I can think of something right now. ⁓ Maybe, yeah, when there's just so much going on and you've got tons of requests, tons of trying to meet new people, trying to serve existing relationships and prioritize commitments. You've got a bunch of, yeah, it can easily be a job where you lose all bit of your personal family time.

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Mat Vogels (06:55)

That's all right.

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Yeah.

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Mm-hmm.

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Philip Carson (07:19)

if you don't have really strict discipline around it. Back to the favorite things. just realized, so one of the companies we invested in very early on is Element 3. extract lithium from produced water in the Permian Basin. And they're actually about the same age as we are. So as a firm, that was one of our earliest investments made. And they were starting out and then on

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Mat Vogels (07:20)

yeah.

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Philip Carson (07:44)

two weeks ago or so, had the ribbon cutting in Midland for the production facility and to see that come to fruition. it's just that those, those are some of your favorite moments for sure, where you can just see the work being done and it's great. and, know, knowing all the sacrifices that it takes to get there on the founder side.

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Mat Vogels (07:56)

Yeah.

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yeah, absolutely. It's one of the things I would say that VC is almost like running an agency where you have so much context shifting. It's usually like helping others build their business and it's sometimes tough to focus on your business and your things because at end of the day, it's a business for us too. Similar to that, is there something that you wish more founders understood about what it is to be a VC? Sometimes I feel like pulling the curtain back a little bit, showing maybe...

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something that you wish more founders maybe appreciated or understood now that you've kind of gone from an operator side to a VC side.

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Philip Carson (08:41)

Yeah.

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Probably. Well, there's two. One of them is more of an apology of like in this business, you know, in a given week you might meet 20 new people and you just can't sit down for an hour with each of them and get to know them in a meaningful way. And so there's a nature of it that can feel transactional and

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I'd say for the founders who I meet and I talk to where they're just not building something that we've identified that we're dedicated to invest in. It's like that mission, that business is still worthy and still wonderful that they're taking the plunge to do that. And they shouldn't feel discouraged based on an investor's decline of investment. On the other side,

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Try to really understand what firms are focusing on. working, I mentioned before we started this, we're working on a little bit of a rebrand and messaging for us to get more specific in the things we invest in. So really look at a firm's portfolio and try to understand where you fit in that mix, if it's synergistic, if it's completely different.

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That would be one element is just try to really understand what that firm is focused on, what categories they've identified, what problems they're trying to solve and how you fit within that.

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Mat Vogels (10:12)

Yeah. All right. Last question here. I always feel like it's like the airline tagline. It's like, know you have a lot of options in flying. Thank you for choosing us today. What are some reasons why founders would pick qubit to be on their cap table?

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Philip Carson (10:26)

it's a good question. We hope we're very supportive. I think if they really want like a friend in the mix, I don't think all investors should be the founders friend. think there's a healthy relationship there. At times there can be tension.

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Mat Vogels (10:38)

Hmm.

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Philip Carson (10:50)

But, and I'm not saying that we're always just, you did nothing wrong. This is great. You know, a friend is someone who speaks truth to you, is transparent. And those are the things that we want to do is really walk alongside the founder, speak truth to them, you know, have that level of transparency and really support them.

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in the mission and care far more about them themselves as the business they're running. think that's one of the hardest things. And it's challenging if a founder is starting to make some poor decisions, business suffering. It is challenging not to just get disappointed or write it off and say like, no, this founder, this person is like far more valuable.

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than just the product, the good or the service that they're building. And that's a huge focus for us alongside, I could list all of the strengths and network and services and things that we help founders do, but that would be the key element is the foundational relationship.

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Mat Vogels (11:57)

Yep, I love that. All right, we're going into the fundraising process. I like to break it down into three different waves. The first for founders being a lot of these folks listening are first time founders. They don't have a network. They don't have anybody they could really lean on. So the first step is getting into the room. How do you get that first meeting with a handful of VCs? Second step is you got the meeting.

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How do you crush that meeting so that you can continue to have these conversations? How do you really excel in those first 30 minutes with meeting a VC? And then the third phase is kind of the last like messy middle and beyond of just pushing it over the finish line, getting your cap table situated and then close out the round. We'll talk a little bit after it's on some feedback with what to do after you close around, but let's dive into the first part of the fundraising process. A lot of founders, what they will do.

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is they'll kind of build out a list of 10, 20, 100 VCs that they want to reach out to. What is some advice that you would give to some of these founders and what characteristics, traits, or things that they should index on when building that list?

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Philip Carson (12:57)

Yeah. So you've got your target, say you're raising a seed round. You've got your. Yeah.

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Mat Vogels (13:01)

I'd say in this case, like pre-seed. These are folks that have

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never raised, this is their first round of capital and yeah.

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Philip Carson (13:06)

You've got your list of pre-seed investors. You go on the internet, you find whatever firms are investing in pre-seed. This resource would be a great stopping place. those investors, and then try to categorize what are they focused in, rank them green, yellow, red based on alignment. And then from there, try to find a mutual connection. Even if you don't...

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know the VC that surely you can find someone who knows them, someone who's worked with them and then really ask, you know, if you've got a few connections into that investor, like who's going to be the strongest connection? Take, would say fewer is actually better than just the 300 calls. And sometimes that is very necessary.

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Mat Vogels (13:46)

Yeah.

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Philip Carson (13:56)

I've talked to lot of founders that I was well, you know, I was over a hundredth in line in their, you know, call list, but, you know, consider who the right connection is there. And then once you have the call, try to get to know them, understand what they care about, not just that you're gonna sell something to every person in the world and the...

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the market size is a trillion dollars and you know, try to really get to know them, see what they care about, see what they want to see happen in the world and if the mission you're focused on is supporting that then communicate it, reveal that.

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Mat Vogels (14:41)

I like that. It's such a hard kind of Peter feels like there's so many VCs and new ones that pop up all the time, but trying to figure out what they care about is a really important way to see if you're the right fit. Founder investor fit is a real thing. And sometimes it's not as obvious. So doing the extra bit of homework there. What is one of the best ways that you think founders can, now that they've picked the VCs they want to reach out to, how can they actually get their pitch deck in front of

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these investors? How can they get their pitch deck in this case in front of you or any other folks at qubit?

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Philip Carson (15:11)

Well, you could email me. You probably guessed my email pretty easily. And I'd say most firms have the similar email. you know, trying to find a mutual, if anything, you know, look at their portfolio, look at the founders and their portfolio, who they've worked with in the past and try to get connected to them and, you know, do your own homework on the VC before you

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Mat Vogels (15:14)

Yep.

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Philip Carson (15:37)

you know, think you want to take money from them, capital from them. I would say that's always the best connection is through someone that they've worked with in the past. And otherwise, you know, this is unpopular, do not have an AI generated email. It's do the hard work of writing the email, curating it.

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Mat Vogels (15:58)

Meh.

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Philip Carson (16:05)

tell them why they should want to get to know you versus just a generic AI email. We have so much noise in our marketplace broadly, especially within the VC marketplace and the AI generated emails. It's not a good sign of your work.

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Mat Vogels (16:24)

No, yeah, spend a little bit of time making it feel a little bit more personal and it'll go a long way. A lot of times what I found that for VCs and we're looking through these pitch decks, because we get hundreds of them in a month, let's say, and...

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we have to kind of prioritize to your point earlier, some of the things that we care about, we can't spend an hour on each of these that we get or new people that we meet. So I found that some VCs, they index on one particular thing, oftentimes maybe a particular slide. Do you have a slide that you go to quickly when you're going through dozens of these pitch decks at once? And is that slide, the most important slide is kind of what we're trying to get at, but maybe starting with if there is a particular slide or piece of information that you

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go to first when you open up a pitch deck.

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Philip Carson (17:10)

I was talking to a founder recently who's revamping their pitch deck and I have to say I don't look at pitch decks that thoroughly anymore. I know that's bad to say. Yeah. I just wanted what I'm the only thing I'm trying to do is grasp the story in that first glance. I don't even look at the market size. I don't look at

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Mat Vogels (17:21)

No VC does, that's it.

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Philip Carson (17:36)

the traction or the numbers. I want to try and grasp the origin story of that founder, how they learned of this problem, why they're trying to provide a solution to it, and see if there's alignment there. We really look for founders that have lived experience in the problem they're trying to solve. So we're at XYZ job, you kept having this problem.

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or you were doing XYZ activity in life and you kept coming across this problem and then you want to solve it. The alternative to that is a whiteboard entrepreneur and both can be successful. We've simply chosen to focus on those that have lived experience and the problem they're trying to solve. They've suffered.

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from the problem itself and so they know that the sacrifice needed to build the solution is going to be worth it. I think that's an element to it. And then, you know, why they're equipped to solve it. That's really the main focus is trying to figure out, you know, what's the origin story here. And then before looking further into the pitch deck, if there's a deep alignment there,

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it's going to be a call with the founder and gets known. The pitch tech itself, really depends. mean, we focus on a lot of hardware and hard tech. so, you know, that's a little bit, know, seeing visual representations of it, the application, that's helpful for sure. But yeah, the origin story is key.

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Mat Vogels (19:06)

Yeah, I like that. the early stages, you have to bet on the founders almost more than anything. So the origin story plays a big piece into that. Are there any mistakes that you see founders make in this particular phase, whether it's in the reaching out process and how they do that in the creation of the pitch deck and what they spend too much time on there? Any mistakes in the process that happens before they actually meet with the VC?

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Philip Carson (19:30)

Most businesses should not raise venture capital.

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Mat Vogels (19:34)

It's so true.

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Philip Carson (19:35)

The default notion to try and raise venture capital for your startup idea should not be the case. We see a lot of opportunities and meet a lot of founders where the conclusion is, yes, you have a great business and you should just run this thing. You don't need venture capital. I think venture capital is helpful when you're trying to condense time.

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And there's a certain window of opportunity present. That said, most of the companies we know and have depended on for much of our lives weren't accelerated in a matter of a couple of years through the vehicle adventure capital dollars. They're built over long seasons and that's where great companies are built.

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Yes, for certain companies venture capital is required. You need money for these opportunities. But at the first onset, it's consider like, are your options here and do you actually need venture dollars?

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Mat Vogels (20:37)

Yeah, I think that the most common advice I always say is I spend more time convincing people not to take venture dollars than I do to convince our, to take our venture dollars. The happiest founders that I know are the ones that did not raise venture capital. And the least happy founders I know are the ones that raised venture capital. And I think it's because the majority of them just shouldn't be raising capital. And then when you get to that point, it's a huge sense of stress and frustration for the businesses that need it.

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it's one of the only ways and then they thrive in that environment. So it's just not for everybody. I think it's the key thing to take away there. All right.

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Philip Carson (21:09)

Mm-hmm.

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Mat Vogels (21:15)

We've everything right. They've gotten an interview or they've gotten into that first 30 minute meeting. What is something from your side as a VC going into those meetings, whether it's something you want to see from the founder, it's something you're looking to see from the presentation or the idea. What is the thing that you walk away going, I need to see this or like to see this during that first initial meeting with the founding team?

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Philip Carson (21:38)

Yeah.

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a sense of cohesion. ⁓

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Mat Vogels (21:41)

Mm-hmm.

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Philip Carson (21:43)

I there's, I'll give a little more background to how we focus our time and who we're trying to get to know. So one of the characteristics we look for in a founder is humility and confidence. Something that a lot of VCs, I think have written books about, you don't want the humility part. So we are very focused on finding founders who are

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unique in their confidence and humility. They take advice when they need to take advice, but then they don't when they're pretty confident on their solution. just need to test a few more hypothesis. So I think getting a feel for is this individual willing to spend the next seasons of their life dedicated on this mission.

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and what are they motivated for? It's trying to grasp what are their true motivations? they in the right season of life to do this? And then, yeah, the humility and confidence side is really key. There's a handful of founders that are above and beyond in this regard in our portfolio. And frankly, they've gone on to

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be some of the most successful. You attract talent way better. Your team respects you. You're not just respected because you're the boss. You're respected because you inspire them. I think that's really key.

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Mat Vogels (23:03)

Nope.

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So those are some good, almost like green flags and characteristics for founders. Are there any red flags from a founder side that when you see during those meetings, you kind of end up walking away.

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Philip Carson (23:21)

Yeah, there's.

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Yeah, the assumption that no one else is doing it or more of, I would say we've, there have been a handful of founders I've met that just complain about other people. I would say if complaining is, you know, that that's, that might only be my pet peeve. and I'm guilty of it at times. And, I try to have friends hold me accountable on that.

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in a stern manner. Yeah, believing that no one else is capable or working on this activity, believing that it'll be easy, believing that you've already got it figured out and that you're basically offering a gift for the investors to invest in your company as if there's no risk. Those would be some elements of...

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illusions of grandeur.

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Mat Vogels (24:06)

Red flags.

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Yeah. another question that we had a lot of founders ask kind of during this is, do you prefer when founders like go through a pitch deck or just like chat? Does it depend? Cause, sometimes they go in and they don't know like where they should take it. Cause some VCs are different, but how do you feel about that?

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Philip Carson (24:23)

Yeah, that's a question. Right, right before this call, on, I was on a founder call and going through a pitch deck when, and, and for this pitch deck, I mean, for this call, like a pitch deck was needed. It was a pretty complex, you know, technology being talked about, and it involves embedding, hardware on, something that moves really fast through the air. And so there's some elements that like visual representation is really helpful. If that's not the case.

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Mat Vogels (24:43)

Mm-hmm.

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Philip Carson (24:50)

then actually I don't, I would say don't pull up the pitch deck. certainly offer it, but don't automatically pull it up. I think it's a great way to just, you know, take a read of the room. So, Hey, do you want to see the pitch deck? Have you seen it? and most of the time I'd rather just talk to the person. And sometimes I'll just actually say like, Hey, do you have a slide on this to, so I can like see it better and we can talk through it more.

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specifically.

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Mat Vogels (25:17)

Yeah, I like that. Are there any questions that you think founders should ask VCs during this initial meeting? Not from a, like when they ask it, you go like, I'm glad you asked that question, but more, this is the founders process, they should take a little bit of control over it as well. What are some questions that maybe they could ask even just at the end of that first meeting?

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Philip Carson (25:36)

Yeah, well process. I do think it's helpful when founders say like, hey, what's your process? Can I send you a reminder email on Thursday kind of thing? It's just part of it. It's like so many things are in the air at all times. on our side, we're a small team, try to cover a lot of ground. We do deep diligence.

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And so for us, we're constantly sequencing things. so, um, and, know, try to be really good about letting founders know what's up and, and what that process looks like live. But, you know, ask them, Hey, how do you want me to, you know, communicate with you? How, um, you know, founders, if, if the investor says they're interested and they want to learn more, they're going to dig in then like,

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Mat Vogels (26:00)

⁓ Yeah.

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Philip Carson (26:26)

you have full freedom to ping them and remind them. It's also a great working relationship to ask them, like, what's the best way to do that? Because I think a lot of VCs have a...

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they do not say no well. And so it's a good way to try to drive them towards a decision if they're being a bit flippant on it.

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Mat Vogels (26:49)

All right, last little question on this, initial meeting, crushing the initial meeting. Are there any high level pieces of advice, pitfalls that you see founders jump into during this phase, that first original meeting phase before we go into the rest of the process?

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Philip Carson (27:04)

pause and get to know them like you're trying to get to know a friend at a dinner party. Too many calls, you start and then they just jump in and talk for 20 minutes. it's great if you're that excited about it, but try to read the room, ask.

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you know, if it is a meteor pitch where you're talking about a lot of different complex technologies and you've got to cover a lot of information, then pause, ask if they have any questions. I think the biggest thing is assuming that venture investors are smarter than they are. Like assume they don't know what you're talking about. Assume that they have a little bit of understanding about it and you need to educate them on it. think that's one of the best

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sales tactics as well as education. Like if you can educate well, then you can like spark a level of curiosity in people. I think that's huge is, is, you know, reading the room, educate, don't assume that they know everything that you're telling them, and try to invite them into that conversation instead of just talking to them for the next 20 minutes and then

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at the end saying, you know, do you have any questions?

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Mat Vogels (28:30)

It's the word, it's usually it's at minute 28 too. It's like they've talked for 28 minutes straight. We got two minutes left and it's, you know, there's a whole, there's a whole thing there. So yes, that's a, that's, that's good advice for sure. All right, going into the last phase of the fundraising process here, you've had a bunch of these initial meetings, let's say as a founder, you now got to start herding cats, you know, building up your cap table, saying yes and no to a lot of investors. But let's talk a little bit about the diligence process on the qubit side.

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Can you go high level on what that process might look like if you are interested in the founder? What is the process at a high level look like for QVET?

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Philip Carson (29:07)

Yeah, I'll give you our standard operating procedure that we hit 25 % of the time. So we get a deck or an email, I have a call. We send that initial deck through an agent. We've built some agents. The initial deck goes through an agent that then produces a memo. It's actually focused on the market.

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more so than the company itself or the team, where we're just trying to get up to speed on the market if it's something we haven't been as involved with. And then we discuss it. And then from there, if we move it forward, we begin diligence. And that starts with what we call a deep dive, a day of the week, four hour meeting.

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have a call with the founder in the middle of it. So we're huddled in a room, researching, diligencing, trying to figure it out. We have the call with the founder in the middle of it to say, hey, are we tracking? is what we're coming up with. see you're saying this. This is what we're actually seeing. We try to figure out very quickly if we're trying to get to know as quickly as possible. And then after that,

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we huddle up again, say like, all right, are we gonna, is this a fit? We're gonna now turn over the rocks that we wanna turn over. And when that's the case, we'll do customer references, get to know a lot of different relationships within their network to understand more than what you can just uncover on a website or a pitch deck. And then we do in-person visits before we invest. We like to get to know people.

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share a meal with them, their leadership team, try to, yeah, just get to know them as a person. ⁓ so I wish I could tell you that it takes us a week and we're at a firm, yes or no. That's not the case. It would be if we were only working on one opportunity at a time, but it takes a few weeks and we've made decisions and

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Mat Vogels (31:03)

Yeah.

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Philip Carson (31:21)

you know, matter of hours. And then it's also taken us a couple of months on others, where, you know, a lot of, a lot of research and work needed to be done before that, decision could happen. But for the most part, on average, I'd say it's a few weeks of a process when everything's lined up. If we're leading, you know, we'll issue the term sheet and then it takes however long it does after that, depending on what.

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what legal work needs to be done.

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Mat Vogels (31:52)

Yeah, exactly. It's a dance obviously. And sometimes founders, I find that it happens more often than founders like to think, but there will be a point, especially if he gets close to the end of a round, what ends up happening is, it's really hard to raise the first three quarters or two quarters or half and then three quarters hits. And then all of sudden, like the last quarter tends to get pretty hard because you then have to kind of.

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Sometimes you have to tell people they can't invest as much or you're oversubscribed and all these people that said no weeks back are now interested again and it becomes a weird prompt. Like it's a good problem to have, it's a weird problem to have. But could you give advice to founders when they are in this phase of having to ultimately pick the right investors on their cap table?

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What are some of the things that you would recommend that they look into? You've already had some good feedback on this and picking investors already, but then maybe, and on top of that, some mistakes that you see founders make when they're in this decision process of figuring out who they should keep on and then leave off the cap table.

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Philip Carson (32:51)

Hmm. I mean, yeah, that's a good question. It's a good problem to have.

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Mat Vogels (32:58)

It is.

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Philip Carson (32:59)

I don't, you know, go with who you enjoy corresponding with. Like, I wouldn't put too much science into it. Who do you enjoy corresponding with? If that person's made fewer investments or has a smaller fund than the other person, you know, it's still a positive because you're going to have to correspond with them for a long time. And I think the bigger funds...

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Mat Vogels (33:03)

Yeah, that's true.

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Philip Carson (33:26)

Try to get to know the investor you're actually talking to. Try to, I would say pick on the investor more than the fund itself and who you enjoy working with.

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Mat Vogels (33:42)

It sounds simple, but it's especially in the early phase. It's kind of true. Like if you just pick who you like working with, everything else would kind of figure it out. I think founders get trapped in this like, well, but I need to pick one that's going to write my second check or it's going to like help me lead future rounds and all of these things. But so much of that changes. What doesn't change is the people that are on your cap table for the next 10 years or so.

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So making sure that you like them is really good advice. Any other pieces of advice to give to founders in this phase of the diligence process, picking investors on their cap table, moving into that closing phase of the round, anything that comes to mind?

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Philip Carson (34:02)

Yeah.

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Yeah, a little bit of what you just commented on, but it's incredibly challenging. It questions all kinds of idols someone has this entire work. Like you're going to be faced with identity crisis, nonstop facing rejection, facing very fragile celebrations and people will celebrate you when you do good things. Then people will be

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emailing you when you make mistakes. I think to your point, do it with the people you enjoy working with. It should be fun. You're going to spend more time on this than anything else in your life within that dedicated season. So have fun with it. Work with the people you enjoy working with, not just who you think is going to...

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Mat Vogels (34:48)

Yeah.

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Philip Carson (35:04)

If you're dependent on an investor for your company's success, then it's probably not a good circumstance.

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Mat Vogels (35:13)

I had another fun that mentioned that this is usually when the time founders like to get into the mindset of like, I just want to close this round so I can get back to building, which is it's true, but it's oftentimes where you can make some of the biggest mistakes because you're just like, well, I just want to get through this. I'm going to get over this. And you end up making these really quick rash decisions. And then, you know, having somebody that you don't like on your cap table or that isn't good for the business is a very real problem. And if you don't think through it,

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it can obviously be a real issue. And I'd say most of the time it comes down to what you said. It's how likable and that relationship that you have. It's usually not, well, that VC didn't do enough for me or they didn't make enough introductions to customers or capital. Any sort of issue that I've seen where founders are struggling and their company is not doing well, it's because there's a relationship problem with the investors. there is like an actual...

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some friction there. So it's absolutely true.

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Philip Carson (36:10)

Yeah, you reminded me if I were a founder raising today, would probably ask potential investors, especially once you're getting past like first call stuff, their advice for a problem you have, even if you already have the answer to the problem, like ask their advice and see what they say, how they respond.

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and get a taste for what that looks like. There's also a handful of investors that say, if the founder needs help from an investor, then they're not a good enough founder for us. those are very cheap words. ⁓ And we all need help in accomplishing the mission we're setting out on. so I wouldn't, yeah, I'd say test the waters there.

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Mat Vogels (36:50)

It is.

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Philip Carson (36:58)

and try to have a little bit back and forth relationship with them.

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Mat Vogels (37:03)

Agreed. All right, the round is closed. Just a couple more questions here on maybe what happens after that. What is a common mistake that UC founders make right after they close their round and maybe for the first three months after?

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Philip Carson (37:15)

Hmm.

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spend too much money and spend too little money. You got to, you got to thread the needle. I think it's best practice after you close around, have a board call right away. If the board meeting is not for another month or two months, like go ahead and have the board meeting and get realigned on what those capital uses are going to be. Get smart with it.

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Mat Vogels (37:18)

That's the golden answer right there. Absolutely true. ⁓

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Philip Carson (37:39)

Like I think founders probably are far more diligent when capital diligence, when they don't have a lot of cash in the bank. And then when they get the round clothes, cash is there. it's, think there's probably been a list of items they've been patiently waiting to execute on equipment to buy people to hire.

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Those are good things, but they shouldn't already have been decided. Things change. It may have taken a week to raise around, it may have taken four months to raise around. Give it the board, give it the leadership team, reassess what the plan is for that capital and try to steward it and invest it really well.

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Mat Vogels (38:27)

I like it. Our last question here, are there any common reasons that you see startups fail altogether? So not just in those first few months, but ultimately in the long run, most companies fail. So this is almost more to normalize it, but at the same time, are there common reasons that you see that happen that founders can start being aware of in the earliest days?

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Philip Carson (38:46)

Yeah, this is probably where humility comes into it. ⁓ We look at amazing solutions all the time, but few of those solutions are solving a great problem. And that's, I think, being really honest with yourself of is there already a solution to this problem? And

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Mat Vogels (38:49)

Yeah.

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Philip Carson (39:08)

I think some founders end up building solutions because they don't like the solution, but a lot of other people actually like the solution that exists and are fine with it. so, don't always, I know I talked about the lived experience and this is a little bit of when we're looking at companies, like it'd be really to our disadvantage if I only considered it through the lens of me.

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the customer Like I have a very different, you know, I'm I'm actually not a great customer, you know, you don't you don't want me as your customer and I like to haggle I like to you know, no, but I'm loyal when it's a good product but I think yeah being honest with yourself about the existing solutions and Are is there a solution you like but you wish you were a little bit different like

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Mat Vogels (39:39)

Yeah.

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There you go.

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Philip Carson (40:07)

get to know the team, get to know the company. going to work for a startup is an incredible journey. We've got tons of friends that have gone to work for early stage startups instead of starting their own. And I'd say they've reaped all the rewards. They also have to make sacrifices. So try not to be a founder just because you think

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Mat Vogels (40:15)

Yeah, it is.

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Philip Carson (40:31)

being a founder is cool or you need to be a founder. yeah, lay down your desire to be the head honcho, if you will, if that's what's needed to go work for the best solution that exists.

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Mat Vogels (40:46)

Yep.

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I love it. All right, Phillip, I appreciate it. That was a lot of wisdom in a short amount of time. Last little bit, where can founders keep in touch, follow along with you, with Qubit, and continue on the journey with you.

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Philip Carson (41:01)

Yeah, Matt, thanks for having me. Thanks for building this stuff. Actually, I love stuff like this in the market. Anytime where it's removing noise from the system, where it's creating order out of chaos, I love it. For us, qubit.capital is our website. We'll have a newsletter being released in a couple months. There'll be ways to sign up. We're going through a little bit of the rebranding now, but...

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You know fine. think yeah, we're on LinkedIn and not not too active on social media stuff, but Email us. Yeah, love to love to meet

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Mat Vogels (41:36)

Perfect. Well, thanks again. Have a good rest of your day. And I'm excited for founders to listen.

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Philip Carson (41:42)

Yeah, thanks, Matt. I appreciate it. Thanks.

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Mat Vogels (41:44)

Have a good one, bye.