Ep #9: Richard Kerby

 

PODCAST TRANSCRIPT:

Dhani Jones (00:00):

You didn't like sleeping underneath your desk, you didn't like the late nights at 25 hour days?

 

Richard Kerby (00:12):

That's right. I think it was my 23rd birthday, I had spent 20 to 24 hours in the office. And so, not too ideal there, but what I did learn was that I was passionate about investing. At the time, it was just public markets investing, and then I was passionate about tech.

 

Dhani Jones (00:29):

The Pathfinder podcast is presented to you by Ansarada. Ansarada is the modern deal in virtual data room technology designed to make M&A capital raising divestments, restructures in IPOs, as simple as possible. Since 2005 Ansarada has been trusted in over 24,000 transactions and powered over one trillion worth of deals. Ansarada is a secure space that includes workflow tools, AI power data rooms, built in question, and answer and integration frameworks. It's the data room trusted by modern deal makers. You can start for free today at ansarada.com. You know I like winning team. So, say a with me, anserada.com for your next winning outcome.

 

Intro (01:11):

Welcome to the Pathfinders. The modern deal maker series brought to you by Ansarada. Now, here's your host, Dhani Jones.

 

Dhani Jones (01:22):

Welcome back everybody to the Pathfinders presented by Ansarada. I'm your host, former NFL player investor and entrepreneur Dhani Jones. Today I'm joined by Richard Kerby Kerby. Richard Kerby is a general partner at Equal Ventures where he's utilizing his talents for identifying and evaluating early stage investments. In 2012, he joined Venrock where his investments included 6Sense, Amino Apps, Beckon, Burner, Luxe Valet, and Salsify, he's with us today, share some of his deal, making stories, the importance of diversity in VC enterprises. If we get lucky, maybe even give us some tips for spotting good investments. Welcome Richard Kerby Kerby.

 

Richard Kerby  (02:06):

Thank you, Dhani. Pleasure.

 

Dhani Jones (02:08):

See, in this moment right now, I wish I could have some of these really cool features to this platform so I could do like a round of applause, I could do like a horn or something like that. You're like, oh, there Dhani goes with all of his different toys.

 

Richard Kerby  (02:22):

Visual effects after the fact, Dhani we can do this.

 

Dhani Jones (02:26):

All right. Before we get into all the different ways that you've been incredibly successful, being a Hoyas fan, I imagine it's been tough. Because I went to Michigan and I think we're doing all right, but how are your Hoyas, how are they holding up?

 

Richard Kerby (02:43):

Little rocky starting the season this year. But I think we'll fair better come January, February, March, is the hope at least

 

Dhani Jones (02:49):

You think so?

 

Richard Kerby (02:50):

I think so. We got some good young talent. Your Michigan squad is in trouble on Saturday. So, let's not talk about that now.

 

Dhani Jones (02:56):

But I'm thinking about this world of investing, and I remember when we met and just some of our conversations, and I got introduced to the investing world because making the transition from football and to television and television watching the world start to shift and change from the VC world, the private equity world, it became something of interest. Because I always thought, how can I identify really good and unique people that I can invest in, that have great ideas and how can I be a part of their life by giving them this advice and support this guidance as some might say. That was where I got started. What about yourself? How did you find your way into this investing world? How did you think about it before? And even when you transitioned out of college and going into credit suites, how did you even think to be interested in it?

 

Richard Kerby  (03:48):

Yeah, I'll be honest. My first level of interest was just around making money to be very blunt about it. When I was in college, I had just heard that invest in banking was the most competitive thing and the most financial, rewarding thing. I said, okay, let me try and pursue that path. Went ahead and did that as you mentioned, joined credit suites, and did that for two years and can't say I enjoyed it for those two years.

 

Dhani Jones (04:11):

You didn't like sleeping underneath your desk. You didn't like the late nights at 25 hour days.

 

Richard Kerby  (04:16):

That's right. I think it was my 23rd birthday. I had spent 20 to 24 hours in the office. And so, not too ideal there, but what I did learn was that I was passionate about investing. At the time, it was just public markets investing and I was passionate about tech. And so I thought, okay, I know I like those two themes, how do I find a way to pursue that in a career path that's not what I'm doing now? And that's what I just started researching, Googling, et cetera, stumbled upon the best way I thought to marry tech passion with investing passion, is venture capital. And so, I then sent probably 100 or so cold emails to partners at firms. And I asked them... I basically was always keeping track of whenever a company that raise cap, I thought that was interesting.

 

Richard Kerby  (04:59):

And so I said, "Hey, Dhani I saw you invested in X, Y, Z company, we'd love to understand like the rational behind that investment." And of those 100 or so emails probably 90 were never answered. Another five or six, the response was, "Hey, thanks for reaching out. We don't talk about our investments. Goodbye." And then maybe four, like, hey, I'd talk for 20 minutes, was the layout of the response that I got. Fortunately, one of those firms was a firm called IVP, Institutional Venture Partners in the Bay Area. And I actually emailed a guy named Steve Harrick. And then he said, "Hey, talk to my associate." Basically is what he said. And in much nicer words in his email.

 

Richard Kerby  (05:37):

And so I thought, great. And then I ended up chatting with this guy named Michael McLean and he said, "Hey, enjoyed our conversation. We're also looking to hire somebody. So why don't you just shoot me your resume?" And so, I did that and then a couple weeks, maybe a couple months later went through the interview process with them and was fortunate to get the offer to join them. And so, I moved out to the West Coast, Bay Area. Actually, my interview with them was my first time ever in the Bay Area. But it feels like it sound like you've been there multiple times, obviously. And so, moved there to join that role. But ironically, my best friend was from San Francisco working with me at Credit Suisse, went to college together. He also back to the SF area at the same time I did.

 

Richard Kerby  (06:16):

So, made it a little easier outside of work to make it move out west. Yeah. So, for those who don't know IVP, it's a later stage venture fund several billions of AUM. When I was there, we were writing checks in the order of $30 million. They now write much larger checks, but spent another two years there. And that was our first foray into venture capital. And my test to myself was, hey, do I like this? In fact, it was the question I was trying to answer. And what I was able to answer was, yes, really like venture capital. But this stage of venture capital, I thought still was not yet what I was fit to do effectively. And the thought process there was, I had never been an entrepreneur beforehand, but I wanted to learn from them. And I also wanted to find ways to be helpful to them. And I thought that was harder to do at the leader stages, because when we were investing in companies they were already at probably a couple 100 employees.

 

Richard Kerby  (07:09):

They were well oiled machines, they needed more capital, they needed help. And so, the ability to interact with founders, CEOs, in a way that was [inaudible 00:07:17] for both people was really hard to come by. And so, I thought the best way to go do that was to move further and further earlier stage. And so, with that joined a firm called Venrock, it's I think the second oldest venture firm in America, it was originally the venture on with the Rockefeller family. That's why it's called Venrock. And so, it's been around for quite a while and there I got to focus on mostly series A investing. So, a lot more than I was at IVP, and learned a lot there too. Spent five years there making investments across in different categories. And I think what I learned the most there was investing is... Or should I say, venture capital is not just about investing in companies.

 

Richard Kerby  (07:56):

There's other things that come to play and those things are like fund management and fundraising. Things that I was able to get some exposure to realize, hey, it's not just about giving Dhani money and then hoping he gives me 10x back. And so, I learned a lot there and I think helped me become more of a full sum venture capitalist than someone who was just trying to throw money on people. And that ultimately led to me thinking, okay, I now have figured out where I think I work best and that's the seed stage. So, one level even earlier than Venrock and left there and created a firm with my co-founder Rick called Equal Ventures. And now we are focused on leading and co-leading seed stage investments. So think of a founder that's raising roughly $3 million, we'll put in a million and a half to $2 million of that round.

 

Richard Kerby  (08:41):

And so, leading those rounds oftentimes, and we are journalist funds, we invest across a wide variety of categories, but I'd say we spend the majority of our time in what we call legacy markets. And so, those are defined as categories that have not yet become tech enabled. Examples would include FinTech, insurance, logistics, and supply chain, elder care, childcare, e-commerce enablement, a wide variety of things. And now I've realized I've talked for about like 37 minutes. And so, I'm going to stop there Dhani, and hopefully provide you with the ability to direct me where you want me to go.

 

Dhani Jones (09:12):

No, those are so many different paths. And I love how you've taken this trip, so to speak around the globe and picked up these different parts of your life and written different chapters, which has inevitably built this amazing book of where you spend your time now. But I think one of the things that you said at the very beginning of your 37 minute [inaudible 00:09:37], was you sent out 100 different basically applications and letters, 100 of them, right?

 

Dhani Jones (09:47):

And so, you're sitting at your desk and you sent out 100 of them, you're watching, you're following the markets. And I also want to ask you a question about public markets versus venture markets. One where you can do what you wish and the other one where you're looking at identifying people and you have long term hold and capital and stuff like that. But what compelled you to send that many letters and still feel as though it was going to be something for you? There's this notion of grit, there's this notion of endurance, and I think a lot of people just completely forget in this world today.

 

Dhani Jones (10:22):

Because if I were to say the S name, she'd pop up on my screen and if I talk on my phone and I'd say or I talk to the A name, she'd pop up somewhere else. We all know these different people and we're not going to say the name because it just shut down a whole computer. So, why did you send out all those letters and what made you wait? What made you feel compelled enough to say, you know what, something of this is going to come out and it's going to be something that I really want to do?

 

Richard Kerby  (10:53):

Yeah. I think it was the fact that I wanted to try it out, honestly. So, I realize that what I was doing now was not what I wanted to do for the next 25, 30 years. I had done research on a variety of different things I could do with myself based on my limited previous experience. And I thought that this was the thing. And so, my viewpoint was, I don't know how else to get in there. Because I realized that when you submit an application to a job on the company's website, you're never going to get a response. I was like, okay, that's probably a waste of time. Let alone venture firms don't even do that. You can't even apply to a venture job on any venture firm's website. And three, I was like, I never saw job postings for this thing.

 

Richard Kerby  (11:32):

And so I figured, hey, at the very least, let me try and learn. And in those emails I sent none of them said, hey, are you looking to hire? It was all based on asking you questions about things that you do in your day job. And most venture capitalists, I'm sure as you already know, Dhani, love hearing themselves speak. And so, I was like, hey, I'm giving someone opportunity to talk all the crap they want to talk about their stuff. And so, I hope they're going to say yes, and obviously I was wrong because Mo said, no, but that's what I thought was going to be the success rate for me. And I honestly didn't think of any other pathway in, to be honest with you. And what I also did in those emails, is I made sure I sent them from my Credit Suisse email address.

 

Richard Kerby  (12:11):

That way it looked like an investment banker was emailing them about their company. So, trying to relate the email to something they would care about, oh, I invest, these companies are on stage. I want them to go public. That means they got to talk to investment bank at some point. And so, I figured that would be better than sending an email from Richard Kerbykerbygmail.com, which probably gets stopped by some spam fill they have there, let anything else. And so, I think the two things that worked for me were the Credit Suisse email, sending the amount of emails and not asking for a job, but wanting to learn, I think, worked out well.

 

Richard Kerby  (12:44):

And I kept sending them, because my viewpoint is like, I want to get an answer. The answer can be no, that's fine, but I'll keep emailing you until you say yes or no. And that was a similar tactic that Rick and I use in our fundraise. We talk to LPs, LPs ghost on you all the time, just like venture capitalists will do and founders, unfortunately. And so, I was like, all right, I'm going to keep emailing this LP until he or she says yes or no. If you want to stop hearing from me, give me an answer. And so, I'll just keep going.

 

Dhani Jones (13:10):

But part of that had to be something else in you, right? The notion of being at Credit Suisse and being up 20 hours or 24 or the 25 hours. There's something else in you. And what I want to impress upon those that are listening is that the world of investing, the world of venture and private equity and public markets, it's not easy. And a lot of people just think that you turn this corner, and all of a sudden things are just presented to you, and then you can just all of a sudden do it. But it takes a lot of time and energy. It takes a lot of commitment. It takes a lot of those Gordon Gekko moments, where you just show up with a gift and you're like, hey... And we all have our little bit of tricks. I love the question, I love the email, I love to hammering them regardless because people want to ultimately see if you're truly committed to it. So, I celebrate that.

 

Richard Kerby  (14:04):

Yeah. I appreciate that Dhani. I think the other thing I'd throw in there too, is that earlier on, I forget when it was in my career, I remember meeting this investing bigger time before I was in it. And I was thinking that all these people were so much smart than I was and who were doing this job. And then I met a couple of them, I'm like, man, these people are so dumb. They are not that smart. And then I was like, I'm not that smart either. And so, if they're not smart people can do this job, then I can probably do this job, because I'm in that bucket too. And that was the other thing. It was like, it's intimidating and scary at first because that's something you've never done, don't know how to do, et cetera, but then you realize, some people are doing this job, not that special, myself included. And so, let's go ahead and figure this out how to get in there.

 

Dhani Jones (14:43):

So, while you were at Venrock, what was that experience like? You had to be excited at the fact that they wanted you there. That you could have made that transition and all of a sudden they brought you in. You had to feel a little bit of that ego lift, but when you got there into the firm, it also had to be a little bit of a slap in the face because a lot of things that you didn't know are things that you did know all of a sudden now are coming at you at 100 miles an hour.

 

Richard Kerby  (15:10):

Yes. I would say actually the learning curve for Venrock, I thought wasn't too hot just because I had been here before. So, I'd already been in venture capital. Yes, it was a different stage. But I think the day to day job of venture capital is very similar, whether you're doing later stage or early stage. It's lots of meetings with companies and founders. It's lots of email responding to those companies and founders, it's doing diligence to see if you want to invest or not. And then it's finding ways to be helpful to those founders. So, those characteristics definitely, I think are parallel with whether it's late stage, early stage, or even earlier. So, I think that wasn't the biggest thing. I think the biggest change, just a different strategy and style and approach.

 

Richard Kerby  (15:51):

At IVP, we were a pretty aggressive team in going to hunt and find and win things. Very much outbound. Let's go find something and go ahead and go after it. It's much more of a deliberate pace at... Sorry, at Venrock. And so, that was very, very different in terms of taking our time and making sure we really understand as much as possible before sending out that term sheet or trying to commit to winning that deal. And so, it was a different, I think, style and approach more than anything else. And I think it's really awesome to be able to learn and see how different approaches work.

 

Richard Kerby  (16:22):

Because I think you can look at many different venture funds that are successful and they all have done so in very different ways. There's no right way or wrong way to do it. The right way is the way that works for Dhani or Richard Kerby. That's the right way. And so, that's what I try and hone in on. Try and figure out as I see the different approaches, what's the Richard Kerby Kerby way, where do you find most successful than double down and triple down on that.

 

Dhani Jones (16:43):

It's like playing basketball, Lebron and KD don't play the same way, but they're both really successful, right?

 

Richard Kerby  (16:48):

Mm-hmm (affirmative).

 

Dhani Jones (16:49):

Each person's got to have their game. You got to go back to your game and when you're out there, running your plays. Now, if you're like Tom Brady, you're picking up on all the different cues of the other people you're involving in your game, which is really important. Because if you stay the same while the world evolves around you, you might get left behind. So, how do you start to identify? And when you're talking about out there in the hunt for the deals, how have you been able to spot those deals? And then at the same time, what's the importance of diversifying some of those deals? Because you talk not necessarily about one vertical, but several verticals.

 

Richard Kerby  (17:27):

Yeah. I think that's also part of doing what works for you. For some folks they love to say, you know what, I'm a FinTech investor. I love FinTech. I'm going to go as deep as possible, and that's all I care about. Whenever I've gotten deep in a category, I just get bored. I'm like, man, I'm so over. Even though it's a great category, there may be great companies there, I'm like, why am I spending so much time here?

 

Dhani Jones (17:47):

You mean you don't want to spend all your time with the elderly?

 

Richard Kerby  (17:49):

Exactly. That's why I'm here with you, Dhani, come on.

 

Richard Kerby  (17:58):

And so yeah, no, I diversify for a number. One, I think there's great business built across many capitals and sectors. And so, that's one. Two, I just get much more excited by seeing opportunities across industries and learning about many different sectors markets categories. And so, that's for me personal response. As we go about sourcing these things, I think there's many mechanisms one can utilize. Reading a ton about a category. Let's say, I do want to learn about, let's say... I don't know, childcare, go reading about it. And if you go ahead and start diving deep there, one, you start to see the problems that exist there. And then two, you just stumble upon companies, because companies are always putting out content or being mentioned in different periodicals or blog posts about categories. And so, you can find companies, just by your learning activity.

 

Richard Kerby  (18:42):

And then as you start meeting founders, you start to understand different segments and all understand they're the players in the space. And so, you can quickly figure out who you need to meet with to figure out what's the best of these three, four, five, six options there. And then decide if you want to make an investment or bet there. And then I think at the end of the day, though, when having those convos with founders, the founders that are, I think the best at educating you, even though you should do your homework beforehand to be educated. Those who educate you are the ones that you realize, man, they have got so much command and understanding of their space. It's awesome. Because I come in usually because at Equal, we try to do our best to understand as much as possible about a sector before we meet with the founder. Because we don't want this to be a purely educational thing, where like the founder's teaching us about X, Y, and Z.

 

Richard Kerby  (19:30):

If we can have a great base foundation there and say, "Hey founder, don't spend 15 minutes explaining why childcare is important. I buy it. Let's talk about why you are the right person to go do this and why your solution is the right solution to go solve this paint boy." And that I think it's nuanced, but I think it changes the conversation from a pitch to a conversation on folks who are interested in a solution or pain point. And I think that puts you in a much better spot to win when you want to win an opportunity there. But then, the day I think like, hey, everything that we invest on, there's a nuance about the market that's not wildly known or believed, that the founder, because he or she is spending their whole day, every day in that space, they know it and they found it. And if you can buy into that, that's when I think you find something pretty special. And so, it's really hunting down those people who have identified those nuances that you believe in.

 

Dhani Jones (20:23):

So, it's the nuances that they've identified. It's a lot about their obsession and being able to teach you that makes a good founder and potentially a good investment. But what about a good VC? What makes a good VC? Is it someone that just likes to talk about themselves all day long? Is it someone that just has all the relationships in the world?

 

Richard Kerby  (20:45):

Yeah.

 

Dhani Jones (20:46):

What differentiates... Let's just call it the smart people from the not so smart people, the successful people from the not so successful people? And by the way they might be... They're not necessarily mutually exclusive either.

 

Richard Kerby  (21:00):

Exactly right. I know a lot of smart people who just haven't been successful and doesn't mean that they're not great investors or not doing it right or wrong, just that a lot of, I think honestly luck plays into this. The good thing though, I guess, is that as you get lucky once or twice, your chance of becoming quote unquote, lucky again, go up because now everyone's associating success with Dhani and therefore I got to send my best deals to Dhani. I know, man, Dhani has got this special sauce.

 

Dhani Jones (21:28):

Hey, make sure everybody's hearing this. I keep saying it. So the best deal is Dhani.

 

Richard Kerby  (21:33):

Keep selling on the special stuff to Dhani.

 

Dhani Jones (21:33):

Throw My name out there.

 

Richard Kerby  (21:37):

So, you're just winning begets winning. People want to play in the NFL with a winner. People want to be associated with a winner on the investor's side and the founder's side. I think that's part of it. At the end of the day I think there's four or five things that you got to do well in concert to be great at this gig. And I'm not great at it myself. So, I'm trying to get there every day. But I think one is, you got to be able to find opportunities. And so, can you be aggressive in whatever fashion you want in terms of sourcing? Because if you can't find a great investment, it doesn't matter if you believed in it because you never saw it. So, you never had access to win the first place.

 

Richard Kerby  (22:13):

I think two, you got to be able to do the work to figure out if it's an investment opportunity that you want to make. And so, you can't just blindly fall in love with whatever the CEO says, because he or she may be wrong on their assumptions. And if you have it on the work to understand that, you can get in trouble really quickly. And then two after, I guess, third, or after you've done your homework, can you win? That's really, really important. Lots of people see great investments and wanted to do the investment. Like you could have said, hey, I really wanted to invest in Facebook's, I don't know, Series A or [inaudible 00:22:48] or Series B, but excel but you didn't do it, so you didn't win. And so, it doesn't matter.

 

Richard Kerby  (22:53):

Yeah. It's great that you believed in the company and yada, yada, but at the end of the day, the founder chose somebody else. And if you can't win, it doesn't matter what you see, or if you get to the right conclusion. Winning is really important and winning is not easy, particularly when a founder has to pick A lead firm, not 17 leads. Hey, I could be one of 17, but can you be one of one? And that's really hard to do. And so, you'll be able to demonstrate that. And then after the fact, you got to be able to demonstrate, hey, I can add value to that founder. And not to say that venture investors are always providing value, any capacity to a founder. I think at the end of the day, the founder will win or lose irrespective of the founder most times, vast [inaudible 00:23:33] time.

 

Richard Kerby  (23:33):

But if you can find ways to be helpful there, the chances of that founder wanted to refer more and more of their best high quality founders to you goes up, and that increases your chance of seeing the next great thing. And once again, it begets that winning thing again. And then lastly, I'd say if you are part of a firm, so you've got colleagues and other partners to work with, being able to sell this opportunity to your colleagues is important as well. Because oftentimes you may not be able to just say, "Hey, I'm going to invest in this deal because I want to." It's like, no, you got to get Dhani to say yes too, and you might need this person to say yes too. And so, being able to sell why a firm should be doing something is also important if your firm has more than one partner.

 

Richard Kerby  (24:13):

And so, those are the things I think you need to get right. And you can't just get one of those things right. You need to get them all right every single time to be as successful as possible. And then yes, you need some of that luck to go in your favor. There are companies that, because their sector died during COVID, that's really unlucky. Can't break that. If we could, we probably have a lot more money right now, but not both of us, but we couldn't. And two though, there's some sectors where COVID was great for them and those companies are crushing now. And so once again, you want to be on the right side of luck at times.

 

Dhani Jones (24:46):

That's what I would call the deal making mindset. You got to win every single one all the time. I would say that challenging piece of getting everybody around the table and having consensus. That's probably the art form that takes the most amount of time to figure out, because on the one hand, you want people to agree with you. On the other hand, you want to be challenged in order to push the limits. And then on the other hand, you want to go as fast as you possibly can. And on the other hand, you want everybody to take their time because you want to make sure that it's the right thing to do.

 

Dhani Jones (25:24):

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Dhani Jones (26:03):

Check it out at ansarada.com/quote. You know I like a winning team. So, say it with me, ansarada.com, for your next winning outcome. How do you stay passionate in this world of venture investing? Because of all of sometimes the mundane things and then some of the exciting things. I'd imagine you go on the same roller coaster that so many other people go on as well.

 

Richard Kerby  (26:33):

Yeah. No, I'll just throw one caveat out to my last response there on the consensus internally. I actually don't believe in consensus at all. I think that it's just terrible deal making personally. I think the most exciting opportunities tend to be the most controversial ones. And so, I like to see controversy in discussion because it means that whatever it is you're talking about, it's probably really hard to get done and it's not obvious. And those are things-

 

Dhani Jones (26:59):

So wait, so if you do that, so how do you and your partner say yay or nay? How do you vote?

 

Richard Kerby  (27:03):

Yes. It depends on the firm. And so, some firms it's... I think there are firms exist that are consensus, but I think that's actually the minority of firms. I think most firms probably have some form of scoring. Where it's like, hey, there's five of us. You need two or you need three or whatever it might be. I know there are some firms too, where it's like, you just need you and somebody else. And there some firms who are just like, hey, as long as you want to go do it, go do it. And so, it's a variety of ways in which firms have outlined their process to get deals done. But no matter what the process is, it doesn't rule the fact that you have to be able to explain and sell internally on why it should be happening, because you should get the response of folks.

 

Richard Kerby  (27:44):

And I think what it works well, is that the answer is yes, no, maybe, is the response you can give. And let's say everyone is at a no, but you can get some folks from no to maybe. You brought them along, which is great. That means that they are now more encouraged by that. And then I think the second piece is, you've basically unearthed other questions, because there may be saying, I just forgot to think about my... Oh man, Dhani made a great point. That point depending on how it's answered, could kill the company. So, let me actually go do more work on that too. And so, I think that's part of the process that you want to understand, but at the end of the day, no matter what firm you're at, usually one person, one partner, I should say, has spent the majority of the time with that founder.

 

Richard Kerby  (28:22):

And so, to have your belief and judgment be discounted by someone who's spent five minutes with the founder, I think that's unfair. And so, it shouldn't be that way at all.

 

Dhani Jones (28:33):

So, when you got into the investing world and found yourself on this continual learning journey, did you think that you were going to be at the point with Equal Ventures or was that never a thought at the very beginning of your journey?

 

Richard Kerby  (28:48):

Very beginning, not in my purview at all. I couldn't see it from any angle, any peripheral vision wasn't there. For me, it was just like, I think this is a cool industry. I want to learn and go do it. And then as I found it to be more and more compelling, I got more excited by it. And then a venture over time, be like, start your own firm think starts to creep in, but you don't know truly if you're ever ready to go do that either. So, it's really daunting. Whatever entrepreneur you are, whether it's finding a tech company, a brick and mortar company, a fund, it's always scary going out to start it on your own or with somebody else or in any capacity. And I realized, sorry, I didn't answer your previous question too on the passion piece.

 

Richard Kerby  (29:31):

But like anybody else, ebbs and flows, ebbs and flows and sometimes you can get into a deal rut where you're like, man, I haven't done something in a really long time. Am I not seeing the good things? Do I suck? What's happening? And so, that definitely keeps in your mind for sure. What keeps me going is meeting a great founder. It only takes one founder and you meet in a day, a week, a month to be like, this is so exciting. Whatever they're working on, it's so interesting and I can't stop learning about it. And two, when you chat with one of your hosting founders and you can find ways in which that you can be help with them. That's awesome. When you can say, "Hey, Dhani, you need help with what?"

 

Richard Kerby  (30:09):

All right, cool. Give me a week. Let me try hack at it for you. And then when you can actually have tangible help to that person, you're like, this is actually why I do this. This is great. Because even though it may be a really, really small thing, it takes something off their plate and if it takes something off their plate, they can focus on something that's way more important for them long term. And that little thing, each one of those little things increases the chances of them having success in the future.

 

Dhani Jones (30:34):

So, how do you think about the legacy? I know you just kicked off Equal Ventures, but how do you think about the future of Equal? How do you think about not only recruiting, but also diversifying that recruiting, just as much as diversifying the portfolio?

 

Richard Kerby  (30:53):

Yeah.

 

Dhani Jones (30:53):

And how do you convince people that you're thinking about things differently in a landscape of venture capitalism that's changing over time.

 

Richard Kerby  (31:02):

Yeah. I think with long term success for us looks like, I'll say the Math. Math's obviously easy to understand, but the success is like, are we a founders first call? Is a brand new founder starting a brand new company. And when he or she thinks of venture firms that she wants to go reach out to, is Equal Ventures one of them or the [inaudible 00:31:24]? I think what the point you want to get to. Because once again, that means you're going to see the highest quality stuff, if you can get into that nomenclature when the first thing is that on top of your head. Now, with that said we're nowhere near that. People don't know who the hell Equal Ventures is. We're nobodys. We're trying to get there and do the work to get there.

 

Richard Kerby  (31:43):

That means investing in good companies and founders and hopefully those companies have success. And then that makes us look smart than we actually are. And folks buy that, that we're smart than we actually are. And then come, want to talk to us. And so, those are things that we're trying to implement internally. And I think at the end of the day, people want to work with other people they like. And obviously you got to be smart and work hard and whatnot. But if people don't like you and want to work and be around you, it doesn't matter. They're not going to spend... You might be able to con them to come work with you, but they're going to figure out real quickly, man, I made a mistake, why am I at this place?

 

Richard Kerby  (32:16):

And they're going to be gone. And then when they're gone, they're going to tell everybody else like, "Hey, you do not want to go there. Let me tell you, I've been in there. It doesn't look good in the inside. Let me tell you what's wrong." And so, people want to work with just great people that they respect, want to spend time with. And so, I think that's really the ultimate way to attract great people, regardless of what industry you're working in.

 

Dhani Jones (32:35):

One of my friends in Cincinnati used to always say, people want to do business with those that they know, like, and trust. Right?

 

Richard Kerby  (32:42):

Right.

 

Dhani Jones (32:43):

And so, that's a new way to look at a similar formula. But relationships definitely do matter. Both short term and long term, whether they say it takes years to build relationships, it takes seconds to destroy them. Right?

 

Richard Kerby  (32:56):

Right.

 

Dhani Jones (32:56):

It takes seconds. And people don't realize that you could do one thing wrong, people are like, you know what, I should have recognized in the first place. I'm not giving them another chance. So, that's tough. So, while you're building those relationships I... There's two last questions, one being, tell me a little bit about this stealth mode.

 

Richard Kerby  (33:17):

Sure.

 

Dhani Jones (33:17):

Because I know that you're building relationship without me, Kerby. You're building relationships and you're not telling me about them Kerby. I'm hearing about stealth mode. I'm not getting any email. I'm not on WhatsApp, Discord. I'm not getting anything in my text messages, nothing, no emails, what's up with stealth mode? Yes. I know it's stealth, but humor me for a little bit.

 

Richard Kerby  (33:39):

That's right. I will go ahead, Dhani. Dhani, you have easy access to me, you can just text me. So, it's another level above stealth mode. So stealth mode is a community that created Charles Hudson a long time ago. Now, I want to say it was 2011-ish. Let's call it. And it's a chapter based community. So, we've got three chapters. One in the Bay Area, one in New York and one in LA. And really it's just an offline and online community for African Americans in tech. That's just where there's black folk in tech, let's get together. Digitally is via Google groups. It used to be Google groups in slack, but I realized only engineers use slack. And so, there wasn't enough engagement there. And so, now it's actually fully Google groups, in any place where the discussion occurs. And the community really discusses about anything tech related.

 

Richard Kerby  (34:30):

It could be, hey, I'm starting new company, can you guys give me some feedback, help? I'm looking for funding, who's interested in this category. I'm looking for co-founder, help me out here. I think even more important question of, hey, I'm working at this big company and people don't understand, I interact with black people inside their company. Questions like that you can't find in a blog post because trolls come running. These convos we have, and still at our convos that are trusted community. And I think that's why folks feel comfortable saying whatever they want about anything in the industry and outside the industry, because they know it's a safe spot. Yet people have push back and disagreements within the community, but it's respectful. And you know that your thoughts are not going to blasted on Twitter or Reddit to get flamed and exposed by anyone else just because it's your thoughts.

 

Richard Kerby  (35:17):

And so, it's really, I think a trusted community for those within tech, the members of the communities are folks on the investing side, they're founders, they're engineers, they're operators, they're lawyers, they're recruiters. So, anything that encompasses what a tech ecosystem needs to run are what you can see from the members in the community, where now I think somewhere between across the three chapters, 1500 to 2000 folks-ish, roughly. The offline component has been stagnant because of COVID, but hoping to get those ramped back up in the short term, because you can have a great time and meeting people online, but nothing beats the in person piece. And so, we want to get back to that as soon as possible.

 

Dhani Jones (35:58):

Well, big up to you and Charles Hudson. It's fantastic. And I can't wait to get on the list. I can't wait to get full access. I'm just saying.

 

Richard Kerby  (36:06):

You shoot me a text on it. I might be able to make room for you maybe. We'll see.

 

Dhani Jones (36:10):

Okay. All right. Well, if there's room, I'll send you 100 emails, and maybe one of them will get through. But that I think stealth mode is one of the most important eases that everybody take away. You need to have community. You need to have those that have had those experiences, that they can provide you that feedback, that solicited advice, because we all need to know what's around the corner. That's how you become successful. If you go around the corner, you don't know if the car's coming, you're going to get hit. But all of a sudden they tell you just wait a beat and the car passes, you're going to continue on. That's how you find success by knowing what are some of the hazards along the way.

 

Dhani Jones (36:45):

And then also different ways to cross the street, if you will. So, one of the things that we always end with and I'd imagine you have a good sense of this, but where do you like to celebrate your meals and deals? I know it might be with stealth mode in your Google docs or it might be at a restaurant or it might be a bar, but where do you like to celebrate your deals? We always like to close out the Pathfinders by figuring out where you celebrate and have a good time.

 

Richard Kerby  (37:10):

I'm not really good at celebrating wins, unfortunately, but what it is, is like hanging out with family and friends in any capacity. It doesn't really matter where it is, because I think the venue is less important than those who are around. And so, as long as there are right folks around to celebrate, you could pick any venue you want, and I'd be happy.

 

Dhani Jones (37:28):

Good. Well, hopefully I get invited to some of these celebrations as Equal Ventures continues to do good deals. Richard Kerby Kerby, I appreciate you being here today, sharing the wealth of knowledge that you have and the continued efforts that you have to building out your platform, but also bringing other people to the table as well. So, I just want to say thank you so much, Richard Kerby.

 

Richard Kerby  (37:50):

No, thank you Dhani. I appreciate the time, and thanks for making time for me.

 

Dhani Jones (37:53):

Boom.

 

Richard Kerby  (37:55):

Success.

 

Dhani Jones (37:56):

Success. Thank you, my friend.

 

Dhani Jones (38:07):

A special thanks again to Richard Kerby Kerby for being with us today. It's really amazing to see the work he's doing to encourage diversity investing with his networks like stealth mode and how Equal Ventures is coming out, investing in deal making from a new perspective. If you're enjoying the Pathfinders, please make sure to leave a review so more people can find the show. Until next time I'm Dhani Jones, and this has been the Pathfinders presented by Ansarada.