Insights from Tech Scenes Beverly Hills with Mark Mullen, Co-Founder of Bonfire Ventures

In this episode of Tech Scenes Beverly Hills, Jeff Martin sits down with Mark Mullen, Co-Founder of Bonfire Ventures, for a candid conversation about venture capital, founder psychology, company building, pattern recognition, leadership, and what actually drives startup success. While venture capital is often portrayed as a business of markets, valuations, and financial engineering, Mullen makes a compelling case that the earliest stages of investing are ultimately about people. Long before revenue scales, product-market fit emerges, or financial metrics become meaningful, venture investors are making decisions based on founders and their ability to navigate uncertainty.

Mark's entrepreneurial and investment journey began far from Silicon Valley. Raised in Colorado, he built an international finance career that eventually led him to work alongside legendary entrepreneur and investor Bill Daniels. Daniels became one of the most influential mentors in Mullen's life and helped shape many of the leadership principles that continue to guide his approach today. The experience exposed him to entrepreneurs around the world and taught him that while industries, technologies, and markets change, the qualities that make exceptional founders remain remarkably consistent.

One of the most valuable insights from the conversation is the reality that early-stage investing contains very little concrete information. Unlike later-stage investing, where investors can evaluate years of financial performance, customer data, operational metrics, and market penetration, seed investing often comes down to evaluating people. Investors are assessing whether a founder can learn quickly, adapt under pressure, attract talent, solve problems, and continue moving forward when conditions inevitably become difficult. The founder becomes the primary variable because there is often little else available to measure.

This creates an important lesson for entrepreneurs. Founders frequently spend enormous amounts of time refining pitch decks, financial projections, and fundraising narratives while overlooking the leadership skills that ultimately determine success. Investors may be evaluating the business, but they are also evaluating how founders think, communicate, make decisions, process feedback, and respond to adversity. A founder who demonstrates curiosity, resilience, self-awareness, and the ability to learn often creates more confidence than one who simply presents an impressive slide deck.

The conversation also explores a challenge that many growth companies face as they begin scaling. Founders are often exceptional builders, product creators, engineers, or salespeople, but those skills alone do not automatically translate into organizational leadership. As teams grow, the role of the founder changes dramatically. Instead of personally executing every function, founders must learn how to align teams, delegate responsibility, establish systems, create accountability, and help others perform at a high level.

This transition represents one of the most difficult phases in company building. Many founders become the bottleneck inside their own organizations because they continue operating as if they are still a team of five when the company has become a team of fifty. The ability to evolve from operator to organizational leader often determines whether a company successfully scales or stalls.

Mark highlights that many first-time founders underestimate the importance of operational discipline. Great companies are rarely built through constant chaos. While startups often appear dynamic from the outside, the most effective organizations develop systems, rhythms, and processes that create clarity amid uncertainty. Teams need alignment around priorities. Leaders need visibility into execution. Employees need clear ownership and accountability. Without these structures, organizations waste time, capital, and energy pursuing too many initiatives simultaneously.

This is particularly relevant in today's AI-driven business environment. As technology accelerates, organizations gain access to more information, more tools, and more opportunities than ever before. However, increased information does not automatically create better decisions. In many cases, it increases complexity. Leaders must become more effective at identifying signal amidst noise, prioritizing the initiatives that matter most, and helping teams maintain focus despite constant change.

The discussion also challenges several common assumptions about venture capital itself. While the media often focuses on billion-dollar outcomes and headline-grabbing exits, Mullen points out that most venture investing is far less glamorous than people imagine. Success requires patience, discipline, and the ability to make difficult decisions with incomplete information. Many investments fail. Many promising companies never achieve scale. The few exceptional outcomes often obscure the countless lessons learned along the way.

This reality reinforces another important theme from the conversation: venture capital is ultimately a craft. Like entrepreneurship, investing improves through repetition, pattern recognition, experience, and continuous learning. Investors develop judgment by observing hundreds of founders, companies, mistakes, pivots, successes, and failures over time. Founders develop judgment in much the same way. The best leaders do not emerge fully formed. They build capability through experience.

For growth-stage organizations, one of the clearest takeaways from this episode is that founder development and organizational development are inseparable. As companies grow, leadership systems become increasingly important. Strong execution does not happen accidentally. It emerges from clear communication, aligned teams, disciplined operating rhythms, and leaders who are willing to evolve alongside their organizations.

The companies that succeed over the long term are rarely those with the most exciting ideas alone. They are often the companies led by founders who continuously learn, adapt, build strong teams, and create systems that allow execution to scale beyond their personal bandwidth.

In the end, Mark Mullen's perspective serves as a powerful reminder that while markets, technologies, and industries change, company building remains deeply human. Great founders learn. Great teams align. Great organizations execute. And great investors continue betting on people who can figure things out when nobody yet knows the answer.

Episode Links

YouTube:
https://youtu.be/OV0EKa06KbY

Spotify:
https://open.spotify.com/episode/4l6Tq1V9mJYz6tGFSZTZUp?si=5NwGzXchTsiUM2FHf6XtkA

Questions and Answers

Who is Mark Mullen?

Mark Mullen is the Co-Founder of Bonfire Ventures, an early-stage venture capital firm focused on investing in software and technology startups at the seed stage.

What does Bonfire Ventures focus on?

Bonfire Ventures primarily invests in early-stage software companies, partnering with founders at the beginning of their company-building journey.

Why do venture capitalists focus so heavily on founders?

At the seed stage, there is often limited data available. Investors must evaluate whether founders possess the judgment, adaptability, leadership, and resilience necessary to build successful companies.

What separates great founders from average founders?

Great founders consistently learn, adapt, attract strong talent, make difficult decisions, and remain focused on solving customer problems despite uncertainty.

Why do founders become bottlenecks?

Many founders continue executing every function themselves as companies grow. Scaling requires delegation, systems, leadership development, and organizational alignment.

What role do operating systems play in growth companies?

Operating systems create clarity, accountability, communication, and alignment. As organizations scale, structured operating rhythms become increasingly important for execution.

Why is founder development important?

Companies rarely outgrow the capabilities of their founders. Leadership growth often becomes one of the most important factors influencing company performance.

How is AI changing startup execution?

AI increases leverage and access to information, but it also increases complexity. Leaders must improve prioritization, judgment, and organizational alignment to maximize AI's value.

What can founders learn from venture investors?

Investors develop pattern recognition through experience. Founders can accelerate their growth by learning from others, seeking feedback, and remaining open to continuous improvement.

What is one of the biggest lessons from this episode?

Great companies are built by founders who combine vision with execution, learning with discipline, and ambition with organizational leadership.

Music by Andrew Applepie - https://soundcloud.com/andrewapplepie

Absolutely. This one has a strong progression from Mark’s formative years with Bill Daniels → how he learned to evaluate people and founders → the realities of seed investing → how venture economics actually work → the founder’s role as companies scale → why “return the fund” thinking can distort good investing. The Bill Daniels story is an especially strong opening.

Tech Scenes with Mark Mullen

Episode Transcript

Jeff Martin in conversation with Mark Mullen

“At the end of the day, the founder has to figure it out. If that person can’t figure it out, we’re not the ones who are going to figure it out for them.” — Mark Mullen

This transcript has been lightly edited for clarity and readability. Repetition, conversational filler, and obvious transcription errors have been cleaned up while preserving the substance and conversational tone. It contains occasional explicit language.

Cold Open — 00:00

Mark Mullen: Venture is such a wide swath now.

Is General Catalyst a venture-capital firm?

Yes, apparently.

But so am I.

And we're nothing like General Catalyst.

We only invest at seed.

That means we come in very early, with a limited amount of information.

At the end of the day, the decision is really driven by the founder.

That's just the nature of our business.

There isn't much more to go on at that stage.

So we're probably a little over-reliant on that interaction with the founder.

Welcome to Tech Scenes — 01:13

Jeff Martin: All right. Welcome to the show.

Mark Mullen: Thank you. Good to see you.

Meeting Bill Daniels — 01:17

Jeff Martin: The big mentor you've talked with me about in the past was Bill Daniels.

That was when you were coming out of banking and getting started.

How did you connect with him?

Mark Mullen: I'm from Colorado, and Bill was a huge figure in Colorado.

I went to college, then worked in San Francisco for four years in banking and private equity.

After that, I went to graduate school at Thunderbird, which was an international-finance school.

At the time, it was one of the top schools in the world for international finance.

It's since been acquired by Arizona State University.

It was originally based on an old Air Force base and had campuses around the world.

You had to learn another language.

You had to live somewhere else.

I spent one of my years in Paris.

It was incredible because about 70% of the school was international.

I met people from all over the world.

As we all know, Americans can be pretty myopic, so having that exposure early in my life—to different countries, cultures, backgrounds, and business interests—was a real eye-opener for a kid who grew up in a small town in Colorado.

The Random Introduction That Changed Everything — 02:35

Mark Mullen: When I was getting ready to graduate, I expected to go work for Credit Suisse in New York.

I was heading down the investment-banking path.

Then a woman who was a friend of my dad's happened to run into him.

This is one of those stories where, looking back, you realize how random life can be.

She asked:

“What's Mark doing?”

My dad told her I was finishing graduate school and getting ready to work in New York.

And she said:

“Has he ever met Bill Daniels? He should meet Bill Daniels.”

She worked for a bank Bill had started in Colorado.

Bill started a lot of things.

One was the Women's Bank.

He'd also started a children's bank where you had to be 12 or younger to be a customer.

Kids brought in their coins, opened accounts, learned how checking worked.

It was a really smart idea.

This woman somehow finagled an interview for me with Bill.

Colorado's Warren Buffett — 03:45

Mark Mullen: At the time, Bill Daniels was a billionaire in Colorado.

The analogy I use is:

If you grew up in Nebraska and someone said:

“Do you want to meet Warren Buffett?”

Of course the answer is yes.

But how the hell do you get a meeting with Warren Buffett?

Bill was like that in Colorado.

Famous.

Well known.

Wealthy.

Had run for governor.

Owned pieces of sports teams.

Everybody knew who he was.

And somehow I got a meeting.

Walking Into Bill Daniels' Office — 04:21

Mark Mullen: I went to his office in Cherry Creek in Denver.

Bill was a Navy hero.

He'd flown hundreds of missions.

He was one of those guys they don't really make anymore.

Didn't finish high school.

Lied about his age to get into the Navy.

Two-time Golden Gloves champion.

Entrepreneur.

Lost all his money.

Made it all back.

Owned sports teams.

Four wives.

Alcoholic.

Died sober.

No children.

He lived a life.

And when you walked into his office, he wasn't physically a huge guy, but he had an enormous presence.

He also had what I would call a puncher's face.

The Details That Stick With You — 05:00

Mark Mullen: He wore beautiful custom suits.

Always had a handkerchief in the pocket.

For probably 15 years after that, I wore a handkerchief in my jacket too.

It actually worked pretty well because I ended up living in Europe for him.

He smoked cigarettes through one of those long filters, which somehow didn't fit the rest of the persona.

The office itself was filled with history.

We owned about 10% of the Lakers.

There were pictures of him with presidents.

Lakers trophies.

Pictures with Magic Johnson and Kareem Abdul-Jabbar.

Notes from world leaders.

And because we were in cable and telecommunications, the office itself was very high-tech for the era.

Then he starts talking to me.

A 45-Minute Interview With No Process — 06:13

Mark Mullen: We talked for maybe 45 minutes.

There was no cellphone to record your thoughts afterward.

No transcript.

You just had the experience.

He asked me a lot of questions.

Looking back, I realize many of them were designed to figure out how hard I was willing to work.

For example, he didn't really want me tied down in a relationship.

Not because he was anti-relationship.

He was basically trying to understand:

“If you come work for me, are you prepared for work to become your life for a while?”

I didn't really understand that until later.

“Mullen, Don't You Fuck It Up” — 06:59

Mark Mullen: As I was leaving, there had been no formal process.

No second interview.

Nothing.

I was walking out of this enormous office.

Then I hear that gruff voice:

“Mullen.”

I turn around.

And he says:

“I spent my whole life putting my name on the building. Don't you fuck it up.”

That was it.

Jeff Martin: Wow.

Mark Mullen: He was chairman at that point.

He was about 72.

The CEO was Brian Deevy, who eventually became another important person in my life.

Within about a week, I was on my way to Guam to work on a deal.

From Denver to Guam — 07:56

Mark Mullen: Bill had a former Navy colleague who had stopped in Guam after World War II and built a cable, newspaper, radio, and television business.

He hired us to sell it.

I literally had to look up where Guam was.

Then suddenly I was there.

That began an 18-year period where I got to travel around the world and work on deals.

Bill passed away about eight years after I joined.

Brian Deevy, who was CEO, barely talked to me for my first year.

I always tease him about that.

It was almost like:

“Bill already decided to hire you. I didn't even get to interview you. How'd you get in here?”

Brian and I are now very close friends.

He's invested in every Bonfire and Double M company.

Mark's First Mentor: His Dad — 08:45

Mark Mullen: Before Bill, my dad was—and still is—one of my biggest mentors.

I'm an only child.

My parents had me when they were about 20.

They weren't exactly planning on having a kid while they were sophomores in college.

Jeff Martin: My wife had her first son when she was a freshman.

Mark Mullen: Exactly.

They were young parents.

When I graduated high school, I was 17.

They basically put me on a plane to Ann Arbor for college.

Different world from today.

My son just graduated high school, and we're making all these plans around getting him settled.

But my dad was only 37 when I went away to college.

He didn't know any better either.

He was the first person in our family to go to college.

I was the second.

So that random introduction to Bill ended up creating a truly unique life experience.

What It Felt Like Meeting Bill — 09:58

Jeff Martin: What was going through your mind when you were meeting somebody like that?

Mark Mullen: I honestly don't remember.

Everything happened so quickly.

They weren't officially hiring anybody.

I didn't even know exactly what I was talking to him about.

Jeff Martin: He just liked you.

Mark Mullen: We just hit it off.

Can You Really Read a Founder? — 10:24

Jeff Martin: Is that similar to what founders experience sitting across from you now?

Maybe you're not Bill Daniels—but there can still be a lot of pressure in that first meeting with an investor.

Mark Mullen: There is.

I don't want to say I'm completely reliant on my people skills and my ability to understand the person across the table.

That has worked many times.

It has also failed.

If you start believing:

“I can always tell when a founder is going to be great,”

you're going to get into trouble.

Maybe I'm right six out of 10 times.

Maybe.

You have to be careful.

The Fine Line Between a “Baller Founder” and a Psychopath — 10:59

Mark Mullen: There's also a very fine line between what we sometimes call a “baller founder”—

Really smart.

Unique.

Persuasive.

Driven.

—and someone who's manipulative, scary, maybe even a psychopath.

Those people can sometimes look very similar at first.

You have to be careful because someone who's really good at convincing people can convince you too.

Seed Venture Is a Different Business — 11:42

Mark Mullen: Venture has changed a lot.

Mostly for the better.

But it's become incredibly broad.

Is General Catalyst a venture firm?

Yes.

Apparently.

But so are we.

And we're nothing like them.

We only do seed.

We come in very early.

That means we have a limited amount of information available.

At the end of the day, the decision is heavily driven by the founder.

That's just the business we're in.

There's not much else to evaluate.

So we're a little over-reliant on the founder interaction.

“You're Expecting a Term Sheet Next Week? I Haven't Met You Yet.” — 12:39

Mark Mullen: Jim and I have been doing this for a long time.

We've seen founders succeed.

We've seen founders fail.

We've seen companies move through different stages.

What we're not particularly good at is when someone says:

“Hey, we're raising a seed round, and we're expecting term sheets next week.”

And I'm thinking:

“I haven't fucking met you.”

You want to have one 40-minute Zoom?

That's not really meeting somebody.

But that's part of the environment we're operating in now.

We're trying to adapt.

Founders Should Diligence Their Investors Too — 13:19

Mark Mullen: Fortunately, most of the deals we really want to win still tend to happen after we get enough time with the founders.

And smart founders are wary of VCs too.

They should be.

They're deciding whose money they're going to take.

They should do diligence on us.

That should take more than a week too.

If you call me and say:

“Do you want to look at our deal?”

I'm also thinking:

“You don't know me either.”

“Maybe I'm a jerk.”

Maybe we should date a little before we get married.

Learning to Invest in People — 14:02

Mark Mullen: That takes me back to Daniels.

During those 18 years, I spent a lot of time investing in people.

I lived in London and Paris.

Did deals all over Europe and around the world.

They weren't software founders.

They were building cable systems.

Wireless networks.

Data centers.

Telecommunications companies.

One comfort I've developed over time is trusting my gut.

But it takes a long time to know which instincts you should trust.

You Don't Know if You're a Good VC for a Long Time — 15:00

Mark Mullen: Maybe you have great instincts at poker.

Or football.

Or mathematics.

You have to discover which instincts you're actually good at.

Then the harder part is learning to trust them.

Venture is particularly difficult because you don't know whether you're good at it for a long time.

Sometimes you get an early win.

Then you think you're brilliant.

But that can be misleading.

Investing Is a Craft — 15:12

Jeff Martin: Founders can almost get more reps than investors.

I think building companies is a craft.

People sometimes call it an art.

I don't really buy that.

Second-time founders statistically perform better.

You learn things that work.

Then you start reusing those lessons.

I would assume investing is similar.

Mark Mullen: Absolutely.

You make mistakes.

Then you see the same mistakes repeatedly.

Part of our job is helping you avoid mistakes we've already watched your peers make over 20 years.

Hiring mistakes.

Not firing quickly enough.

Options management.

Building a sales force.

Those things require repetitions.

Pattern Recognition — 16:04

Jeff Martin: Especially if you have somebody like Brett involved with a SaaS company.

He's probably seen almost everything.

Mark Mullen: Exactly.

That's been incredibly helpful.

Although now SaaS itself is changing.

SaaS Is a Delivery Mechanism — 16:21

Jeff Martin: I've always said SaaS is simply one way to deliver software.

Mark Mullen: Right.

Seat-based.

Usage-based.

Transaction-based.

Subscription.

There are multiple ways to monetize software.

AI is right in the middle of changing all of it.

We're asking:

Does the old SaaS playbook still work?

Brett helped build some of that playbook at Salesforce.

Is it still relevant in a world where you see companies with 20 employees claiming $100 million of annualized run rate?

And by the way, that's not necessarily ARR.

It's annualized run rate.

Not annual recurring revenue.

Even the metrics are changing.

Customers Will Ultimately Decide the Pricing Model — 17:21

Jeff Martin: Pricing models seem completely in flux.

Some companies are moving back toward subscriptions because it gives them more predictable economics and perhaps allows them to invest more in customers.

Mark Mullen: Exactly.

The customer is what ultimately matters.

Customers themselves are being bombarded with AI.

They think they need to use it.

In some cases they're finding real use cases.

But nobody is completely sure how to price it.

Usage-based pricing can create situations where the customer suddenly gets a giant bill.

Then the customer says:

“Wait a minute.”

“I'd rather just pay you $100,000 a month so I know what my cost is.”

And suddenly you're right back to something resembling SaaS.

There'll be back and forth between software providers and customers.

Ultimately, the customer gets a huge say in the model.

Bringing Capital-Markets Experience Into Venture — 19:03

Mark Mullen: Before I got into venture, I had a lot of capital-markets experience.

I understand markets.

How companies get valued.

How they're marketed.

How to raise capital.

How to position the company.

Jeff Martin: I would think that banking background is a major differentiator.

Mark Mullen: It is.

Although VCs don't like bankers.

Jeff Martin: Why?

Mark Mullen: I don't know.

They've never liked bankers.

They don't particularly like private-equity people either.

When I entered venture, I almost played the outsider-VC card.

Even Market Experience Has Limits — 19:59

Mark Mullen: Having that experience helps.

But markets can also change so dramatically that historical norms become less useful.

When COVID hit, the market got destroyed.

Then a few months later, markets went crazy.

Did anybody really know that would happen?

Some people claim they did.

But I certainly didn't.

Now we have inflation.

Huge national debt.

High interest rates.

And markets still going up.

Plus geopolitical unrest and wars.

So it's difficult to say:

“I know exactly where the market is going.”

If I knew that, I'd just put all my money there.

But when companies are negotiating with private-equity buyers or planning a financing, we do have a lot of relevant experience.

Putting His Own Money Into the Fund — 21:04

Jeff Martin: If I remember correctly, in your first funds, you personally invested heavily.

Mark Mullen: Yes.

In Double M I and Double M II, I was the largest LP and the largest cash investor.

That was natural to me.

When I started Fund One, I went to former partners.

Former clients.

Friends.

Family.

And I said:

“By the way, I'm putting in more than anyone else.”

Put your money where your mouth is.

As funds get larger, that's harder to maintain.

Jim, Brett, and I still invest significant personal capital into Bonfire.

But in those early Double M funds I could be 15% or 20% of the capital.

Why GP Commitment Matters — 21:53

Jeff Martin: How does that change how you invest?

Mark Mullen: Coming from banking and private equity, it mattered.

When I told a founder:

“I'm investing $500,000,”

I'd make sure they knew that perhaps $100,000 of it was mine.

That matters.

My little shtick was:

DFIU.

“Don't fuck it up.”

Jeff Martin: Which is basically what Bill told you.

Mark Mullen: Exactly.

And Bill put his own money where his mouth was too.

I can't prove how much it mattered to every founder.

But I believe it mattered.

The Other Side of Investing Your Own Money — 23:09

Mark Mullen: The other thing is that when companies succeeded, I made substantially more money than somebody who only owned a small piece of carry.

People often don't understand the economics of venture careers.

I'm personally invested in about 25 funds.

I haven't made a new fund investment in several years because I'm already diversified enough.

I have investments in funds people have heard of, like Union Square Ventures.

I'll probably keep investing there as long as Fred wants to keep doing it.

But I also get calls from people starting new funds.

They want advice.

They want to understand the economics.

Sometimes they want me to invest.

Two Ways Into Venture Capital — 23:45

Mark Mullen: There are basically two ways into venture.

You get a job at a venture firm.

Or you start your own firm.

Both are really hard.

The middle ground is something like a principal at a larger fund.

Maybe you get a tiny amount of carry.

Maybe none.

You get a nice salary.

Let's say you're 34.

You've got a good education.

You've had another career.

Now you enter venture.

For the next 10 years, you're probably going to make dramatically less money than you could have made staying on your previous career path.

Venture Is a Get-Rich-Slowly Business — 24:24

Mark Mullen: You're reliant on the firm doing well.

Even if it does well, maybe your carry percentage is so small that it doesn't change your life.

And it takes seven to 15 years to know.

Jeff Martin: Get-rich-slowly strategy.

Mark Mullen: Exactly.

One way to change that is to invest your own capital.

But it's hard to do that meaningfully at a giant fund.

The Economics of a $12 Million First Fund — 25:02

Mark Mullen: On the other side, I talked with someone yesterday who wants to start a $12 million first fund.

I said:

“Let's do the math.”

Twelve million.

Two-percent management fee.

Now subtract legal expenses.

Fund administration.

Annual audit.

LP reporting.

Outsourced services.

You're probably paying yourself something like $125,000 to $150,000 a year pre-tax.

That's it.

For several years.

And what are you investing in?

Probably pre-seed because you only have $12 million.

Pre-seed outcomes can take 10 to 20 years.

Maybe you get an early winner that triples your investment.

But that money first goes back into the fund economics.

It's not instantly life-changing carry.

When you really unpack the economics of starting a fund, it's daunting.

Capital Is No Longer the Differentiator — 26:21

Jeff Martin: There's also so much more competition now.

Mark Mullen: Unbelievable.

Capital itself isn't the differentiator anymore.

There was a time where you could say:

“We have capital for this round.”

“And follow-on capital.”

“We can support you throughout the company's life.”

That meant something.

Although some smart founders don't actually want one investor with that much control.

Now you have massive crossover funds playing at almost every stage.

Andreessen Horowitz can do whatever it wants.

Any stage.

Any technology.

Almost any geography.

Good for them.

It's working.

But if you're trying to be a niche investor, it's getting harder.

Specific technology.

Specific geography.

Specific stage.

What Venture Doesn't Talk About: Most VCs Don't Make That Much Money — 27:25

Jeff Martin: What do you think isn't talked about enough in venture?

Mark Mullen: How little money most people actually make.

People assume everyone in venture is rich.

The industry is also incredibly myopic.

We think we're bigger and more important than we are.

I have friends in New York running $50 billion hedge funds.

They've barely heard of anybody in venture except maybe Marc Andreessen or Fred Wilson.

They'll say:

“Mark, you raised a $250 million fund?”

“What does that actually pay?”

“And you don't really have to mark the thing to reality for years?”

They think it's crazy.

Venture Thinks It's Bigger Than It Is — 28:33

Mark Mullen: We have an overstated opinion of ourselves.

Some of that has changed as people from venture have become more involved in politics and government.

But historically, venture was still this relatively small thing centered around places like San Francisco.

At the same time, the industry constantly highlights the enormous winners.

You read about Wiz.

Scale.

Massive outcomes.

Those are real.

They're incredible.

And everybody wants one.

That's what keeps people chasing the business.

But the coverage hides all the other companies that didn't get there.

You don't see the thousands of investments that didn't become those companies.

The Opaqueness of Venture Performance — 29:58

Mark Mullen: One of the things that drives me nuts about venture is the opacity.

There's a lack of clarity in valuations.

A lack of consistency in how investments are marked.

Typically, we mark companies based on the last financing.

If nobody invests again for a long time, unless the fund manager is especially disciplined about marking down the value, they may leave it at the previous value for quite a while.

Sometimes until something forces the issue.

So a lot of people hide behind what we call TVPI.

TVPI vs. DPI — 31:07

Jeff Martin: Explain TVPI for people who don't know.

Mark Mullen: TVPI is essentially the total value of the fund relative to invested capital.

If you raise a $10 million fund and value the current portfolio at $20 million, your TVPI is 2x.

Twenty over 10.

But that does not mean you've actually returned any money.

DPI is distributions relative to invested capital.

That's cash that's actually gone back to investors.

And there's a lot of bullshit around this.

I run funds, so I understand how the math works.

I'm also an investor in 25 other funds.

I see what different people do.

I can even have the same company marked at one value in one fund and another value somewhere else.

It Takes Forever to Know if a VC Is Any Good — 32:20

Mark Mullen: And everyone can hide behind the fact that it takes so long to find out.

It takes years to know whether an investor is good.

Years to know what a company is actually worth.

So things can remain fuzzy for a long time.

That drives me crazy.

Track Record vs. Marketing — 32:39

Mark Mullen: I remember speaking with a prominent VC when I was getting ready to raise my second fund.

He said:

“You could raise a lot more money.”

“You've got a great background.”

I had a strong track record in banking.

And a good track record as an angel investor before starting the fund.

He asked:

“What's your plan?”

I said:

“I'm going to let the track record speak.”

“If the returns are good, I shouldn't have to worry too much about fundraising.”

He told me:

“That's the wrong way to think about it.”

“You have to go market yourself.”

And this is a guy I've known forever who frankly had a mediocre investment track record but was fantastic at raising money.

Marketing was the objective.

That was never my style.

“He's a Money Maker” — 33:25

Mark Mullen: Jim and I have always led with track record.

We're not particularly good marketers.

We're not constantly on Twitter.

We don't talk endlessly about ourselves.

Had I started on day one saying:

“I want to raise as much money as possible,”

I probably could've designed a career around that.

But that wasn't what I was trying to do.

Jeff's Route Into Entrepreneurship — 33:58

Jeff Martin: My background was entrepreneurship and finance in college.

I started a business in college and sold it.

At that point I was trying to decide whether I wanted to become an investor or go down the entrepreneurial route.

Looking back, it's funny.

I thought:

“I don't think I'll ever really figure out investing.”

“Maybe someday at the very end of my career I'll feel like I understand it.”

So I chose entrepreneurship.

That's what we called ourselves back then.

Entrepreneurs.

Now everybody's a founder.

The place where my work starts is usually after someone has invested.

There's all this capital flowing into companies.

My job begins once the money is inside the business.

How do we help the team allocate that capital to the places that create the most impact?

A Great Founder Doesn't Automatically Know How to Build a Company — 35:00

Jeff Martin: It's amazing how many founders don't know how to actually build the company.

They can be technical geniuses.

Amazing coders.

Have a great product idea.

That doesn't mean they know how to build an organization.

Mark Mullen: First-time founders have a lot to learn.

First-Time vs. Repeat Founders — 35:22

Jeff Martin: Probably half of the founders I work with are first-time founders and half repeat founders.

You have a couple in your portfolio I've worked with.

Halston is a first-time founder.

Brilliant.

Then John at Credit Key is a repeat founder.

What's interesting is that both value:

Getting the team aligned.

Getting the team focused.

Building flexibility into the operating cadence.

But repeat founders usually understand the value of those things earlier.

First-time founders sometimes have to struggle before they realize:

“We're wasting capital because we're not focused.”

“I don't know whether we're working on the right things.”

“I don't know until it's too late.”

And first-time founders naturally tend to believe they have to do everything themselves.

Mark Mullen: One hundred percent.

Repeat founders realize earlier how useful it is to have help.

Over-Hiring a COO Can Be the Right Move — 36:57

Mark Mullen: Take Walter Driver at Scopely.

I invested in him around 2011.

At the time, they had maybe $400,000 in revenue.

A few years later, he aggressively recruited a COO from Disney Games.

It was an over-hire.

The most expensive person he'd ever hired.

And that person helped him build the company enormously.

The founder sets the tone.

Sets the agenda.

Leads the vision.

Has to hire people.

Has to understand product.

But executing every piece of the company is not necessarily what the founder should be doing personally.

The Founder Shouldn't Be Building the Board Deck Forever — 37:33

Mark Mullen: Take Halston as an example.

During the first year, I'd get the board deck and he'd built the whole thing himself.

He'd assembled all the numbers.

Then I'd beat him up over everything.

“What is this pipeline report?”

And he'd say:

“Well, that's what I got out of the spreadsheet.”

I'd say:

“This is crap.”

“And you shouldn't be the person doing this.”

There should be a system.

The sales leader should own the data.

They should give you the information.

Over time, we've helped him build that operating structure.

He's got the company going in the right direction.

And he's benefited enormously from having people around him help.

Every Executive Should Be an Executor — 38:06

Jeff Martin: My view is that every executive on the leadership team should own a functional area.

And every one of them should be an executor.

Your head of sales should execute.

Head of product should execute.

Head of marketing should execute.

The CEO's job is to align those people, get them working together, and keep everyone moving in the right direction.

Then over time you add infrastructure around the CEO too.

Maybe an admin.

Then a chief of staff.

Eventually an operations person.

Then VP Operations.

Maybe later a COO.

Those roles progressively absorb the work the founder or CEO shouldn't personally be doing.

At the End of the Day, the Founder Has to Figure It Out — 39:28

Mark Mullen: We can talk endlessly about strategy.

Processes.

Pipeline tools.

Hiring.

All of it matters.

But none of it matters anywhere near as much as the founder.

I don't care what anybody says.

The founder has to figure it out.

If that person can't figure it out, we're not going to figure it out for them.

We can give ideas.

Blocking and tackling.

Be a shoulder to cry on.

Encourage them.

Make them mad.

Agitate the chip on their shoulder.

I'm actually pretty good at that because I've seen so many situations that I don't get particularly emotional about most company problems.

I can help.

But I cannot make the company successful.

That comes from the founder's drive, focus, and potential.

Starting a Company Doesn't Mean You're a Great Founder — 40:23

Jeff Martin: And just because you start a company doesn't mean you're automatically good at being a founder.

I think being a founder and CEO is a craft.

People like to call scaling an “art.”

I think that's bogus.

A good friend of mine is one of the top tattoo artists.

We were talking about art once and he said:

“It's not art.”

“I've spent 10,000 hours drawing hands.”

That's craft.

Founders and CEOs can learn the craft too.

That's what I like helping them do.

The Best Teams Find Clarity in Chaos — 41:04

Jeff Martin: Different people on the leadership team are also at different skill levels.

Maybe your product leader has done it multiple times.

Marketing hasn't.

Someone else is new to the role.

So part of the work is lifting everybody.

That's why I believe in the right system at the right time.

You need flexibility.

You can't over-process too early.

But you need some process.

In my experience, the best teams are usually the most organized.

They may feel chaotic from the outside.

But inside the chaos, they consistently create clarity.

That's what allows them to win.

Mark Mullen: I agree.

But the founder still has to be willing to embrace those processes.

Small Signals Matter — 41:58

Mark Mullen: We notice tiny things when we're evaluating founders.

Suppose somebody emails me about raising money at 3 p.m.

I respond:

“Here are a few times. Let me know what works.”

Then it takes them three days to reply.

They finally say:

“Sorry for the delay. Let's do that time.”

And I'm thinking:

“Well, that time's gone now. I already booked it.”

Little things matter.

If you can't manage yourself in a timely way, how are you going to manage a company?

Everyone's hair is on fire.

I get it.

But there are basic disciplines you still need.

You Don't Have to Be Good at Everything — 42:29

Mark Mullen: In fairness, if you're an incredible technical founder who's built amazing technology, I don't expect you to also be great at everything else.

But there need to be other pieces in the puzzle.

And the founder has to recognize:

“I need those pieces.”

No matter how often investors tell themselves:

“This is an amazing founder.”

“Big market.”

“Great idea.”

“We can coach the rest.”

If the founder doesn't have it, they don't have it.

Great Founder, Small Market — 43:29

Mark Mullen: The opposite mistake is refusing to back an excellent founder because the market appears too small.

There's this mentality in venture now:

Every investment has to be able to return the fund.

That's mathematically impossible.

Let's say I know a founder is excellent.

Interesting market.

We put in $5 million.

And I think we could make $30 million in five years.

That's a good investment.

But if you're managing a $250 million fund, people say:

“That's not enough.”

“I can't do something that only makes me $30 million.”

That's crazy.

Thinking Like a Money Maker — 44:24

Mark Mullen: When I started Double M I and II, I came from banking.

My first question was:

“How are we going to make money?”

One of the best compliments anyone has ever given me was when Fred Wilson introduced me to an investor and said:

“Mark's a money maker.”

I loved that.

A money maker takes one dollar and turns it into more dollars.

That can happen in different ways.

If you're lucky, you also get the enormous power-law winner.

The investment that returns the entire fund.

Those exist.

But we've almost manufactured this belief that every investment needs to have that potential.

Why “Return the Fund” Thinking Distorts Venture — 45:00

Mark Mullen: Andreessen Horowitz has multi-billion-dollar funds.

There is no way every investment they make is expected to individually net them billions.

So why does everyone else pretend that's the standard?

You end up passing on very good founders because you don't think their market is large enough.

That founder might sell the company for 3x or 5x in four years.

Learn an enormous amount.

Then start the next company.

And you're locked out because you didn't back them the first time.

Founders Need Safe Places to Admit What They Don't Know — 45:49

Jeff Martin: That's one thing that gets me going every day.

I believe these founders can be more successful.

There's a lot of low-hanging fruit.

Things founders simply haven't learned yet.

But they're also under incredible pressure.

They sometimes feel like they can't be transparent about what they don't know.

The best founders I've seen are constant learners.

They're curious.

Open-minded.

Willing to say:

“I don't know.”

The people who hide it and fake it until they make it don't get the help they actually need.

The Desert-Island Album — 46:13

Jeff Martin: I've hit you with a lot of questions.

I have one last one.

Potentially the hardest question you've ever been asked.

Ready?

Mark Mullen: Okay.

Jeff Martin: You're stranded on a desert island for the rest of your life.

You have everything you need.

Food.

Water.

Healthcare.

Everything.

The one thing you don't have is entertainment.

But luckily, an old '80s boombox washes ashore.

Unlimited batteries.

You can choose only one album to listen to for the rest of your life.

What are you choosing?

Mark Mullen: Wow.

You told me this would be hard.

But I'm close.

I'm going:

U2 — The Joshua Tree.

Jeff Martin: That's a great album.

No one has ever said that.

I'm surprised.

That's a great album.

Mark Mullen: Yeah.

I could live with that.

Jeff Martin: Not that I'm on the island with you.

But if I had to be, I could handle that one.

Awesome.

Thanks for being on the show.

Mark Mullen: Great.

Appreciate it.

That was fun.