Paris Hilton & M13's Carter Reum: advice for founders in a tough market, and a look back on their investing careers - D.F.A. #6

Plus: The D.F.A. Difference: Sales Super Soldiers, and What We Think Will Happen To VC Between Now and 2032

Nov 09, 2022

In this sixth newsletter:

An interview with Paris Hilton and Carter Reum
What We Think Is Gonna Happen To VC Between Now And 2032
Got Startup founders Facing Sales or Fundraising Problems? We Have 3 Resources For You!
Announcing Subscriber Chat!

In the last 5 weeks, we’ve had lots of great conversations. If you’d like to have coffee with D.F.A. Capital, here are the types of folks that we like to meet with:

Have a background in SaaS, telecom, agtech and ideally functional expertise in customer relationship management or marketing/sales automation (CRM)
You love meeting with founders a few times a year, and are already working with a group similar to D.F.A.
You love sales like we do (we work with sales-focused founders)

To book a time to chat, and learn more about the founders we work with, click here.

If you were to walk up to me at a party and say “Adam, name one super-visible female investor in the United States, who’s really focused on female founders.”, I’d say “Easy. Paris Hilton.” As the economy was beginning to get kind of challenging, I thought “we’ve been interviewing baseball players, musicians and founders. Why don’t we interview a couple that are *both* investors.” Then I remembered that Paris is also a musician. She gets about 750k monthly spins on Spotify - that’s about as many as a big indie rock band like The Mountain Goats gets. Her tunes have some serious staying power!

I first got to know Hilton’s husband Carter Reum a little while after he and his brother Courtney started VEEV Spirits in 2007 (I used to do social media strategy for a lot of food and beverage brands 2008-2012). The Reum brothers sold VEEV and founded M13 in 2016. M13’s portfolio includes many brands you may know, like Lyft, Matterport and Pinterest.

Hilton’s upcoming media summit, 11-11, is a super-exciting event. Hilton’s known as one of the female leaders in web3. She gathers 200 leaders across media, entertainment, brand, gaming and web3 to talk about how the power of blockchain and web3 will disrupt these spaces in the future. She founded 11:11 Media in 2021 to elevate creators, brands and IP thru the power of storytelling by defining pop culture, and doing so across television, film, podcasting, products, digital, web3 and the metaverse. Here’s 5 questions, with Paris Hilton and Carter Reum.

Carter, describe Paris as an investor, and Paris, describe Carter as an investor.

Paris: Carter is thoughtful, insightful and I love his instincts having seed invested in so many unicorns before they became household names, like Ring, Rothy’s, Daily Harvest and others.

Carter: I think if you look back at Paris’ career its been defined by being future thinking and one-step ahead of every turn from reality tv, to personal branding, to building a global product business, to social media to web3 to launching her media co 11:11 Media that defines pop culture across tv, film, podcasting, web3, products, digital and the metaverse. She sees future trends before others and that’s what makes her such an incredible investor and she has an incredible eye for talented founders – obviously she loves to back female founders and surrounds herself with so many incredible ones.

2. Now Carter and Paris, was each description actually accurate, or totally off-the-mark?

Paris: Ahhh, my husband is so kind. But I think he’s right, as when I look back at the last two decades, I’m most proud of being one step ahead of others in predicting the future but also I’m proud that I have been unapologetic in the way I go thru life and get behind trends I believe in, like web3.

Carter: I think she’s right as having seeded 8 unicorns I’ve mainly relied on instincts and pattern recognition in what to look for in a founding team, and an idea.

3. If each of you had to give one piece of advice to startup founders as we enter markets in the next 12 months, what would it be?

Paris: Be a boss. Some days will be harder than others in this environment, but stay positive, be solution-oriented and don’t be boring, as I always say, even at work.

Carter: Execute, execute, execute. The margin of error will be smaller than ever in a recessionary environment so founders need to execute better than ever while focusing on what drives their business forward. As I always say founders will need a telescope in one eye (being future thinking), and a microscope in the others (looking at what right’s in front of you).

4. If each of you could give a startup founder one song to listen to before a big pitch, what would it be?

Paris: Stars Are Blind, duh! It puts me in a good mood every time I listen to it so hopefully it works the same for others.

Carter: The Rocky Song as it reminds me to push myself and fight thru adversity every time I listen.

5. Last question: if you could rewind your investing career 5 years and do 1 thing differently (not any particular investment), what would it be?

Paris: I wish I had started to invest earlier as I’m just blown away by all the incredible founders and innovative companies out there and just love investing behind these incredible journeys now.

Carter: We’ve built M13 into 41 people and 3 offices over the last five years so if I’m being honest I’d do the exact same thing all over again as I believe we’ve been an established firm and the sky is the limit for what we can achieve.

If you have founders that are having trouble raising capital right now, we have three things that will be really helpful, and there’s no cost:

SellandRaise - free sales accelerator. 200 founders have joined, and 3 new founders join every day. Contains 70 hours of sales and fundraising training.
Foundersuite - free software that gives founders fundraising superpowers. It’s been used by startups to raise $9.7B in funding. It’s an investor database, customer relationship management system and virtual data room. If they want to use the paid version, they can use the discount code Metz20. Their investors can also log in to watch them raise their round. There’s a webinar on 11/11 to teach them how to use it, and they can register here.
2500 Investors: If your founders need a list of 2500 investors to use with the free version of Foundersuite, send them this link.

The D.F.A. difference: Sales Super Soldiers!

Over the next decade, capital is likely to be far less plentiful in VC, if you believe higher 10-year treasury yields are here to stay. We wrote about it in D.F.A. #4 and D.F.A. #5.

Here’s what we think is going to happen in the next 10 years.

New or lower-tier VC firms will be hard-pressed to compete for the most sought-after entrepreneurs from high-tech hot spots participating in the hottest new industries, and even harder-pressed to attract capital.

New VCs will need to be really different.

First, let’s go over what’s not different:

Looking for the next 10x (or 100x!) engineer who just built an awesome new product or service with a seemingly great product/market fit (PMF)
Constantly monitoring high-tech hot spots for young male founders who fit the bill (the vast majority of funding goes to white male founders). Further support for that data is here, here, here, here, here, here, here, here and here.
Biasing investments towards the hottest, society-transforming industries of the day, with potential for several unicorn winners, if not a decacorn or two.

This tried-and–true model is the military equivalent of attempting to recruit the most elite soldiers to see which ones survive training to make the special forces, so they can participate in high-leverage missions in the most critical hot spots around the world. And yes, we know, this model works. But . . .

What if instead of having to find and compete for elite talent, we take, you know, regular, ordinary people and enhance them?

It could be Steve Rogers (Captain America) ingesting a serum. Or Kamala Khan (Miss Marvel) sliding a bangle onto her wrist. Or Sam Wilson (the Falcon) donning wings and a jetpack.

Of course, in VC, we’re not talking about fictional or real-life super soldier technology to develop an army of supersoldiers. We’re talking about sales (newsletter #3).

Salespeople don’t need military gear. They need very up-to-date training and really great software. Typically, that’s amazing sales-tech, mar-tech and customer-relationship management software. We work with those kinds of founders, primarily.

In other words:

How about taking ordinary entrepreneurs from all walks of life and training them to be software-enhanced sales supersoldiers. And, how about sharing some of this software with investors as well?

Enhancing sales productivity with software is not a new idea. Sales productivity software has been available for 4 decades. But what if all these various software pieces were streamlined to work together better? What if there was software optimized for founders? What if some of this software also had benefits for investors? What if there was an organization capable of training and transforming ordinary people into sales supersoldiers?

D.F.A. not only has these capabilities built into its DNA; we’re actively working on software to take these productivity enhancements to the next level. We already briefly discussed Foundersuite in our last newsletter. There are many pieces of software that we teach founders to use in Sellandraise. If you’d like to learn about them, send your founders to us, and they will tell you all about them immediately. We will teach your founders how to sell. We ask nothing in return. In this newsletter, we’re taking it to the next level. Such as:

Foundersuite for raising capital (see above)
Sellandraise for accelerating sales (see above)
A very big release early next year that we can’t yet discuss . . . but we think is going to elevate our founders, our investors, and us to an entirely new level.

If you’d like to learn about them, send your founders to us, and they will tell you all about them immediately. We will teach your founders how to sell. We ask nothing in return.

Excited as we are about the prospect of turning ordinary entrepreneurs into sales super soldiers, we want to be clear that the traditional engineering genius model works okay for the people that it is currently helping, mainly white males. And . . . if the next Google were staring us in the face, we like to think we wouldn’t ignore this obvious home run.

But . . . we expect our investments in young white guy engineers from Silicon Valley to be the exception, not the norm.

We’d rather perfect the sales super soldier formula while everyone else fights for a piece of a shrinking pie.

Subscriber Chat

Today, we’re announcing a brand new addition to our Substack publication: the D.F.A. Capital subscriber chat. It works on iPhone right away, and it’s coming very soon to Android. If you want to see what chat is going to look like in the Substack mobile app, it looks like this:

This is a conversation space in our Substack app that we set up exclusively for our subscribers — it’s kind of like a group chat or live hangout. We’ll post short prompts, thoughts, and updates that come our way, and you can jump into the discussion.

To join our chat, you’ll need to download the Substack app (messages are sent via the app, not email). If you’d like to, turn on push notifications so you don’t miss a chance to join conversation as it happens.

Thanks for reading D.F.A. #6! If you have any more suggestions for interviews, definitely drop us a line!

Regards,

Adam

P.S. To book a time to chat, and learn more about the founders we work with, click here.