Max Altman & Ben Braverman chart Saga VC's maiden voyage with Mark Suster | E1948

Max Altman and Ben Braverman of Saga VC join guest host Mark Suster. (00:00:00)

• Max Altman and Ben Braverman, two of the three founders of Saga Ventures, join Mark Suster as guests on this episode of This Week in Startups.
• Saga Ventures is a new venture capital firm founded by Max Altman, Ben Braverman, and Thompson Winger.
• The firm focuses on investing in early-stage startups in the enterprise software, fintech, and consumer sectors.
• Saga Ventures believes that the best way to get rich is by doing something really useful and providing value to others.
• The firm is excited to help startups succeed and close the gap between success and failure.

Building up Saga VC’s maiden voyage fund. (00:02:23)

• Saga Ventures, a newly established venture capital firm led by Ben Braverman, announced a $125 million fund despite challenging fundraising conditions.
• The name "Saga" symbolizes the journey and struggles entrepreneurs face in building successful companies, inspired by prominent companies like Apple and Tesla.
• Fundraising required extensive effort and travel to meet with potential investors across the country, as venture capitalists must visit numerous cities to meet individual investors in diverse locations.
• The process of raising funds provided valuable insights, fostering empathy for entrepreneurs seeking funding and emphasizing the importance of being conservative and thoughtful when deploying capital.
• Referrals are the most effective leads in venture capital, increasing the chances of success compared to cold outreach.

Saga VC’s reason to live and uniqueness. (00:07:48)

• Saga VC's uniqueness lies in the diverse backgrounds of its founding team.
• Max Altman has a product background and sales experience at Flexport.
• Thompson has a data science background and experience at Square Capital.
• This configuration allows Saga VC to cater to different needs of founders.
• Founders have different preferences and needs when it comes to investor support.
• Saga VC aims to be flexible and adaptable to meet these diverse needs.

Mercury - Join 100K+ startups banking with Mercury (00:09:48)

• Mercury offers integrated financial workflows powered by banking.
• This provides accurate visibility into all money movements in an account.
• Users can check their bank account for a real-time view of payments and invoices.
• Mercury allows users to pay bills directly from their bank account, maximizing cash flow.
• It simplifies bookkeeping by eliminating manual data entry and minimizing errors.
• By categorizing bills upon payment, details sync with accounting software.
• Mercury simplifies financial workflows, providing more control and efficiency.
• It enables faster work and allows startups to focus on running their businesses.

What Ben Braverman brings to Saga VC. (00:11:22)

• Ben Braverman's background in sales and marketing is unique among VCs.
• He is cautious about offering help to founders, as the best founders don't need it.
• He is interested in founders who are living in two worlds, with deep technical knowledge and a deep understanding of an important part of the economy.
• He is excited about founders who are passionate about their work and live together in a house together.
• Saga VC looks for founders who are living in two worlds, with deep technical knowledge and a deep understanding of an important part of the economy.
• They are interested in founders who are passionate about their work and live together in a house together.
• They are cautious about offering help to founders, as the best founders don't need it.

Ben speaks about what he learned working with Ryan Peterson at Flexport. (00:13:17)

• Ryan Breslow, co-founder of Bolt, learned from Parker Conrad, co-founder of Rippling, that success comes from confronting problems and conflicts, and that true wealth lies in providing genuine utility to people.
• Max Altman, co-founder of Altman Solon, was impressed by Conrad's product and sales skills, particularly his ability to understand customer needs and deliver exceptional products.
• Conrad's unique approach to customer discovery involved listening to expressed needs but building products based on his understanding of underlying pain points.
• Altman was drawn to Zenefits due to Conrad's ambitious vision and unwavering belief in the company's potential, despite its early stage and unconventional business model.
• Successful founders, like Parker Conrad, exhibit an intense drive and ambition, constantly pushing themselves and their teams to achieve their goals.
• Maintaining a high standard and not accepting failure or mediocrity is crucial for success in the startup world, similar to the expectations placed on professional athletes.
• Altman emphasizes that while making mistakes and learning from them is acceptable, a CEO must avoid complacency and never accept failure if they want to build a highly successful company.

Max Altman & Ben Braverman chart Saga VC's maiden voyage with Mark Suster (00:00:00)

• Max Altman and Ben Braverman interview Mark Suster, a General Partner at Upfront Ventures, about his new venture capital firm, Saga VC.
• Saga VC focuses on early-stage startups in the enterprise software, fintech, and consumer sectors.
• The firm invests in companies that have a clear path to profitability and a strong team.
• Saga VC typically invests $1-2 million in seed rounds and up to $10 million in Series A rounds.
• Saga VC's portfolio includes companies such as:
  • Amplitude
  • Brex
  • Carta
  • Figma
  • Lattice
  • Plaid
• These companies have a combined valuation of over $100 billion.
• Build a strong team. The team is the most important factor in a startup's success.
• Focus on product-market fit. Make sure there is a real need for your product or service.
• Be capital efficient. Don't raise more money than you need.
• Be persistent. It takes time to build a successful startup.

The advantage of witnessing “great” at the top of the industry. (00:21:14)

• Max Altman and Ben Braverman, investors, discuss the qualities they seek in founders when deciding to invest in their startups.
• They prioritize founders with boundless energy and the ability to accomplish a significant amount of work daily, even if it's not perfect.
• Founders should be compelling enough to attract talented individuals to join their company, even if it means making financially unfavorable decisions.
• Altman and Braverman emphasize the importance of founders being able to successfully hire their 30th employee and convince them to choose their startup over higher-paying corporate jobs.
• The X-Factor in entrepreneurship, according to them, is the ability to persuade people to undertake seemingly unreasonable tasks.

The X-Factor in strong leaders and founders. (00:25:54)

• The X-Factor is a sense that someone is destined for greatness.
• Joining a startup can be a good financial decision in the long term due to the access to greatness and the peer group it provides.
• Being in a startup is similar to an MBA in that it provides valuable learning experiences.

Curotec - Check out (00:29:16)

• Latin America has many talented developers who are on the same time zone as the US, and the cost of living and salary structures are different, making it a cost-effective option for startups to hire developers from the region.
• Curotec is a company that helps startups hire Latin American developers, taking care of payroll, compliance, and connecting them with the best talent.
• Curotec is trusted by industry-leading innovators like Automattic, the makers of WordPress, and Comcast.

Unique advantages Max and Ben on the foray into venture. (00:30:27)

• Max Altman gained early exposure to investing through his brother's involvement in Y Combinator and his own experience in product management.
• Altman believes that seeing a large number of deals is crucial for developing investment skills and advises against making decisions based solely on the first few opportunities.
• Ben Braverman transitioned from being a founder to a venture capitalist, acknowledging the significant mindset shift and need to learn new strategies.
• Successful venture capitalists like Venod Khosla and Bill Trenchard remain deeply engaged with founders and startups despite their success.
• The venture capital landscape has become more competitive, with an increase in venture capital firms but not a proportional increase in good companies.
• New York has emerged as a prominent force in venture capital, offering a strong network density and a growing number of successful startups.
• Saga VC, led by Max Altman and Ben Braverman, plans to focus its investments primarily in San Francisco and New York, with Austin being the third biggest market.
• San Francisco is considered an attractive investment location due to its ambitious and educated population, despite challenges such as high rents and competition for employees.
• San Francisco's stark wealth inequality is a controversial aspect of the city, potentially affecting the level of support and assistance for individuals who do not achieve great financial success.

What Saga VC looks for in AI companies to fund. (00:44:01)

• Saga VC invests in companies that utilize AI to enhance existing businesses rather than core AI companies.
• Examples of industry-specific uses of AI include evaluating healthcare providers, underwriting thin-file credit consumers, analyzing call center data, and monitoring baby development.
• Saga VC primarily invests at the seed stage and avoids leading Series A rounds due to their competitive nature.
• The fund size of $400 million was chosen to strike a balance between collaboration with other funds and having enough ownership for good returns.
• Saga VC occasionally takes board seats, but not frequently, especially in the early stages where founders prefer to wait for a Series A round.
• The goal is to help founders secure a Series A round from a top-tier lead investor and then transition to a supporting role.
• The closed nature of the venture capital industry emphasizes the importance of trust and relationships in accessing deals.

Praise for Saga VC’s Thomson Nguyen in his absence. (00:52:59)

• Thompson, with his background in applied mathematics and data science, is a valuable asset to Saga VC. He is known for his patience and willingness to support founders from the earliest stages. His successful track record includes building and exiting companies like Frame Data, which was acquired by Square. He is also associated with prominent figures in the tech industry, such as Kevin Mahaffey and Jack Dorsey.
• Saga VC encourages potential founders and interested individuals to reach out to them on Twitter, where they are actively engaging and accessible.
• Max Altman and Ben Braverman, co-founders of Saga VC, were interviewed on the E1948 podcast hosted by Mark Suster. They discussed Saga VC's investment strategy, which focuses on early-stage startups, and their openness to doing deals in Los Angeles, recognizing the city's thriving startup ecosystem.
• The hosts expressed their gratitude for the opportunity to be on the podcast and wished Mark Suster good luck in his pickleball game later that day.