Hey again BFI,

I've always found these threads extremely helpful so I'd love to pay that forward. This will also save me the time of having to have the same conversation with 50 different friends/acquaintances I've met through poker. I know a ton of people struggle with the question of what to do after poker, and I myself struggled a ton with it.

A lot of you participated and gave good advice when I started this thread late last year about feeling like I was wasting my life. I'm happy to share that my search has finally led me somewhere I'm excited about. I'd like to personally thank a few people who have served as great mentors and contacts from the poker world--

Jason Strasser, the first guy I ever reached out to who has been extremely helpful in finding my path. I saw a lot of similarities but I was just younger. Being able to talk to someone who can talk from experience was a very useful exercise for me and I really appreciate it.
Ezra Galston (EzMoGee), another guy I met through here who helped me find my way. He has a great thread here about working in VC if you haven't seen it already.
Galen Hall, again incredibly helpful advice from someone a lot further along than me. Probably the best advice I could ever get on how to sell my story and skillset and tremendously thankful for that.
LozColbert, someone I had met strictly through the 2p2 thread I created and started talking to a lot. Been really helpful in a variety of ways, and very thankful.

Long story short-- I've got an opportunity ahead working in venture capital (I don't want to say the fund name because I don't want them to get flooded with poker players' CVs).
-I don't really know if this is my future path or just the next bullet point on my CV, but nevertheless it is nice to be excited about work for the first time in years.
-Will be out West in LA/SF. Feel free to get in contact if you're local to either.
-I'm still planning to play the main event
-One of my friends suggested starting a blog to document my transition. I will consider that.
-I think I will always play poker on some level. I like it, but that doesn't mean I want to play every single day for several hours. It's fun to compete and stay sharp sometimes. Heck there's even a chance I could be full-time again but I hope not.

So feel free to ask questions or get in contact. From the deteriorating landscape of poker with monopoly power and the rise of software, to moving in a new direction, there is a lot to talk about and hopefully some of you, who have been toeing the line with leaving, left already, or at least trying to be less reliant on poker in the future, will find this helpful.

Evan

There's not much meat to this post to get people interested imo. Maybe talk a bit about how you got the job and what you'll be doing? How many interviews you did? What your pay is?

Hey,

Yeah I agree this is a great starting point.

I got the opportunity through networking. It started with cold contacting someone and exchanging some messages from there, later meeting in person and having that go really well. Doing some light analysis assignments (looking at pitch decks, etc). Meeting again in person and doing more analysis. Then doing a large analysis assignment that had dozens of people gunning for it, including the typical types of people who make it into VC with perfect CVs. I then attended Collision Conference in Las Vegas earlier this month and sat in on meetings with startups.

There was really no formal interview process-- just analysis assignments and less formal meetings where you're still talking intellectually and about your experience and skill set, but it's more social than a normal situation. I think this is very fitting for VC, as ultimately a lot it is about making connections and doing good analysis. So talking business in the same kind of setting you might meet another investor, entrepreneur, or whoever else seemed right. Also note, this is an early stage fund, so there's a lot less that can be done on the modeling side of things compared to a late-stage fund.

As far as pay, I am committed for the summer and will not be making the kind of money to generate wealth, but that's not important to me, especially at this stage. I am 100% focused on learning as much as I can about the business. If I continue beyond that (with this fund or another), there is plenty out there on the internet about VC compensation.

Another thing I wanted to say was, a lot of people are really scared of cold contacting people. Just do it. You have nothing to lose. Experiment with different approaches rather than sending the same email to 50 people. If you're smart and hard-working and you can convey that to someone, eventually your message will reach the right person.

Fascinating thread and update, I hope it gets some traction. Congrats on your success. If I was going to work, one of my dream jobs would be doing VC in the Valley.

A couple of dumb questions. Is there much analysis you do that isn't refined common sense/standard business research? Does your firm use any sophisticated mathematical models?

How important is it to be well connected in the startup world, when you're in the lower levels of a VC company?

Is it a small world? Does everyone know everyone?

Thanks for doing this, 2+2 really is a great source of information!

Are considering getting VC sometime in the future, had some meetings and we had one verbal offer which we've decided against for now.

What I'd love to know is when comparing two revenue models:

- One off cost product
- Subscription product

What are considered good typical profit/revenue multiples on an exit or even just for evaluating a VC offer? I've heard that one off cost models should be aiming for ~6x and subscriptions typically will get 12-15x. What are the main factors that are taken into account (retention of subscriber for example). And will this differ in the UK versus USA?

Also, is there any opportunity to use VC's as a partial exit? Does this ever happen?

Congrats Evan.

I am a huge believer in cold e-mailing/contacting. As someone on the receiving end of many dozens of cold e-mails a week, it is so refreshing to get thoughtful e-mails from people. I put a lot of content out there - on my blog, via Twitter, I write articles for a variety of publications, etc - anyone who takes the time (I'd imagine 2-3 hours) to read through my stuff and send me a thoughtful note, with concise, directed questions based on what I've said, I try to respond to.

Coming out of poker, I had basically zero network. And so I spent a lot of time reading/getting smart and reaching out to ppl I find interesting who were not mega-celebs in my industry. The top 1% are simply too busy. But the rest of the top decile, top 2%-10% are generally free enough & hungry enough to engage.

In fact, the firm you're at - my friendship with your close contact there - started when I read one of his blog posts & wrote him a thoughtful note addressing it directly.

I spend between 45-90 minutes per cold e-mail. Researching, crafting, making it genuine. It is a numbers game, but if you treat it like such, people will smell it. If you're sending mass e-mails and actually get responses, then you're screwed. Because the only people who will respond to generic, mass e-mails, are people with too much time on their hands anyway.

Ezra

First want to say that I anticipate being much better qualified to answer some questions in the near future. Therefore if I skip one or some, the reason is I plan to revisit it soon.

A lot of common sense/business/math, but it's also important to know how to question an entrepreneur. Identify pain points and ask questions about them, and see if they really know their **** or are full of ****. This is obviously non-quant analysis, but extremely important especially in early stage where modeling is less realistic and therefore less useful.

Network is very important. Helps with deal flow, helps to get other people's opinion on things/ideas.

I'm not really sure about this. There are hundreds of funds, so it's definitely not a case of "everyone knows everyone".

I'll be revisiting these questions.

Thanks!

I couldn't agree more with this. The more genuinely interested and knowledgeable you seem, the more likely you are to get a response/meeting etc. If you send the same thing out with people/firm names changed, it is pretty transparent what is going on.

Great Post wish I could upvote.


@ 2 Shae: Congratulations! Out of interest why did you choose VC?

Thanks!

I've just always been fascinated by it since I took a class about it in college. I also spent a week visiting a hedge fund and that was cool game but it was enough to know I didn't want to do that day in and day out. I especially like in VC that when everyone does their job well, everyone makes money-- VCs, LPs, and entrepreneurs.

What was it about HF's that turned you off?

The inability to ever escape it, especially if you're the one calling the shots. Strasser talked about this on Terrence Chan's podcast-- waking up at 3AM Hawaii time to check on the markets while he was on vacation with his family.

Can you talk a bit about your current role, and how you got started in this industry? Are you evaluating companies seeking funding to determine if they are worth the investment, or trying to find investors for ideas your company has already vetted, or something else? I have been programming most of my adult life, but mainly in corporate environments and have often dreamed of finding a good startup to work for (or start) but have never really acted on it. This side of the industry is something I really need to learn more about and is one of my regrets that I haven't put in the time to learn more about it.

The former-- evaluating companies seeking funding. Monitoring companies we've already funded, etc. Some of this is evaluating pitch decks we receive, and/or hearing in-person pitches. There is also an element of it that is pro-active. Not every startup in the world sends their pitch deck to every fund, so if we see something we like that fits in with our investment thesis, we may open up the line of communication ourselves. The investment thesis itself is pretty specific, so there are plenty of companies that are easy to filter out, often because it is "too soon" or "too late".

Also higher level stuff like analyzing database of existing portfolio companies.

I'm sure you're probably aware, but if you look on www.angel.co you have a pretty efficient way to look at/apply at startups that are hiring.

Or if you ever get excited enough about a certain startup, you can always be pro-active and contact them. Cold emailing has already been discussed ITT and I suggest following Ezra's advice wrt that.

I just read the original thread and found a lot of valuable advice in there. I really like the idea of a blog; it surprises me how few poker players publicly document their transition away from the game. I guess a lot of us end up spending a considerable amount of time after poker just floating around before we settle on a specific direction.

Are there any books/blogs/resources that you have found especially helpful or inspirational since making the original thread?

Good luck. I'm looking forward to see how things progress for you.

Definitely curious to hear input from others on if there's a difference in multiples for exit vs. VC. I'd assume that the typical VC deal is a much higher 'multiple' (mostly because it's going to more potential based) than an actual exit valuation.

I'm assuming your example multiples are based on profit? From my experience in a SaaS business, it seems like multiples are WAY more often based on revenue than profit, mostly because most startups focus on top line revenue and don't usually have much profit.

From a recent valuation report I saw...

For public traditional software companies (up front purchase + annual maint), it seems like the average EV/Revenue is around 3x. This is impacted by the sector of the company (lots of sectors are 2x or lower) and also certainly the actual specifics of the company (growth, profit margins). As a benchmark, the average valuation here was 15x EBITDA (again very dependent on the specific company).

For public pure play SaaS companies, the average EV is around ~5.5x revenue. The average EBITDA valuation for SaaS is more than 50x, which is pretty crazy. It just shows how valuations are much more driven by revenue (and growth) as opposed to bottom line. So many of these public companies don't generate any profit at all. The profit numbers also get really grey when you start talking GAAP vs. non-GAAP.

Just to reiterate, the actual numbers are all over the map...it's so dependent on the company's sector, growth rates, etc. Also, for people like you and me that are privately held and small, you can't necessarily expect to get the same multiple as a publicly traded company (unless you're growing like crazy!). You also mentioned retention (churn)...that's clearly important and there's a whole host of other SaaS metrics that you'll probably get asked for if you start looking at VC seriously (MRR growth, acquisition cost, etc.)

Your last question - there are definitely firms out there that are interested in providing partial exits for ownership. We actually got a call from a firm last week that does deals where they buy up 70-80% of the business, leaving founders in place to manage the business with the other 20-30% still skin in the game for incentives. Pretty interesting.

Hope this helps or at least generates some discussion.

Clay Christensen: How Will You Measure Your Life

Ben Horowitz: The Hard Thing About Hard Things

Simon Haas: The Book of Dharma: Making Enlightened Choices

Someone else in the thread recommended the meditation app Headspace, which I thought was really good. I'm personally more a fan of doing meditation in the form of yoga classes, as it allows you to also get some exercise plus being around other people in the class is a type of commitment mechanism. Plus I'm kind of bad at stopping my mind from racing and find it easier when there's a "more natural" distraction of having to do something other than sit still.

Cottonseed posted this link about "living on an external scorecard" which was helpful for its wonderful message.

Also focusing a lot on workout/diet has been a great source of personal progress and inspiration.

I'm sure there is some other stuff that I'm not thinking of off the top of my head, but may re-respond to your post as I think of them. Also feel free to PM me-- I recall reading some of your posts about leaving the game and curious to see where you're at now and what you're up to.

Evan

+1, read it after the rec in previous thread, loved it

Cool thread.

Good luck Two. Looking forward to see what comes out of it!

That's awesome man, congrats. That Jason is one nice guy

Good luck man. Although right now I'm more interested in the hedge fund industry, I hope to make a similar step in the next few years

Would greatly appreciate it if you kept giving updates in this thread

Thanks!

Sure is thanks!

Will do.

Just settling in on the West coast. We had our first meeting as a group last night-- some nice steaks and wine as a celebratory kickoff. Will be diving in shortly.

Okay, this is interesting. On that topic, did you make a record of your transition out of poker? (I'm making an assumption that you had)

If I'm correct, didnt you make a couple of leggo vids a couple of years ago? I'm always fascinated as to what old video makers are actually doing when they disappear from being v active in the community.

What are you doing now Mossberg? (I know it's two shae's thread but he's already told us his plans, and where his head's currently at)

I'm still trying to find my new path. Since I don't have any great ideas or opportunities jumping out, I'm focusing on building what I see as a valuable and future-proof skill-set. I don't want to hijack this thread, so I'll answer the rest via PM.

How would you/company you're working in rank following by importance, when you're thinking about investing in start-up?

Userbase
Product/service
Financials
Team
Execution
Userbase growth

Feel free to add anything to list, if I missed any major things that you look into before investing.

What is your degree and educational background?