# VC10X - $13M to $2 Billion in 18 Months - Marlon Nichols on Conviction, Pivots & the Pipe Bet

An episode of [VC10X - Investing, Venture Capital, Asset Management, Family Office, Wealth Management](https://invisiblenetwork.ai/podcast/1632806986), 28 Apr 2026, 37 min.

Audio: https://anchor.fm/s/a453ddd4/podcast/play/119105770/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2026-3-27%2F422949513-44100-2-c151b40c6c468.mp3

Marlon Nichols is Co-Founder and Managing General Partner at Mac Venture Capital — a seed-stage firm that closed its first fund at $110M with institutional backing from day one and has grown to over $600M in AUM across three funds. In this episode, Marlon breaks down the fundraising arc that built Mac VC, the four-part founder framework he never compromises on, and the inside story of two portfolio companies — Pipe, which went from a $13M valuation to $2B in 18 months, and Gimlet Media, his early bet on the HBO of podcasting. Whether you're an emerging manager trying to crack institutional LP relationships, a founder wondering what top seed investors actually look for, or an LP benchmarking how the best funds are built — this conversation is essential listening. ⭐ Sponsored by Podcast10x - Podcasting agency for VCs - https://podcast10x.com We talk about - - Raising fund one with institutional LPs — no proof of concept fund required. - The four founder qualities Marlon never compromises on - Seed discipline at scale — how Mac VC stays true to stage at $600M+ AUM - What actually wins competitive deals at seed - Pipe: $13M valuation to $2B in 18 months — conviction, pivot, and recovery - Gimlet Media: betting on the HBO of podcasting before the category existed --- Links: Mac Venture Capital - https://macventurecapital.com/ Connect with Marlon Nichols - https://www.linkedin.com/in/marloncnichols Connect with Prashant: https://linkedin.com/in/choubeysahab Subscribe to VC10X newsletter - https://vc10x.beehiiv.com Subscribe on YouTube - https://youtube.com/@VC10X Subscribe on Apple Podcasts - https://podcasts.apple.com/us/podcast/vc10x-investing-venture-capital-asset-management-private/id1632806986 Subscribe on Spotify - https://open.spotify.com/show/7F7KEhXNhTx1bKTBFgzv3k?si=WgQ4ozMiQJ-6nowj6wBgqQ VC10X website - https://vc10x.com Timestamps: (00:00) - Preview (01:24) - Introduction to Marlon Nichols and MaC Venture Capital. (02:58) - MaC VC's journey from Fund 1 to Fund 3. (04:53) - How MaC VC attracted institutional LPs from its first fund. (06:48) - The fundraising experience for their recent $150M fund. (07:40) - Comparing the fundraising timelines for Fund 1, 2, and 3. (10:34) - The strategy behind fund sizing and when to stop raising. (12:59) - How LP expectations change from Fund 2 (TVPI) to Fund 3 (DPI). (14:46) - A deep dive into MaC VC's portfolio construction model. (17:17) - How Marlon's investment mindset has evolved with experience. (19:01) - The four essential qualities Marlon looks for in a founding team. (21:33) - How portfolio construction strategy changed from 50 companies to 36-40. (22:47) - Defining "winning" at a fund level: Why DPI is the ultimate goal. (24:31) - What wins allocations in competitive deals. (27:13) - PIPE's journey: From initial investment to a major pivot. (31:07) - The Gimlet Media story: The bet, the growth, and the Spotify acquisition. (33:48) - Rapid Fire: Sectors and regions MaC VC invests in. 🔔 Subscribe for weekly conversations with family offices, fund managers, and the LPs behind the biggest names in venture. #venturecapital #vc #seedinvesting #earlystagestartups

## Transcript

[0:00] You can create the best product in the world, but you can't move
[0:03] units. It doesn't.
[0:05] It doesn't matter, all right? As you scale a venture firm
[0:08] right now, you're at like 600 million plus AUM.
[0:11] How do you maintain true C discipline?
[0:14] That's the place where you're targeting while still deploying
[0:17] meaningful capital. And our, our model is we want to
[0:20] invest in 36 to 40 companies and we look at the, the, the round
[0:24] sizes of of C deals on average those are looking more alike
[0:29] between 5 and 7 million. And then we think about
[0:32] traditionally how much of A company ACEO is willing to sell
[0:37] at the seat stage is roughly 20%, somewhere between 15 and
[0:40] 20%. And that, that gives us, we can
[0:43] back into, you know, valuations that we're comfortable with.
[0:46] And we just try to be very disciplined about sticking to
[0:49] the strategy that we sold to our LP's right pipe.
[0:53] Fintech, when you first got involved, what was the non
[0:56] consensus insight that you had and what were the key inflection
[1:00] points that made it clear this could be a generational company?
[1:04] I think in 18 months it went from 13 million valuation where
[1:07] we got into 2 billion. Cimlet Media, another portfolio
[1:11] company in the media or culture space, you can say what gave you
[1:15] conviction early in a category that wasn't fully proven.
[1:19] We made the bet around them being able to become like an HBO
[1:23] of podcasting, if you would. Hey everyone, this is.
[1:27] Prashanth and I'll be host for the VC10X podcast and today we
[1:30] have Marlon Nichols with us. Marlon is a Managing General
[1:33] Partner at Mac Venture Capital, a seed stage VC firm with over
[1:37] $600 million in assets under management.
[1:40] In this episode, Marlon takes us through the full journey from
[1:43] closing Mac's very first one at 110 million with institutional
[1:47] LP's from day one all the way to Fund 3.
[1:50] He breaks down exactly how he thinks part sheet discipline at
[1:53] scale and the four qualities he looks for in every founding
[1:57] team. We also get into two portfolio
[1:59] case studies PIPE, which they entered at $13 million valuation
[2:03] and within 18 months it was sitting as $2 billion in
[2:07] valuation and Gimlet Media, where Marlin bet early on what
[2:11] could be the HBO of podcasting. So without wasting any time,
[2:15] let's dive straight in. This episode is brought to you
[2:18] by Podcast Enix My Podcasting. Agency for VCs.
[2:23] We help VCs start and run branded podcast.
[2:25] That can serve. As their entire content engine
[2:29] turn the conversations you're already having into a machine 1
[2:32] recording becomes your presence on LinkedIn, Spotify, YouTube,
[2:36] and e-mail. Don't just build another VC
[2:39] firm, build a firm that can stand out to LP's and one that
[2:43] founders can brag about having you on their cap table.
[2:47] Check out our services at Podcast 10X dot.
[2:49] Com I'll put the link in the description below now.
[2:52] Enjoy the episode. Hey Marlin, so good to have you
[2:55] on the VC10X podcast. How are you doing?
[2:57] I'm great, thanks for having me. Yeah, pleasure having you on.
[3:00] And Mac VC is now a very mature fund with more than $500 million
[3:07] in assets and the management. And tell me about the journey
[3:10] from fund one to your most recent 150 million fund at Mac
[3:15] Venture Capital. What fundamentally change in how
[3:18] you position the firm to LP's and to founders?
[3:22] Yeah, I don't think anything really changed.
[3:25] I think from day one we set out to build, you know, a franchise
[3:31] institutional grade venture firm.
[3:33] And you know, we, we tried to put the, the bricks in place as,
[3:38] as, as we went. So, you know, our philosophy was
[3:41] always that we want to bet invest in the best founders
[3:44] building the the most qualified and best suited founders
[3:49] building in, in places that we care about.
[3:52] And we wanted to be their, their favorite partners, right?
[3:57] They're more, they're most impactful partners, you know, so
[4:00] we're all, we were always giving of our time.
[4:02] We continue to be that way. And then we wanted to, you know,
[4:06] other major stakeholders are our LP's and we wanted to deliver on
[4:11] what we promised to them. So you know, if we said we're
[4:14] going to invest in, in 36 to 40 companies, then we invested in
[4:18] 36 to 40 companies. We said we're going to target
[4:21] 10% ownership. We have 10% or more or you know,
[4:26] just below 10. And, and, and the other thing is
[4:30] from day one, we started with institutional LP's because we
[4:35] knew that that would allow us to have an easier path to, to
[4:39] future fundraisers and also we could learn from them in terms
[4:43] of building, you know, an kind of institutional grade firm.
[4:47] Absolutely. So you're saying that from Fund
[4:49] one itself you started having on institutional LP's, is that
[4:53] correct? Yeah, that's right.
[4:55] That's right. Yeah, yeah.
[4:56] So to dig more into that, how do you approach that?
[4:59] Because when I mostly hear from emerging managers these days,
[5:03] they say it's like incredibly hard.
[5:04] And a lot of people say it's a waste of time to even target
[5:07] institution LP's if you're raising fund one out of proof of
[5:10] concept fund. So how did you go about that?
[5:12] What year was it and what was the response that you got?
[5:16] Any insights that could help newer managers if they should or
[5:19] should not target institution LP's early on?
[5:22] Yeah. So our, our journey was a little
[5:24] bit different than than most like Mac fund one was not a
[5:28] proof of concept fund, right. It was $110 million fund.
[5:33] You know, I ran a or helped to build and run a fund before that
[5:37] called Cross Culture Ventures, which was roughly 15,000,000.
[5:40] That was a proof of concept. And my partner is Adrian and
[5:43] Mike, they, they were running a firm called M Ventures before
[5:48] we, we joined forces and they had two proof of concept funds,
[5:52] I think each roughly around 10 million.
[5:55] And so, you know, throughout, throughout that those journeys,
[5:59] we were able to start to cultivate relationships with
[6:03] institutional LP's, right, that didn't bother with our, our
[6:09] proof of concept funds, but watch this build and invest
[6:13] over, you know, over the course of, of, of those of those funds.
[6:17] And so when we were ready to come together for, for Mac and
[6:22] you know, our target was 75,000,000, which which made us
[6:26] relevant or at least a viable investment option for
[6:31] institutions. I think if if you're raising
[6:33] anything below 50, it might not make sense for them, right?
[6:37] So we were targeting 75. We've been building these
[6:41] relationships over time. And so we were ready to go and
[6:45] they've seen enough from us where they were ready to take
[6:48] the bet. Yeah, absolutely.
[6:49] Yeah, that completely makes sense.
[6:51] So you were already experienced, GPS already have those
[6:53] relationships in place and it was just the right time to, you
[6:57] know, capitalize on that and go to HTCBC.
[6:59] It's amazing talking about the recent fundraise of 150 million.
[7:04] Talk about that experience. You know, as you raise
[7:07] subsequent funds, does it get easier to raise the next fund
[7:11] because now you're more track record, more success over your
[7:13] case studies? You could talk about two LP's.
[7:16] Or does it still depend on the environment you're raising in?
[7:20] Because right now it's not a super easy environment to raise
[7:22] it. So how much of that had an
[7:23] impact on your fundraising experience at this time around?
[7:27] Yeah. So yeah, that, that last fund
[7:30] was 2024 vintage. We announced it a little bit
[7:35] later, but it was a 2024 vintage.
[7:38] And you know, it's kind of a, it's, it's yes and no is the
[7:42] answer to that question. You know, having institutionals,
[7:46] institutions on our, on our cap table already, you know, if you
[7:51] deliver and you genuinely invest in the relationship and you
[7:56] perform, then you're not starting from zero, right?
[8:00] Most of them are underwriting for, you know, up to three funds
[8:05] assuming things are going well, right?
[8:08] And so from that standpoint, yeah, it's a little bit easier.
[8:12] Markets are always going to matter, right, Because markets
[8:18] will have a say on how much a particular entity is willing to
[8:23] deploy in a specific asset class.
[8:27] And so you know, I, I could say from, you know, fund 2 was a
[8:30] pretty easy raise for us and that fund was 205,000,000 I
[8:37] believe. And we raised that in about 6
[8:40] months, right. That was a 2022 vintage, which
[8:43] was when, you know, cash was basically free, right be given
[8:50] the low interest rates and everything that was happening,
[8:54] you know, with, you know, LP's just actively deploying to, to
[8:58] to venture. So that was, you know, that was
[9:00] that was really fast. You know, fun one took us all 18
[9:04] somewhere between 18 and 24 months to race right.
[9:07] And, and we got some luck. We had some some really strong
[9:10] markups that help push some investors LP's over the, you
[9:15] know, over the over the hill. Fun 3 was kind of in between
[9:20] those two. You know, the cash wasn't free
[9:23] anymore. The market was was starting to
[9:26] to tighten a bit, but we still had a strong base of
[9:30] institutions. And, you know, fortunately some
[9:34] of those doubled and some even tripled their allocations to us,
[9:38] right, which which made it easier, But we still had to, we
[9:41] wanted to bring in some new ones, some new LP's and we're
[9:45] not able to, you know, get there with any new institutions for
[9:51] for fun. 3. So that process took us about
[9:54] nine months as opposed to the six that we saw in the in the
[9:58] other cycle. Yeah.
[10:01] So it's all of all of these things matter and it's not it's
[10:05] never a a given. We just try to embrace the
[10:09] embrace the process of, of fundraising and look at it more
[10:12] as an opportunity to, to build relationships and to, you know,
[10:19] see what the market thinks about how we're performing our
[10:23] strategy and, and all those things.
[10:25] So yeah, we, yeah. So we, we, we, we take it on as
[10:30] a challenge, but but you know, it's also a fun, fun experience
[10:33] for us. Absolutely.
[10:35] And talking about fund sizing a bit, you mentioned the first
[10:38] one, your target was 75, but but you ended up raising upwards of
[10:42] 100 million. But in fund three, you say that
[10:46] we wanted or there was demand from newer institutional LP's
[10:50] also to get a bite, but we weren't able to give them, give
[10:54] them because just the existing ones had so much interest.
[10:57] They want to double, triple their allocations that there was
[10:59] not enough allocation left for new ones to enter.
[11:02] So how do you think about fund sizing because the first one
[11:06] that you did, you were comfortable in raising the fund
[11:09] size to you know cater to the demand that there was for that
[11:13] fund versus in fund three, although demand was still
[11:16] increasing, why did you not choose to still increase the
[11:19] size further to you know, even accommodate the newer LP's
[11:23] coming in? Yeah, it was a, it was a timing
[11:27] issue. We could have, you know, kept
[11:30] the fund open longer to to continue to bring on on the O
[11:34] PS, but we were we hit our target.
[11:37] And so because we hit our target, it didn't make sense to
[11:40] to spend more time, you know, raising capital.
[11:45] We wanted to, to get to work and focus on, you know, doing the
[11:49] thing that the LP's that, that have invested at that point, I
[11:54] wanted us to do, which is, you know, to identify great
[11:57] opportunities, invest in them and, you know, partner with
[12:00] those companies to, to help them grow.
[12:02] So that's, so that's the approach that, that, that we
[12:05] took. So, you know, if, if, if we
[12:08] could have done that, it got to say 200 in the timeline that we
[12:12] set out, then then we would've, we would've taken it, you know.
[12:18] Yeah. Yeah, completely, completely
[12:20] makes sense there. And how in general, how do you
[12:22] think about funds sizing now you're operated multiple funds,
[12:25] you know how it plays out, you know, even down the years how it
[12:29] looks like on the on the TVPI side versus TPI side and all
[12:33] that distributions and all those sort of things.
[12:36] So how do you find that sweet spot in terms of fund sizing
[12:40] where you can also show some paper distributions also and not
[12:45] not just paper once, but also some sort of DPI also.
[12:47] Because with the with the enthusiasm that you, you, you
[12:51] saw in the third fund that you raised, I'm sure there has has
[12:54] to be some DPI in there for them to be so enthusiastic to come in
[12:58] again and in bigger sizes. Yeah, that, oh, that's something
[13:02] I should have mentioned before as as well.
[13:06] You know, the other thing that makes a fund too easier to raise
[13:09] is that no one's necessarily because it's, you've had such a
[13:14] short cycle between fun one and fun 2.
[13:18] LP's are not really looking for DPI, right?
[13:21] They are looking for TVPI, right?
[13:23] And, and that needs to be competitive, you know, and, and
[13:28] they are looking to understand at least the, the more
[13:31] sophisticated LP's, they're looking to understand the
[13:34] performance of the underlying, the, the performance of the, of
[13:38] the portfolio companies themselves.
[13:43] And then so fun twos tend to be a little bit easier to raise a
[13:47] fun three is a little bit harder because now you've had enough,
[13:51] you know, more time on your first fund.
[13:55] So now you should have more tangible results.
[13:59] All right, so DPI starts to matter more and it gets, it gets
[14:03] even more complicated with, you know, the fact that the IPO
[14:07] market at that time and still is kind of slow moving or shut down
[14:13] and and M&A even isn't what it used to be.
[14:18] So you know, so you have to look at that and and and and take
[14:22] that into consideration too. But but all those things makes
[14:26] makes a fun three a little bit harder to to raise than than
[14:30] than a fun too. Yeah, completely.
[14:32] That absolutely makes sense. And as you scale a venture firm
[14:37] right now, you're at like 600 million plus AUM.
[14:40] How do you maintain to see discipline that's the place
[14:43] where you're targeting while still deploying meaningful
[14:46] capital? Yeah, that was your initial
[14:48] question. I didn't answer, sorry.
[14:50] So you know, we, we have a very specific model, right.
[14:56] And our, our model is we want to invest in 36 to 40 companies.
[15:01] You know, we look at the, the, the round sizes of, of C deals,
[15:06] right? On average those are looking
[15:09] more like between 5 and 7 million.
[15:12] All right. And then we think about, you
[15:15] know, traditionally how much of A company ACEO is willing to
[15:19] sell at the C stage is roughly 20%, somewhere between 15 and
[15:22] 20%. And that that gives us we can
[15:25] back into, you know, valuations that we're comfortable with.
[15:29] And so taking that plus the fact that, you know, there's going to
[15:33] be maybe a couple handful of precede companies that you know,
[15:38] that that we're going to see that just have amazing founders
[15:40] with a little bit early in their journey and our building in in
[15:43] places that, you know, we're very excited about.
[15:45] We want to be able to do make those investments.
[15:48] And then on the, on the back end, you know, maybe there's a
[15:52] handful of Series A deals, whether it be pre empting, you
[15:57] know, companies that are already in our, in that funds portfolio
[16:02] for their Series A or companies that we, we're just meeting
[16:05] later in the in the game that are exceptional.
[16:08] We want to be able to write maybe a, a $10 million check, 8
[16:11] to $10 million check into that Series A, all the while
[16:14] targeting our, targeting our, you know, our desired ownership
[16:18] levels. So you take all of those things
[16:21] into, into account, plus reserving 40% of the fund to to
[16:26] continue to invest in the top performers of that fund.
[16:30] So you put all that together and that tells you, you know, where
[16:34] you should be, how much you should be raising in order to
[16:37] deploy that strategy. And, and we just try to be very
[16:41] disciplined about sticking to the strategy that we sold to our
[16:45] LP's, right, Because they have. Yeah, they're doing their own
[16:50] portfolio construction and, and management, right.
[16:53] And, and so, you know, we're, we're selling them, you know,
[16:57] you know, a red Porsche and they put that in, in their, in their
[17:01] construction model and we come back with a, you know, black
[17:05] Cadillac. And that that's, that's, that's
[17:08] a problem for them, right? And, and in their constituents.
[17:12] And it ultimately becomes a problem for us because we
[17:15] they're not going to trust us enough to re up with us.
[17:18] Absolutely. I completely agree with that.
[17:20] And from being early into VC, I mean those days like a few years
[17:27] back when you were early into VC right versus now when you are a
[17:31] partner at a multi $100 million firm, right.
[17:35] What has materially changed in your thinking and how you look
[17:38] at firms and your mindset in general?
[17:42] Yeah, I, I think you just this experience, right?
[17:46] You, you, you get more reps you, you see more, see more things.
[17:52] It's yeah, it's just maturity and, and, and experience and,
[17:56] and the thing that the primary place where you continue to
[17:59] learn is managing people. That, that becomes whether it
[18:04] be, you know, our, our employees internally, whether it be our,
[18:10] our LP relationships or the other VCs that we, we, we
[18:15] partner with and, you know, travel with, you know,
[18:18] throughout our journey or, and probably most importantly, the
[18:21] entrepreneurs that we work with, right, you know, people are just
[18:25] unpredictable and, and, you know, over time you get to, you
[18:30] learn how to manage the, the various situations.
[18:34] So I'd, I'd, I'd say that's probably the, the biggest shift
[18:38] is just having those experiences and, and now I'm continuing to
[18:42] develop a kind of a died book or playbook to manage through these
[18:46] things. Yeah, absolutely.
[18:48] And on the investment side, are there any type of deals that you
[18:52] would have invested in in your earlier days as AVC, but now
[18:57] where you're at, you would decline those investments or
[19:00] type of deals? I think that just well, yes, you
[19:05] know, one thing that I've, that I've learned is the I haven't a
[19:11] founder profile that I, I need all, all the companies that I
[19:16] invest into to have right? And it it it's made-up of four
[19:21] things. So the that founding team, they
[19:24] have to be a tractors, right. And the the thing I always say
[19:28] is like we haven't yet seen a company that has a multi billion
[19:36] dollar outcome that was solely built by the founders, right?
[19:40] They they're going to have to hire other incredible people.
[19:45] And in order to do that, you need to be able to attract that
[19:47] talent. People need to want to work with
[19:49] you, right. The the other thing is like
[19:53] prolific at sales, like you can create the best product in the
[19:57] world, but you can't move units. It doesn't it doesn't matter.
[20:01] All right. The third thing is, like I
[20:04] always say, thoughts to things and and.
[20:08] That's another way to say product management, right?
[20:10] So taking an idea and turning it into a product that either
[20:16] enterprises or people will buy, right?
[20:19] And then technical ability or knowledge.
[20:25] So even if you're outsourcing a great deal of the thing that
[20:31] you're building the technology, someone needs to understand what
[20:35] is being built and needs to be able to guide the folks that
[20:40] are, that are, you know, in the trenches building and needs to
[20:43] understand exactly what they're building to see if they're doing
[20:47] it correct so that you can avoid tech debt.
[20:49] And, you know, every time that I've made exceptions, you know,
[20:55] on a, on a team that maybe didn't have one or two of those
[20:58] things, it hasn't been a good outcome.
[21:01] And the ones where, where they've had all those, those
[21:04] things, even when, you know, the company goes through some, some
[21:08] tough periods, they find a way out of it, right?
[21:11] And, and, and end up finding some level of success.
[21:15] So, you know, that's something that that I've learned over the
[21:19] years and you know, and, and stick to now.
[21:23] Yeah, absolutely. Quite interesting.
[21:25] And talking about portfolio construction, how has that
[21:28] changed post 2022, specifically around reserves?
[21:32] Ownership targets are pacing. Yeah.
[21:35] So you know, a fund one for instance for us, you know, we we
[21:41] targeted 50 companies, right And we learned that.
[21:47] And the reason why we 50 was our magic number at that point is we
[21:51] thought we have enough at bats to get, you know, maybe a couple
[21:57] of of home runs, a handful of base hits and, and a number of
[22:02] failures. And, and, you know, and also a
[22:05] number of just like, oh, we got our money back and that would
[22:09] get us to like a 5X net fund, right?
[22:12] And then as we, as we invested that fund and started watching
[22:15] the performance, we're like, you know what, actually, we can do
[22:18] this with at, at 3636 to 40 companies as opposed to 50.
[22:24] And we can get more ownership in these companies because now we
[22:28] have more, more dollars to allocate to, to each company.
[22:32] Oh, and by the way, for the ones that are doing really well, we
[22:35] have more capital to, to, to continue to put into them to
[22:39] protect our ownership or to increase our ownership.
[22:43] So that, that's, that's kind of how we we thought about it over,
[22:47] over the years. Quite interesting.
[22:49] And how do you define winning at a fun level today?
[22:53] Is a DVPI or DPI or ownership and outliers?
[22:57] What is it for you? Yeah, it's, it's always got to
[23:00] be at the end of the day, it's DPI, right?
[23:05] The, the name of the game is returning capital in multiples
[23:12] to our, to our investors. All right, that's the, that's
[23:15] the end, the end game. To get there, though, there's a
[23:18] number of things we have to do. So you, you got to see TDPI has
[23:22] to be going in the right direction in order to get to,
[23:24] to, to DPI. You know, you've got to, you
[23:30] know, do a good job of, of working with experience sharing,
[23:38] providing feedback to the portfolio on CE OS to, to help
[23:42] them, you know, navigate critical decisions, right.
[23:47] So that's just, I say that to say portfolio management and
[23:55] working with our, with our CE OS is a, is, is a huge, a huge
[24:02] undertaking for us and something that has to be taken very
[24:07] seriously. And we have to do a good job at
[24:10] it. Because if we don't, you know,
[24:12] now those CEOs are, you know, just running, running blind and
[24:16] the, yeah, they may figure it out, they may, they may not.
[24:18] But if we do our job, it, it makes it easier for them to, to
[24:22] succeed. So it's, I think it's, it's,
[24:25] it's all those things. But at the end of the day, you
[24:28] have to perform, and performing means returning capital.
[24:32] Absolutely, completely agree. And in today's comparative
[24:35] deals, what actually wins you allocations because you are in
[24:39] some really good names. So what is it for you?
[24:42] Is it brand, is it speed, is it check size or something else?
[24:46] It again, it's, it's all the above, right?
[24:49] But but where it starts is the, is the reputation.
[24:52] So our, our best deals come from our, our founder network.
[24:56] So founders that we've worked with, are working with founders
[25:01] that we've, we, we couldn't necessarily get there, you know,
[25:05] for their company, but built a great relationship.
[25:09] They, they recommend us to, to their friends and their and
[25:13] their Co travellers who are building great, great companies.
[25:16] And The thing is like a, a great founder knows what another great
[25:20] founder looks like, knows what another terrific opportunity
[25:25] looks like, right? And so, so, so it starts with us
[25:30] doing a good job of working with our, with our founders and, and
[25:33] building a, a, a terrific rapport with them.
[25:37] And, and that's what for the most part, allows us to win
[25:41] deals there. You know, we never really
[25:44] compete on, on price. You know, we're, we, we're going
[25:49] to value the company in a, in a fairway that, that makes sense
[25:53] for the, the company and makes sense for our investors.
[25:56] So that's not, that's not the thing that that we're going to
[25:59] win on. We do try to be fast.
[26:02] You know, we've, we've got gone through full diligence cycle,
[26:07] you know, in a week because we had to ideally it's a, it's
[26:12] about a two week process for us. And what allows us to to to do
[26:16] that to be that quick is that we kind of understand or we do
[26:21] understand the sectors and the industries where we want to
[26:24] invest and we do a lot of pre work.
[26:27] So that we're approaching these opportunities with a prepared
[26:30] mind. And that allows us to.
[26:33] So now we understand the market, we understand the opportunity.
[26:36] So what we're really diligent saying is, is this the right
[26:39] team to do this? Is the product that they're that
[26:43] they're building, you know, sustainably differentiated,
[26:47] right? Are they able to create real
[26:49] moats? And do we see a path to them
[26:51] becoming a category leader? Yeah, absolutely.
[26:55] And now we'll take a couple of case studies of your portfolio
[26:58] companies, some big names there. So first one is Pipe Fintech.
[27:03] When you first got involved, what was the non consensus
[27:06] inside that you had and what were the key inflection points
[27:09] that made it clear this could be a generational company?
[27:13] Yeah. You know, I think more than
[27:16] anything, this was a bet on a, a founding team that I had worked
[27:19] with before. They, you know, they had a, a
[27:22] company, I was an investor in that company out of cross
[27:26] culture and it didn't, it didn't have the outcome that they
[27:29] wanted to have or any of us wanted to have, you know, but I,
[27:34] you know, advise them and help them to get to a fairly soft
[27:38] landing. And while they were at that,
[27:43] that company that where they landed, they learned a lot about
[27:49] kind of a SAS businesses and, and found a gap, right?
[27:54] Because pipe for those that aren't familiar, essentially it
[27:58] was working capital lending to SAS companies and the lending
[28:04] would be based off of the, the contracts that, that they have.
[28:07] So they would, they essentially were, were creating a
[28:09] marketplace where they would allow other companies to buy an
[28:13] interest in the SAS contracts that you know, that that a
[28:17] company would have. And that's how the trade would
[28:20] would happen. And, and they ran out to a great
[28:24] start. I think in 18 months, they went
[28:26] from 13 million valuation where we got into 2 billion.
[28:31] So it was, it was working. But then there were a lot of
[28:34] things that they that they learned, you know, unit
[28:37] economics weren't exactly where they needed to be.
[28:39] There was a little bit too much lending off of their balance
[28:42] sheet versus leveraging pools of capital for that.
[28:46] There was, yeah, unit economics was the primary thing, you know,
[28:51] underwriting. They got better at
[28:55] understanding, you know, what are the things that really
[28:58] matter when you're underwriting certain types of the types of
[29:00] loans, which industries made the most sense, etcetera.
[29:06] And then ultimately they, they made a, a significant pivot
[29:09] about 2 1/2 years ago to not only work with SAS companies,
[29:15] but to target channel partners like like an Uber Eats that
[29:21] works with a number of a large number of small businesses,
[29:26] restaurants around the world actually.
[29:29] And so now what pipe does is they, they plug into Uber
[29:35] systems to understand transactions and they underwrite
[29:39] these working capital loans based on the transactions that,
[29:42] that real time transactions. So they can pull back, you know,
[29:48] a revolver amount or, or extend it based on what they're seeing
[29:52] in real time with, with those businesses.
[29:55] And you know, since that happened, you know, the the
[29:59] company at top line has grown 3X and I think year over year last
[30:06] year to this year, it's about two X growth and they're
[30:09] expanding internationally, etcetera.
[30:12] So high hopes for them, you know, still and great to see
[30:17] that, you know, they've really done the work to understand what
[30:21] was good about the business and, and what where there was a room
[30:25] for improvement. And, you know, double clicked on
[30:30] the on the things that were going well and, and really took
[30:34] the time to fix the things that needed to be fixed.
[30:37] And yeah, we're in a, we're in a good path now.
[30:40] Yeah, absolutely. Quite an interesting story there
[30:42] about the journey of, you know, first euphoria and then having
[30:46] those struggles and then again overcoming that.
[30:49] Typical of how these success stories are made right now.
[30:52] On to the next case study here, Gimlet Media, another portfolio
[30:55] company in the media or culture space.
[30:57] You can say what gave you conviction early in a category
[31:01] that wasn't fully proven and how did you think about timing the
[31:06] exit versus holding longer? Yeah.
[31:09] So this this is a cross cultural investment and it it went really
[31:16] fast. I mean, I think we realized this
[31:18] one in about three years or something like that.
[31:22] And, you know, so the, the decision to get into it, you
[31:27] know, podcasting was, it was nascent at the time, but it was,
[31:31] but you could see that it was growing and, and, and more kind
[31:37] of outlets or platforms. We're starting to, to, to think
[31:41] about it. And Gimlet had a unique
[31:44] approach. It was like, we're going to
[31:47] create these mini movies that you listen to and, you know,
[31:52] the, the founding team, you know, one was it a creative and
[31:55] the other was a very great operator and, you know, business
[32:01] person and, and salesperson. And so that combination seemed
[32:06] perfect for, for, for this, this type of business.
[32:10] And so we, yeah, we, we, we made the bet around them being able
[32:15] to become like an HBO of podcasting, if you would.
[32:19] And you know, ultimately what happened in like a 2 1/2
[32:23] three-year period is Spotify, you know, was probably the
[32:27] largest distribution channel and saw, saw the opportunity and
[32:33] decided to, to make an offer for the company and acquired.
[32:36] Yeah, absolutely. Yeah.
[32:37] And in the early days when I just started listening to
[32:40] podcast, I was just browsing and Gimlet Media and his podcasts
[32:44] were the ones that continuously showed up and was super high
[32:47] quality. I still remember.
[32:49] So, yeah, great bed there. And I'm personally doing a
[32:52] podcast myself. I'm very much in the same space.
[32:56] And I would say podcasting is still very nascent relatively,
[33:01] when we compare it to, let's say, blog posts or newsletters
[33:06] or, you know, writing a post on LinkedIn.
[33:08] I think podcasting still hasn't gone mass scale as all these
[33:13] other mediums like newsletters have.
[33:14] If you look at the numbers, that's pretty apparent, although
[33:18] it has sort of became a taboo that OK, everyone is starting a
[33:22] podcast, but that's actually not true.
[33:25] Everyone is writing or doing the newsletter and writing on social
[33:29] media, but doing a podcast is not something that everyone is
[33:31] doing. At least that's something that
[33:32] numbers say. That's great.
[33:36] But yeah, great talking to you, Marlon.
[33:37] I'll just do a quick rapid fire around with you to close this
[33:40] out. Yeah, and then go from there.
[33:42] So I'll ask you 6 quick questions about the investing
[33:45] you're doing, and you have to give 6 quick answers.
[33:48] All right. So the first one is what are the
[33:51] sectors and regions you invest in?
[33:53] Yes, the reasons we primarily invest in North America,
[33:57] although we we do have a, a pretty nice footprint in Africa,
[34:01] specifically Nigeria, Kenya and Senegal to date in terms of the
[34:08] sectors what we're doing a lot of around AI, so the physical AI
[34:15] infrastructure, fintech, healthcare, energy, those are
[34:20] the where we're spending most of our time.
[34:22] And then my partner Mike does a lot around aerospace and
[34:25] defense. Amazing.
[34:27] What's the typical stage where you invest?
[34:30] We're seed investors so and what that means for us is, you know,
[34:34] the company's built a product and they've had, they either
[34:38] have recently taken it to market or about to take it to market.
[34:41] We think that, you know, we believe that storytelling is
[34:45] essential for for, you know, a start up to be successful.
[34:50] One of the ways in which we add value is to to help our founders
[34:54] go to market by telling relevant stories that truly resonate with
[34:59] their target audience. Absolutely.
[35:02] Do you need rounds? Yeah, we, we lead the vast
[35:05] majority of the rounds. We the lead or Co lead for the
[35:08] most part. You know, if there's we're too
[35:10] late to the game and we, you know, just need to get in and
[35:14] have to participate, then then we'll do that.
[35:16] Assuming that the the the terms are similar to, you know, terms
[35:21] that we would have gotten comfortable with as a lead.
[35:24] Absolutely. What's the typical check size
[35:27] you put in upfront? Anywhere from these days?
[35:31] Anywhere from 5 million, yeah, depending on the size of the the
[35:37] the seed ran, yeah. Maricon founders get in touch in
[35:41] case there's a directory yeah, so we.
[35:45] Were very open to meeting new people that are not in our
[35:48] network and the the best way to do that is just to go to our
[35:51] website is a contact us page and you can literally submit your
[35:56] deck and relevant information and the team goes through that
[36:00] periodically and you know get we get back to the ones that are
[36:05] fit and you know kind of look like what resemble a Mac deal
[36:11] and we've even made an investment that that came in
[36:14] cold off of the the website before so that's that's probably
[36:18] the best way outside after connecting with us through
[36:22] someone that we know and respect and trust.
[36:25] Absolutely last one where can. Our listeners follow you, so I'm
[36:30] on. LinkedIn Marlon C Nichols I'm on
[36:33] Instagram same, same thing. Marlon C Nichols.
[36:36] We publish A newsletter, so you can subscribe to that from our
[36:40] from our website as as well. It's it's, I think it's
[36:43] quarterly as a cadence. So those are those are the best
[36:46] ways. Awesome.
[36:49] I'll make sure to put those links in the show notes below.
[36:51] Thanks so much for making time for doing this, Marlon, and it's
[36:55] been great talking to you. I wish you a happy investing.
[36:58] Thanks, Prashant. This is this is great.
[36:59] Thanks for having me.

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