Rolling Fun #7: Q4 Updates: Nuclear Fusion, AI for Kids, AI Manufacturing — and how founders can find lead investors.
Smart Friends Episode 73: Rolling Fun #7
Al and Bo are back again for with another round of Rolling Fun.
Rolling Fun is our rolling fund where we invest in obsessive geniuses building utopian technologies.
This is our 7th pod episode together sharing our antics and investment updates. If you want to feel pre-rich, accredited investors can join us through AngelList today.
We have investors who like how we’re consistent in providing quarterly fund updates, and our podcast episodes are but just another fun way of us providing updates with our portfolio.
Links to Platforms:
Here’s what we explored in the episode:
We shoot the breeze about barbecue, Pierce (Bo’s son), and Al’s farm life.
Turns out other funds don’t communicate with their LPs, and our consistent quarterly updates provide us with a competitive edge against other funds.
For Q4 2023, we’ve invested in Marathon Fusion, Portola, and Atomic Industries.
Marathon Fusion is building processing systems for the compression and purification of tritium from fusion exhaust.
Investing in frontier technologies often involves backing a small universe of geniuses who possess the expertise and drive to actually build groundbreaking projects.
Rolling Fun wants to make sure that those genius pioneers get the capital they need to build the thing that advances all of civilization.
Portola is a startup that builds AI tools for kids. Founded by Quinten Farmer, a former intern at Techstars together with Al.
Portola is doing something like Replit, a platform that teaches kids how to code. But instead of coding, they’re teaching kids how to create with AI.
Founders hate “waiting for a lead” investor feedback. We explore that.
Invest your money into high-growth startups at the earliest stages
When new technologies meet the market, the world changes for the better. That's why we invest our money into the best founders in our network.
We write small checks to 15-20 very different startups each year. Previous investments include Aalo, Gently.com, Omella, Driv.ly, Weavechain, Stell Engineering, Ouros, Solve Data, and more.
Our Website has background on the fund, our past deals, and more.
Accredited Investors: reply to this email, I'll send you our deck, and we'll get you into our deals starting this quarter.
Learn more about Al Doan, Bo Fishback, and Rolling Fun:
Additional episodes if you enjoyed:
Rolling Fun #6: Investing in Robotic Prosthetics, 10x Batteries. Al meets MrBeast
Rolling Fun #5: Investing in Nuclear, Ecommerce Data, and AI Productivity
Robotic Delivery Tunnels with Garrett Scott of Pipedream Labs
David Senra + Mitchell Baldridge #4: Old Books, New Events, and A Surprise CEO Job
Episode Transcript:
Eric Jorgenson: I'm excited to hear from feedback whether the effort we put into the agenda is noticeable in any way whatsoever.
Bo Fishback: No, no, it'll be promptly ignored because Al's arrived. So that ship’s sailed.
Al Doan: You're saying I won't follow the agenda, but I like looking at it.
Bo Fishback: No, no, no, no. I know you appreciate it and promptly ignore it, and I love that about you.
Eric Jorgenson: Like the fact that all three of us are aware that there is an agenda is a real-
Al Doan: Yeah, I’m practically reading from a teleprompter.
Bo Fishback: Look, I think that's one of the tricks about this is like really if we're being honest, we like started Rolling Fun the rolling fund because we were all seeing cool stuff and we wanted a reason to hang out together and like eat good food and also like invest in cool companies and founders. But the balance of those things is just really tricky to fit in, frankly, because we want to do all those things all the time.
Al Doan: Which may I say, last hangout, shout out to Wyandotte County Barbecue.
Bo Fishback: Yeah, let's go! Let's go!
Al Doan: The burnt end sandwich, man! I love it. Just memories. Memories.
Eric Jorgenson: I bet no place looks worse on Google Maps than Wyandot Barbeque.
Bo Fishback: No, but it's fire, dude. It's so good.
Al Doan: You sit in the back, it was like sitting in your great aunt's home that nobody's touched since the 70s. And you're just like, okay, we're not dusting the shelves, we're not sweeping the floor, but man, this sandwich is great.
Eric Jorgenson: Yeah. Six tables and then the door opens, everybody looks to see who it is because they assume they know.
Bo Fishback: Everybody knows everybody. No, it was really fun taking us to HomeField. For folks listening, I've fallen deeply in love with the business of youth basketball because I spend a lot of time there with my 12 year old and they built this really, truly fabulous facility in Wyandotte County, Kansas, and I took Eric and Al there and we looked at cool basketball courts and then went and ate barbecue at a place that definitely has not changed in 50 years I would say.
Al Doan: Listen, if you're an LP in this fund, Bo's child, Pierce, is a phenom. And the LPs, they will get signed merchandise when he commits to a college. I mean that's really why they're here. All of our LPs are mainly scouts and head coaches.
Bo Fishback: We're looking for more LPs and NIL sponsors for youth basketball at the same time. So I don't know, casting a wide net is what we’re doing here.
Eric Jorgenson: Rolling Fun would look great on a jersey.
Al Doan: We should have Pierce promoting like My Chevrolet or something. I'm playing today at My Chevrolet.
Eric Jorgenson: Yeah. Are there jersey sponsorships available for the youth basketball team?
Bo Fishback: Well, there is. Where he is playing at HomeField, which is the name of the kind of business and facility and stuff that they're playing at, they actually have a jersey sponsor, big grocery store chain, who paid to get their names on every single jersey for every team that is there.
Al Doan: Coach Tinos?
Bo Fishback: Well Price Chopper owned by the same guy. So yeah, David Ball knew what he was doing there. He slid right in early, wrote the check and they're on every jersey.
Eric Jorgenson: Hyvee got Patrick Mahomes. Price Chopper got Pierce Fishback.
Bo Fishback: Same thing. Same thing basically.
Al Doan: They know what they're doing. How do we get Rolling Fun right up here?
Eric Jorgenson: I like it. It’d look good. Al, do you want to, since we're in your home turf?
Al Doan: So we had a 9 a.m. sharp call time this morning.
Eric Jorgenson: It's currently 11.
Al Doan: I was up until 12:30 watching 3 Body Problem on… and it was fantastic if you have not gotten into this. I read the book, I listened to the book on audiobook and couldn't quite track the different eras that I was switching in between until I'm watching the movie or the TV show, and I was like, oh, this is brilliant, oh, I like this much better, oh, that was two different- oh, different times, same person. Okay. Because in the audiobook, it was very confusing. Anyway, up till 12:30. So I'm up early, 7 a.m. because I got to leave at 8 to get down there by 9. I send a text, 7, 7:30 like, hey guys, are we at your place, my place, what are we doing? Cause we're almost always at Bo's place. I think it was assumed. I would have been safe getting in the car and just driving to Bo's place. And then right around, yeah, 7:45, 8, it was like, hey, we can come- Bo's like, I got nothing going today. We can come to Hamilton. Here we are. They drove to the farm and got a little tour there. Now we're in Hamilton. You see the beauty. It's 71 degrees. I mean, everybody says come to Missouri if you want perfect weather. 71 degrees, slight wind out of the north. That's all you want. We're going to go walk out to Kathy's kitchen at the end of this and get ourselves a large pork tenderloin sandwich.
Eric Jorgenson: Hell yeah, we are.
Al Doan: The size of your head. That's all you want. Man, like we're in Hamilton. We're doing the quilting town.
Eric Jorgenson: I cannot paint a beautiful enough picture of like cresting the hill of Al's acres and seeing him just like knee deep in a raspberry patch with his tractor. I've never seen someone go elegantly from like farm labor to recording a podcast about deep tech.
Al Doan: I wish I had longer hair so I could just like shake out the beard really. If I could look up at Eric. Hello. [inaudible 4:49], man, that'd have been it.
Eric Jorgenson: It was gorgeous.
Al Doan: Glad you guys came up.
Eric Jorgenson: That was a nice place up there. Thanks for having me. It's beautiful. And this is the bachelor pad in the most sixty-year-old lady town in America.
Al Doan: Yeah, I went my entire life living in my mother's spare bedroom. And then as a 30-year-old, she was like- I would like home base here. So, I had an apartment that I was living in, but I had none of my stuff. Everything could fit in the back of the Toyota Camry. I would always come home here for a couple of weeks. I'm off flying for a couple of months in Berlin. I'd come home to Missouri and go to Mom's house. Then she's like, you need to move out. So, I moved into the apartment above the main quilt shop, which was just some old crappy apartment. Then we tore it down while I was gone. And my sister, who loves me very much, is like I will build you an apartment, built this beautiful place. I ordered an eight-foot painting of George Washington for the bedroom. Between ordering that and getting it, I got married. My wife moved in, and then they delivered said eight-foot painting of George Washington and she was like, oh where's this going? I was like, above our bed. Like hell it is. And so I lived for eight months in this bachelor pad. Now it's a nice office. And I wish I would have had more time. It's a great spot. I like it.
Bo Fishback: Amazing. Amazing. It is an amazing town.
Al Doan: I like that I can't not tell a story. If I've got a story, you have to hear it. A dining room table with me and my mother is just constant like no, no, no… it's just a story is too enticing for me.
Eric Jorgenson: That's why we had to get you a podcast. So welcome.
Al Doan: I almost took the David Perell writing thing that you posted about.
Eric Jorgenson: Why almost?
Al Doan: Well, because it's $4,000.
Eric Jorgenson: What's the return on being a good writer?
Al Doan: I don't know. I've never written. I was like, man, I got some stories to tell. Do I just need more time to sit and write or do I need better skills? That was my question in my head I couldn't get over. But yeah, maybe off the record, you can tell me the real story. Have you taken it? Did you take his writing course?
Eric Jorgenson: No, but I have a lot of friends who have and found it to be transformative.
Al Doan: That tweet, man, that was a very high endorsement of this. And I was like, is this how you became a good writer?
Eric Jorgenson: I've learned a lot from David, but I have not taken his course directly.
Al Doan: Maybe we should take it together.
Eric Jorgenson: He's a good buddy. That would be fun.
Al Doan: Hey, Rolling Fun can pay for our course. That's where the management fee will go.
Eric Jorgenson: If it improves our writing about portfolio companies or our- a thing we're going to try to do is be more prolific on the writing side of things. Like Bo and I talked about a lot a bunch of-
Al Doan: What I notice is we don't tell very good stories ever.
Eric Jorgenson: Despite saying all this, we do have more to say and more to share I think.
Al Doan: It is funny, man, we hear this all the time, but of all the funds out there, like we do a better job talking about what we're doing and why we're doing it and what's going where than any that I'm a part of that I've seen.
Eric Jorgenson: Yeah, at least in LPs, like I've had LPs tell me that they're a few years in with us now, we're two years in basically.
Al Doan: That's a lot of barbecue.
Eric Jorgenson: I've had people say like, we are shutting down other investments and putting more with you based- we don't even know what all the returns are comparatively yet, but you're just the only ones that communicate consistently, like send an actual update every quarter with what you invested in and why. I didn't know that was going to be a competitive advantage.
Bo Fishback: That just feels like a thing you should do, right?
Al Doan: Shoot us a text. We're happy to hear from you. We want your referrals. We want to know what's going on.
Eric Jorgenson: So all that to say, welcome to the only deep tech podcast recorded in the quilting capital of the world, Hamilton, Missouri.
Al Doan: We had to get so specific so we could win, but yes, suck it, all of you other deep tech podcasts.
Eric Jorgenson: Coming from San Francisco, that's so played out. So played out.
Al Doan: How gauche, how cliche.
Eric Jorgenson: Okay, let's do a podcast. Should we do the portfolio updates next?
Al Doan: I mean, it's on the agenda.
Eric Jorgenson: What's on the agenda, Al?
Bo Fishback: I think we have catch up to do. I think we should definitely do Q4 because we haven’t in a minute. And I think you should probably talk about some new deal flow stuff just because it is helpful for everybody to know.
Eric Jorgenson: Okay. I'll do Marathon and then Al will do Portola. That's your boy. But so Marathon Fusion, in order to grok the fusion investment, you got to first come around to the fact that like hopefully we've crossed the threshold of fusion no longer being permanently 20 years away. There's some very smart money that says that number is actually coming down now and is maybe closer to 10. Just last week, we had the longest ignition ever, which was coming up on a minute actually, in China, which is amazing. Packy McCormick did a ton of good background on fusion in his podcast series, Age of Miracles, which helped me sort of- that and just some friends in the fusion industry and people much closer to it are like, no, we're getting-
Al Doan: That's another great podcast.
Eric Jorgenson: Yeah. Smart Friends, Fusion Friends. A fusion round table would be a good one. So Marathon is, the guy used to work at like Schmidt Futures, very like cutting edge, super smart CEO, and the CTO dropped out of plasma physics at Princeton to... They're basically building...
Al Doan: What a loser. Dropped out of plasma fusion. He couldn't even hack it in plasma. That's what all the fusion guys say. This guy couldn't even hack it in plasma. Oh my gosh.
Eric Jorgenson: They are building processing systems for the compression and purification of tritium from fusion exhaust. It's something that every fusion reactor will need. Fuel will be the constraint for growth. So, you need a processing system for every reactor. They are some of the only people building one, and I think they have a lead on all the other people. They got a LOI from Commonwealth and Helion. If they can build it, they'll sell a bunch of them. And if fusion turns real, they'll sell shitload of them. If I'm being honest, about halfway through the pitch, he started using the word trillion. And that's all it took. If you say trillion, it could be trillion-dollar market, it could be trillion market cap, trillion cents raised, doesn't matter. I'm in. I talked to some people in the industry who said I know them, like close friends, smart people, high credibility shot. You got to like- It is the cutting edge of cutting edge of like skating where the puck is going in 10 years, but sometimes that's how long you need to develop a technology like this.
Al Doan: What a giant set of balls to be like, no, no.
Eric Jorgenson: On us?
Al Doan: No, on them to pick a problem out there and be like do you know what nobody does very well? The fusion, the breeders. No one's breeding that stuff very good. I can get that. Well, because in our minds, I feel like, especially if I was 20, I would be like, there's smarter people that are- smart guys. GE will fix this if we get- somebody smart is going to do this. But the truth is, the stuff that's coming in 10 years, nobody's making that stuff.
Eric Jorgenson: When you actually take how many hard scientist specialists there are capable of building this and slice it all the way down, how many plasma physics PhDs are there in the country.
Bo Fishback: That's actually one of the things that I had on what are we learning as we do this list, is when you really get frontier with technology, it's really a small universe of people who are building stuff. And so, it's weird, it seems like when you- all of us are kind of like operators, frankly, who like run companies. When you start to look around as an investor and you're like, yeah, I mean, you can't be an expert in everything, but it's also like, oh, well, there's 14 people in the world working on this. And one of them wants to go and build a company. We should probably be a part of that. And so it's like some of these like very frontier things, it is really just a human capital issue. It's like, are you motivated? Are you willing to like go work on it in your garage? And it's like, we got to bet on those companies. Like we got to bet on them, right? It's like a one of- the n of one. And that's pretty awesome.
Eric Jorgenson: I love, as a like- just playing the game of what is good for society, being the capital that is in an absolutely singular, like irreplaceable company of like there's one person who's qualified to work on it or who is actually working on it. Let's make sure that that genius pioneer gets the capital they need to build the thing that like advances all of civilization. I just feel so much better about that than like a hot round for meal delivery startups or anything like that.
Al Doan: Listen, hot rounds and meal delivery sounds delicious too.
Eric Jorgenson: Pork tenderloin sandwiches for everybody.
Al Doan: If I can get that up here right now.
Eric Jorgenson: Hell yeah. So yeah, that's Marathon Fusion.
Al Doan: Is there- are they just zeroed in on this one piece of the pipeline? Or is there like, well, once we get there, we'll start building other things?
Eric Jorgenson: I mean, I think that is a plenty big piece and the foreseeable future. But I'm sure there are many adjacent- I'm endorsing the focus. Yeah, that's a really good one. And the thing, like a new heuristic also is companies that seem like, it's hard to predict this at an early stage, but seem like they are trying to fill in the blank for we are the only company on earth capable of doing X. That is just a really, that's a pretty good moat. And it's a very simple logic problem. So, this is definitely one, not every investment probably that we ever do is going to pass that test with flying colors at the early stages, and I don't think it has to, but it's a really good early filter to be like binary yes, no, are we excited about it? Do we want to carry on? Marathon was definitely one of them.
Al Doan: That's cool. Let me tell you about Portola.
Eric Jorgenson: Tell us about Portola.
Al Doan: This is Quinten Farmer who, Quinten and I, we were both interns in Techstars New York circa 2011. So you go back in time a ways, we were the schlups in there that were moving stuff around. Honestly, I think that intern class has made more money than Techstars. I mean, we've had good returns. So, Quentin went on, like his first thing out of there, he called like two or three years later and was like, hey, I'm starting this company called Even, it's a finance thing, that ended up getting acquired by Walmart. And so like I was super broke and still interning at the time, but I was like, take my $5,000. He's like, I will take your money, and I love you. And it's actually the first company I ever invested in that gave me a return, which was great. So they sold their company to Walmart in a great outcome, like did very good by everybody. Even with my dilution, I was still very happy. And so, stayed in touch with him as he exited because we kind of do this with all the founders, I feel like we're good therapy buddies, where like as you exit and you go through the existential crisis of like, oh geez, what do I do now? Well, like that was- So, I always enjoy getting those phone calls and being good sounding boards for that. And he and I were chatting through a bunch of stuff. And then I'm watching him sort of like go through the process. Cause like when I stepped back from my company, it was a very like I don't know what I'm going to- I'm making brooms in Arkansas. Now I've learned- I was all over the place.
Eric Jorgenson: You had to start climbing mountains for no reason.
Al Doan: And he's the exact opposite where he's like, I've made a spreadsheet of all the ideas that I like, and then I worked through- he was like very deliberative. He wanted to go and do another thing. And he and his co-founders from Even have banded back together and they went after the AI space early on. And so what they're doing and why I love it is they're starting with like AI for kids essentially. It's like make it very simple, like we want to put these building blocks together like Lego blocks and you can build an AI with like, oh, I want a story to be able to do like that and I want it to be able to have this and I want to do this thing. And so you learn about these algorithms and models that you can piece together to do cool things as a 10 year old. I'm like, that's cool. But like, where's the big vision? He's like, well, we're just copying Replit, which- Is that the right company? I think that's right.
Eric Jorgenson: Yeah, that's right.
Al Doan: Replit, where he's like, they built it initially just so like high schoolers could go and learn how to code. And then what happened is because you learn how to code in there, if you can scale up your project and continue hosting and keep it going, they don't want to go and build anywhere else because this is the easiest environment, this is the most interesting environment, and it's got all the tools they need. And they made it easy for a generation, and that's paying huge dividends, like real sites run on Replit now. And so they're trying to do the same thing for AI in that and say, look, we're going to put all these models in here. Our job's going to be to go and box them up and put them in ways that kids can play with them. And as they build in here and build cool stuff, we'll just follow them along and let them continue hosting and have grown up plans that they can move to and host real projects and solve real things in here. So great vision, very excited about what they're building and the sort of caliber of the team that we're backing to go after it and yeah, they're fun.
Eric Jorgenson: The design is amazing. It's quite an awesome team. I love when you see a team that's like already been through the whole cycle together and they're like, look, we put a couple million in the bank, like we're good, this is the big swing, we know we love working together, reduces some of the risk there.
Al Doan: They were backed well. It was one of those where he's like, bro, I know I said we'd get you in at this much, we got to go to- I was like, I am your friend. How dare you cut my check down. I texted Bo, I was like this hurts my feelings a little bit. He's like no, it's good. We're excited. It’s a very sought after round. They were the hot ticket in town for a minute.
Eric Jorgenson: You were an early commit and you got the cram down.
Al Doan: I know. Yeah, yeah, yeah. We were early. He's like…
Eric Jorgenson: That's the first time we've ever had a like, hit an allocation ceiling in a round I think.
Al Doan: Oh really?
Eric Jorgenson: Yeah. And I don't think anybody else has been like, would have stopped us from investing more or certainly has like given us a lower...
Al Doan: Well, because of our reputation and they want all of our money, but those big guys come in and they want to write the whole check and nothing but the check, so help them God.
Eric Jorgenson: Yeah. Well, and they got that second time founder kind of premium too.
Al Doan: Yeah. Well, like you said, the second time founder, they definitely get a premium, but that whole team, when you get the team that like knows how to work together, it's very juicy. So we were excited. We're excited to be a part of it and see what they build.
Eric Jorgenson: They don't have a product launched yet as far as-
Al Doan: So they have some stuff in like test flight and stuff that like my kids play around and we open it up every now and then. And it's just like story building right now. It's like, hey, make an image now, tell a story and have them do this. The kids are like, oh, and then have them do this. They sort of build this Mad Libs.
Eric Jorgenson: Your kids are young. They're interacting with it at a very-
Al Doan: Three and five, yeah. We're early to it, but they enjoy it. It reads the story to them after they write it. It's one of those, but there's a lot of those, but that's not the product. That's the product that the product can build. So, it's been fun. But yeah, I think you can go to the website, you might be able to sign up or something.
Eric Jorgenson: Yeah, I don't know how much of what we have seen is actually public yet, but the vision for the whole ecosystem is amazing.
Al Doan: Don't tell anybody, including that [inaudible 21:04]. We’re spoiling the beans.
Bo Fishback: This is why the allocation was crammed down.
Eric Jorgenson: They knew they were letting a liability.
Al Doan: They don't send as many updates now. I don't know what to do.
Eric Jorgenson: Yeah, that's a cool one. Very talented team. I think it's an interesting like, it's been really interesting to see everyone's like, AI, okay. And we have a bunch that are how precise can you make that new AI enabled shot. I think that's a really- there'll be a whole era of really interesting companies in that. And this is an interesting one, like maybe the competitive advantage, like the platform, new AI opens up the opportunity for the space for a new type of company to get built. But the people with the advantage are actually the ones who've been like operating very similar companies before and have the design and the software and the distribution skill set to like go be the first to get it deployed.
Al Doan: Man, it's fun. I like this job.
Eric Jorgenson: Yeah, this is an awesome team. Like four really solid people from the very beginning building like crazy.
Al Doan: Yeah, excited to get the updates here, man.
Eric Jorgenson: Cool. I meant to shout out Patrick Finley also for introducing us to Marathon. Let me end cap the Marathon.
Al Doan: I'm sorry, we are done with Marathon.
Eric Jorgenson: I'm not done with Marathon because I need to thank my boy Patrick Finley for the hookup. He's the man. I love him.
Al Doan: Anybody else you love? No, Patrick, listen, thank you. Also, Nelson Mandela was great.
Eric Jorgenson: I'm a big Ryan Reynolds fan.
Al Doan: Big Ryan Reynolds. I want to see the new movie. Wayne Gretzky, the real OG.
Eric Jorgenson: Just naming people that we like. Emeril Lagasse, I kind of miss him. I don't know what he's been up to.
Al Doan: But mainly, Patrick Finley.
Eric Jorgenson: I also made a note to come back to something that I think is a good like distinguisher of people in the investing space. Like founders drag investors all the time, and there's a lot of different kinds of investors, a lot of people playing very different games with good and bad connotations there. I think it's interesting that you and I have very similar stories of scraping together our first probably not technically legal investment to put it into a friend's company that we were like, oh man, I love this dude, I think this is going to be great.
Bo Fishback: I think you did your first one by giving me money when I was investing in another company. And you were like, can I just slide in on that or whatever? …Bo, you need to invest in this company. I was like, okay, cool. I'll invest in that company. And also, can you please slide my 5,000 in with your money because I can't do it. And I was like, sure. It worked out great. It was hilarious.
Eric Jorgenson: And that company worked out great.
Al Doan: Which company is that?
Eric Jorgenson: It's Density. Which is a billion dollar company. Their last fundraise was amazing. And Andrew's a good friend, and even he was like, I don't need your $5,000 check. How about we talk to Bo? It's like, all right, yeah. It works out great.
Bo Fishback: He even came to my house.
Eric Jorgenson: That's right. He flew out with a Blues Brothers suitcase handcuffed to him with his sensor prototype in there. And he's like, look at it. Very impressive…
Bo Fishback: Look at them now. Yeah. It's pretty good.
Eric Jorgenson: It's gorgeous. But I do think there's a whole class of people that have never bet their own money on a company and they got a job as an associate and somebody else raised them the money. It's this very intellectual exercise that is far from the moment of like, this is a good chunk of my savings and a painful amount of money, but I'm still going to put it in this friend’s startup and see the feedback loop from that firsthand personally in my account.
Bo Fishback: Yeah, it's interesting. You and I were talking about it on the way up here a little bit, Eric, but I think, on the way up to beautiful Hamilton, Missouri, but I think that's a- you have like one perspective on early stage investors and even later stage investors when you're like operating a company and running money and like raising money. When you become an investor, you all of a sudden get like quite empathetic with some stuff that you see on the investor front that was always annoying when you were a founder, but you're like, I kind of get it. Like I get it now. But it's funny listening to you talk about like the Techstars intern class. I feel like we have a cool thing here where like what would be really awesome is if a bunch of our LPs who are like very small LPs go on to be fabulous investors someday on their own. Like, oh, well, I was in the LP class at Rolling Fun. And it was 5,000, 10,000 a quarter or whatever. And like now I'm writing big checks and I've invested in 10 unicorns and all that kind of stuff. And it's like there's just so much education on the investor side to do that is actually really helpful to know on the founder side. That's like a fun, that is a fun thing for us to get to see like on the other side, I think.
Eric Jorgenson: Yeah. A lot of the conversations we have with founders that they find most helpful are, hey, here's what an investor's perspective is. Like, here's the game theory. Here's what they're optimizing for. And so many times founders are like, oh, like that's the board from their point of view.
Al Doan: I actually said, we were talking to Ouros, one of our portfolio companies last time we were together- Yeah. That's his name, but the company is… But literally, Bo gave some advice to him. I was like, man, I wish I would have heard that advice midway in my company, like that's exactly what everybody needed to hear. Where it’s just like, here's the strategy, here's what you don't need to worry about. Like you can go from here to here. This is how you need to think about the money. I was like, man, I wish I would have had like us three sitting around a table trying to help me solve a problem when I was like doing a thing. It's incredibly meaningful.
Eric Jorgenson: Yeah. And when you think like all the shit that annoyed us as founders trying to fundraise and it's hard to not- It's interesting to see which of those things you actually start doing yourself and which you are better at. Because some of it is just like, no, that's like this is the game of mitigating the risk and there are risks that you see as a investor or have to deal with as an investor that like a founder isn't in there- like it's not in their perspective, it's not in their field of view, and nor should it be, maybe. But as much as we can try to bridge that gap and open that conversation, hopefully it's helpful for people to learn to invest and for founders trying to figure out how to fundraise.
Al Doan: Yeah. Look, we're doing this for you guys, the listener.
Eric Jorgenson: It's not for us.
Al Doan: We don't even, we don't even care, but like for you.
Eric Jorgenson: I think one that people have been very annoyed about on Twitter over the recent thing that like in some ways has an answer to it but in some it isn't is like everybody waiting for a lead. Like how many times have you each heard come back to me when you have a lead?
Al Doan: That killed my last round on Pretzel when I was trying to raise my last round. I was trying to raise like I think two or three million dollars, and I had like one point something committed of people that are like, as soon as you get a lead, let me know. And I'm like, you're the lead, just give me the money. Wire it in, and I got the lead. We're fine. But it's like, yeah, it's that same thing where everybody's like, yeah, yeah, I'm down. Call me when you got a lead. Call me when like most of the work is done and then I'll like jump on. Gosh. Which, I mean, honestly, as a founder, I was very critical of, and as an investor, like I get that, I mean, we're not leads. And so, there's a little bit of like, hey, I want to give you our money, but I don't want to give you 50 grand if this company doesn't exist on Friday. So like, can you pull some stuff together? And then we're in. We want to be a part of it. Like, count us in for sure. But I kind of get it a little bit differently now that we're on the investor side, but yeah.
Bo Fishback: I think it is one of those things too where we do not fit into a bucket of advertising ourselves as a lead, and we are not a lead. But there are actually a lot of funds out there who essentially market themselves as somebody who you come to early and talk to about being a lead. I mean, I tell founders frequently like, hey, let me see the list of folks who you think you should raise money from. And smart founders have a very nice spreadsheet, and there's 172 funds on there. And then I'm like, okay, can we first eliminate everyone who hasn't led a round in the last year? And then there are 14 names left on the list. And it's like that's a really easy test to say like I'm sure they would be great investors. If you don't have a lead yet, do not waste your time on people who haven't led a deal in the last year or whatever. And you save yourself a ton of time, but you don't actually know that because so many people are like come to us early. We'll lead you around. We have this big a fund. And then you find out it's already all allocated. Oh, we're not even allowed to lead a seed round. You have to be- And it's like if you can know that from the other side early on, you save yourself a huge amount of time. Like it is a big quality of life upgrade to be able to focus your effort in areas that are worthwhile.
Eric Jorgenson: And that's the momentum shift too. Like we just participated in a fund raise that was like a slow grind. And we said early like we love this, we commit, but we can't wire money until there's a consensus on the round.
Al Doan: Well, the move was like I had to go to work and help them find a lead. It wasn't like, hey-
Bo Fishback: Which is a huge one actually. Like, we're not going to lead this. We want to participate. If you need a lead and we can help, we'll help.
Al Doan: Well, we got on the phone and we helped them solve that thing. And there was a couple of months of grinding through it, but like bunch of intros, how did these ones go, here's strategy around this. And we got it together, which was great because we wanted to write the check, so we needed to help solve that problem for them. It's sort of how we viewed it.
Eric Jorgenson: And it went from four months of soft commits, circle backs, to as soon as they had a lead, all of a sudden it was oversubscribed.
Al Doan: They asked the same question. Can we push you down? No, you can't push us down. No.
Eric Jorgenson: So ungrateful. I think that is a big- it's interesting to unbundle the roles that a lead, like one, they set the terms, two, usually the largest chunk of capital which de-risks the smaller checks. I wonder if there are any other super key things. Maybe as a founder, you can do a first close and be like, look, you don't want to write an isolated 50 to 100K check, probably, at least not without different terms. But if you get 500 at once-
Bo Fishback: For complete rounds though, also, think safes and convertible notes and stuff have made this a lot easier to get going without it where those become generally accepted documents. But honestly, for a real lead in a real price round, the transaction calls are non-trivial, and they roughly get fronted by the investor and then paid usually by the company. But that's a big pain in the ass. Like if we had to be in the midst of papering every priced round that we did, our legal bills would go up quite a lot. And you just don't- it is an underappreciated but annoying thing that has to happen in the process.
Eric Jorgenson: And it's a lot heavier diligence and all of those things, which it is a totally rational thing, super annoying from the founder's point of view, which I appreciate. So, you can get early commits from investors, hopefully find people that have led rounds or who can credibly help you find a lead investor and actually be like a signal with their early commitment, not just like a piddly like yeah, sure, maybe.
Al Doan: That's what was different with our- because normally if you have an investor, it's like, I don't want to invest, but I'll intro you to somebody, it's very bad signaling. Like, don't pass on me and then intro me. That's not going to get me to success. But we're like, hey, we're committed. You should take a look at these guys. And that was a much better intro for me to make around than anything else I could have said.
Eric Jorgenson: Is there- like if you're a founder doing the research on who's led rounds recently in the last year, like how can you tell who's a lead and who's just a participant? Like a lot of times it's just a portfolio page.
Bo Fishback: You can figure it out. You can figure it. I mean, honestly, things like Crunchbase are helpful, but there are places to go where you can figure out who the leads are. The other thing is like, honestly, it is where having a good network of CEO friends and founders is incredibly helpful to say like, oh, hey, they're invested in this company. Do you know who led it? And then you can connect them and ask. What I would say is your time is really well spent doing that if you're raising because it's really easy to spend a lot of time and diligence chasing stuff down and then realize that, oh, this was never going to happen anyway. And that is super frustrating, which is why like transparency wins, like transparency wins in that stuff. It's like, hey, look, certainly at our fund size now, we're not going to lead. What you want from lead investors is actually different than participating investors. Like for us, you want to know that like we're going to help if we can help and we're going to not be a pain in the ass, and that is great. When you're talking to a lead, you want to know that they have a really independent conviction about your idea. Like it is true that a thing that I always hated when raising money is like the power of social proof. Like, why do you care so much what other people are doing? Just shut up. If you like it and you like me, let's write a check. And the truth is there's some- On the other side of it, you're like, well, gosh, all of these smart folks are investing all of- there's multiple connection points. Like you can't help it if you're in our case, in our position now where it's like that tilts you in the favor of doing it. From a lead, it's a little different. If you're a lead, you almost can't rely on some social proof, so you need someone who is all about independent conviction, and I'm going to actually write a check to you when 10 other people have passed. If we had a much, much bigger fund, which we may or may not have someday, for lead investments, that would be the bar of, dudes, we're not doing this without great, great conviction. And with this, it's like, hey, we love the person or we love the market. Sure, there's some other great investors in there. Like you can get to conviction quick and then you can make a lot of bets. But that is a different strategy than if you're whatever floodgate they're going to try to do, 13 investments a year and all of them they're going to lead. It's just that you're in a different seat.
Eric Jorgenson: And it is a little bit of a- if you're going to put a million bucks into a round, it's like we're going to spend 20 hours with this founder, like a lot more time, a lot more effort into like de-risking or just super, super deeply understanding those things. Yeah, I think that's a very interesting piece of-
Bo Fishback: I feel like I've learned a lot in the last two years about like the psychology of placing a lot of bets and what are the things where we as a group are like this is a no brainer versus this is an insane idea. And that is like a really, that's been like a very fun part for me is like we for sure in the last year have had companies where we looked at it where one of us had an enormous amount of conviction until we had a conversation about it, and then the conviction was just squashed. And where all of us were kind of like the opposite of like I don't know. And then one of us talks to the CEO, talks to the founder, whatever, makes a trip to meet them or whatever, and then comes back like, guys, this is one we’ve got to do. And I don't know, that has been a very fun part of the learn- Like, I feel much more comfortable today than I did a year ago about us placing lots of bets on founders that we love, on frontier technology in ways that we're like, I don't know enough about it to feel good about it. And then the three of us spend time talking about it and talking about why it makes sense to build AI tools for 12 year olds. And then it's like, oh, someone's going to have to build that. And actually you're building a long-term distribution path to market in an area where there's not that many smart people building things. And so, you get- I mean, those are just things that like really build conviction when you've got a group of people who you respect and are smart working on it together.
Eric Jorgenson: I like imagining how our history, the history that we're writing today looks 20 years from now. You can imagine that the path to being a really, really, really incredible deep-rooted fund comes from people who have first invested their own money, then did a really broad but high effort search. They got a ton of reps with small checks. And then through that, developed even more sensitive radar and conviction and credibility to then tighten it a little bit more and do even larger checks or then start leading rounds or adding partners, deliberate expertise or finding ways to scale the deployment of more capital to early stage high tech founders in a bunch of different ways. But I feel like the thing that we are doing now is resulting in a really, really high rate of learning, which feels great. Especially in a place of some slow feedback loops... It's a little hard to learn really, really fast when it takes 12 to 24 months to...
Al Doan: Well, thankfully we had crypto that helped accelerate a bunch of that. It's like, oh, a lot of lessons there. Consumer stuff.
Bo Fishback: I think that's how it works, though, right? Like you have a crypto, then you have an AI thing. And it is like one of the things that like as there is more technology, whether fusion- like there are all of these buckets where it's like the faster all of the technology gets adopted, the more of those there are. And it's like if you don't have exposure to them by the time you want it, it's too late. And we are getting lots of exposure to all of them as they're being born, and that's cool, man.
Al Doan: That's a really good point. And like everything- across the board in every industry, we've had ones that are like really cool until they're not. And I think that's the hardest emotional rollercoaster for me to go on because I'm like we're geniuses, we're pre rich, we killed it, we killed it, we killed it. And then all of a sudden, we get the email, it's like we're pivoting, everything's broken, nothing's working, we're out of here. And it's like oh, man, that was so much wind in my sails. That emotional rollercoaster from an investor standpoint has been one of those that I didn't expect to be as difficult to still enjoy what we're doing as it is sometimes when you can write- on paper, you can know that you're going to have to be wrong seven times to be right the one. And it's like when that lives out in reality, it's brutal. It is brutal to be wrong seven or eight times along the way to get really right that one or two.
Eric Jorgenson: And the errors of omission and the feedback loop of that too…
Al Doan: When you pass on one and they're like, listen, you suckers.
Eric Jorgenson: Yeah. And then become a viral phenomenon on Twitter six months later and you're like, fuck. And then you got to remember, zoom out, and be like it takes 15 years to build a great company. Just because somebody is getting a lot of attention on Twitter does not necessarily mean you made a wrong investment decision. But even if you... The thing that bugs me, the thing that keeps me up at night is the ones that you love that we just didn't have a capital to do where you’re like I have high conviction…
Al Doan: Truth Social, is that what we’re talking about?
Eric Jorgenson: Did we have that opportunity?
Al Doan: It was so hot on Twitter. Everyone was talking about this. If I could go back in time.
Eric Jorgenson: Yeah, I would love to be in a place where we are shooting every shot we think is worth shooting, like even with small checks. We're not there yet, and it's just painful to see what are clearly great opportunities.
Al Doan: That is one of the worst ones where like, hey, we're here. Love you guys. You got two weeks. It's like, can we commit now and send you money in three quarters?
Eric Jorgenson: But as the kids say, skill issue, like more-
Al Doan: They say that? Skill issue? I haven’t heard that. My kids aren’t old enough.
Eric Jorgenson: Skill issue.
Al Doan: Oh!
Eric Jorgenson: All right, we got one more. Speaking of genius founders, got one more portfolio company to get through for the Q4 update. So, Atomic Industries.
Al Doan: Oh, we love that.
Eric Jorgenson: I'm so excited about this one.
Al Doan: Skylar?
Eric Jorgenson: No, this is Aaron Slodov.
Bo Fishback: It's just so frontier-y is what it is.
Eric Jorgenson: Yeah, I mean, just the founder alone is like Midwest, grew up playing D&D. Like, you had me at-
Al Doan: You've described everybody I know.
Eric Jorgenson: You had me at D&D. All right, so you've-
Al Doan: He now works at 7-Eleven and wishes he could get a job where he could just stare at the wall. That's most of my grew up in the Midwest, played D&D a lot of times.
Eric Jorgenson: He's now a level 12 mage.
Al Doan: Got into Magic the Gathering, sold his cards, made a fortune. That's my guy.
Eric Jorgenson: Studied physics and engineering, went to work at Google X Moonshot Factory.
Al Doan: What a great job out of college. I want to go work at Google Moonshot.
Eric Jorgenson: I wonder if it’s as fun as it seems like from-
Al Doan: It feels like Rob Dyrdek's Fun Factory to me. That’s what I’m imagining in my head where it’s like let’s do a backflip today.
Eric Jorgenson: Internet blips, okay, let’s go. Then he did some AI software engineering. And the company he is now starting, which he is a few years into, this is definitely like later stage than some of our other investments, but we still feel quite good about it. It was a very big seed round. It was almost a $17 million seed round. So quite big.
Al Doan: You need money to get started. That's what they say.
Eric Jorgenson: Well, this is very much like the fully vertically integrated version of this company. All right, so it's AI assisted tool and die manufacture. So for those who did not grow up in the Midwest near factories, if you're going to manufacture a bunch of shit, you need a die mold and you need to tool it. And it's a really expensive manual iterative process that is like this blue collar part science, part craft, and it's expensive and it takes months of trial and error to get an exactly nano perfect mold that you're going to use millions of times to manufacture something. And you have to run coolant through it in this really specific pattern to reach the optimal speed, temperature reduction, to speed up this whole factory line. It's a real bottleneck and an expensive thing in the manufacturing…
Al Doan: If you would have played D&D more, you guys would know this.
Eric Jorgenson: And Aaron's insight was that this is a bounded problem in physics, and with a ton of compute and the new AI stuff that's coming out, you can solve this in a fraction, like less than 10% of the time. And that drastically reduces the cost, that speeds up manufacturing lines all over the place. So let's get a shitload of compute and let's get the factory that we need to build this thing. And I think early, early conversations with him, he's like, I'm not sure if I'm going to sell this to every tool and die company in the world or if I'm going to become the biggest tool and die company in the world. And either way, this is a big company. I was like, okay, cool. And part of this round is buying an old tool and die manufacturer facility in Detroit. So the headquarters are in San Francisco, Aaron's there, but he’s building this, buying and retooling this factory in Detroit, which is so cool. And so, it is very kind of- to me, it fits in the sort of Tesla Hadrian like software and hardware engineers descending upon this factory and building start to finish the thing. So, they'll be selling die molds directly to customers. Toyota is a huge investor because they spend billions of dollars a year on tool and die. So I think very strategic investors, huge support for them, like incredibly hot round.
Al Doan: I didn't even know Toyota went in on seed rounds.
Eric Jorgenson: I think maybe when they're $17 million, they do, and they're going to spend nine figures a year maybe, who knows. It's a really exciting company. It's one of those things like you've got to be so far into this kind of supply chain to even know that this is a problem, let alone have the skills to solve it at this level.
Al Doan: Yeah, the balls to say, this industry that's been around for 200 years, I've got a better way. I'm going to go and make this. And then even the concept of like, I don't know if I'm the tool and die company of the future or if I will sell to everybody else. I might murder the whole industry and take over. We could support what's there. I haven't decided.
Eric Jorgenson: It is a huge vision, but a very specific one. He's attacking it. It's a really very cool company. What is exciting, I think this hits our 100X underwrite, even if they just take over the tool and die market. Even if that's all they do. But there are so many, the skill set that it takes to win that market, there are so many adjacent opportunities in manufacturing that are also enormous, enormous markets. And the team that they're building and the vision that they have and the skills that they will have, I think, is just going to be... I think the upside potential on even the successful version of what we plan as we invested in it now is still insane.
Bo Fishback: Oh, yeah. This was a no-brainer for us. The only thing you would change about it is like make it earlier and cheaper. But like this is one of those things that just requires a lot of capital. But it's the right people. It's obviously a compelling market, the intersection of technology that's going to keep changing it and they're on the front end. This was like directly in the wheelhouse of the checks that we would write every time. I mean, there's just honestly like my real take on this is like I wish there was like a thousand other people building things like this. And it is like the real rate limiters, like human capital. It's like what it is. And so, yeah, this will be a fun one to see play out.
Eric Jorgenson: Yeah. I'm psyched about this. And because it's later stage, I do think we're going to see like that hockey stick come out soon. Like they're going to, I believe, be selling these soon and we’ll start to see a market feedback loop.
Al Doan: Really? Like this year?
Eric Jorgenson: I don't know. I don't want to commit them to that from my perch of ignorance.
Al Doan: Let me say it, by Q4, they'll be...
Eric Jorgenson: We'll be right back after I break Al's mic.
Al Doan: This is not investment advice, but you guys should put all your life savings...
Eric Jorgenson: Yeah. So that's the portfolio for Q4. If you were subscribed to us in Q4, congratulations yet again on being pre rich. You own a piece of Portola and Marathon Fusion and Atomic Industries.
Al Doan: What are you, geniuses? You guys.
Eric Jorgenson: If you weren't subscribed in Q4…
Al Doan: Losers.
Eric Jorgenson: Too slow.
Al Doan: Yeah. Get in on Q1. Another hot shot.
Eric Jorgenson: Your opportunity is now Q2. You've already missed out on Q1.
Al Doan: Oh yeah, screw you guys.
Bo Fishback: No, I think we should pause and then stop and then do Q1.
Al Doan: Oh, this is the end?
Bo Fishback: I think it should be.
Al Doan: Until next time, everybody.
Eric Jorgenson: We'll wrap on Q4.
Al Doan: For Bo and Eric, I'm Al.
Eric Jorgenson: We'll be back very soon with another edition of Rolling Fun.
Bo Fishback: From the same spot, like in three minutes.