Joe Benarroch:

So happy to have you here.

Carter Reum:

Congrats. I saw it, right? You just did a million. You just passed a million downloads, right?

Joe Benarroch:

Isn't that crazy?

Carter Reum:

Congrats. That is-

Joe Benarroch:

This is fun.

Carter Reum:

It's pretty crazy.

Joe Benarroch:

But this is something that we're doing new where we're actually having breakfast over the belt to kind of give a little bit of a signal to the opening market. But you are an incredible person to be sitting in that chair because of how many things you have seen in the market over the years. But I want to start with your origin story because I think I want to understand the moment that you said, "M13 should exist?" Or something sparked in you that said, "No, this is more than just a belief that I'm having in myself, or you and Courtney." Walk us back to that part.

Carter Reum:

Yeah, I mean, if we go all the way back, my brother and I both came here to New York City, played soccer at Columbia, then we both ended up as investment bankers at Goldman Sachs, which is not typically the path you get to to where we are today. And then when we left there, we started a company and like so many successful entrepreneurs as we are building our company, which we would later successfully sell in 2017, we were meeting other great entrepreneurs and investing. And I used to say, "Being an investor makes me a better operator and being an operator makes me a better investor." Because I was able to see so much stuff. And then when we sold our company in 2017, we just looked around and said, "Look, the whole world's being disrupted and evolved. What does a venture firm need to look like for the decades to come, which is different than the decades prior?"

And we've been lucky enough, we've been the first investor in about 15 unicorns. So we've been around a lot of great companies from the early days. And so take someone like Jamie Siminoff and Ring. At the time we seeded Ring, it was the only wireless doorbell maybe in the world today. There's hundreds if not thousands of competitors. But we saw in 2017 that it had never gotten easier to start a company. Therefore, the competition was never more fierce and it wasn't enough just to know where the world was going. You had to build a venture firm around this concept of yes, you were going to back tremendous founders with big visions, but you were also going to build the infrastructure to give them the greatest chance of success.

And that's why at M13, we have 10 people that are investors that wake up every single day and try to find great founders to back. But we have 20 plus people that wake up every day and help those founders once they're in our ecosystem because we'll talk about it, I'm sure, but it's hard, right? You sit here place like the New York Stock Exchange. This is the culmination, but it's kind of like a basketball player that's hits the winning free throw. Nobody sees all the shots he missed at 5:00 a.m. and 6:00 a.m. or the days after a bad game, he shot more free throws. And so it's easy to think it's easy because you watch people ring the bell every day.

Joe Benarroch:

I think you're totally right. What do you think is that one misconception about that journey, about the journey of a founder that people just don't really get, that you see all the time or you hear all the time?

Carter Reum:

Yeah, I always say up into the right is more, everyone thinks it's a smooth line. And when my brother and I wrote a book a few years ago called Shortcut Your Startup, we actually talk about how you or I, statistically speaking, have a better shot to be an NBA basketball player than a unicorn founder in tech. And the lesson is not that you and I should have been NBA basketball players. The lesson is maybe more Holy cow, is it hard? Yeah, but it's just so hard. So people always say when they meet a 22-year-old, "He could be the next Zuckerberg." That's like telling somebody who's playing high school basketball today, they could be the next Kobe Bryant. Statistically speaking, think they're probably not. And so I always say, "Up into the right looks like an EKG." What really happens is it's up, it's down, it's up it's down, it's up, it's down. You just hope that you're just keep moving a little to the up and to the right. And one of the things we talk about all the time with founders is just get 1% better every day.

And if you do that by the end of the year, you're 37 times better. You do that over 5 or 10 years type of thing. So I just think people, we glamorize the success, people ringing the bells, but I hope more founders come out and talk about all the bad days because yes, there are great days like when they come here, but there are just so many tough days along the thing. And so one of the things I tell founders when we first invest is, "Come to me on the worst days." and you can come to me on the good days, but there's a lot of people you can come to on the good days. I want to be the guy you call when something's going wrong because inevitably that's going to happen because it's hard.

Joe Benarroch:

That's the one thing that I've been so pleasantly surprised and very intrigued by. We have a capital markets team run by Michael Harris, and what's been really fascinating is the length of time that they're working with these companies. And from what I've gathered, it's not just the one or two years before they're even thinking about going public. It's sometimes that 7, 8, 9 year journey. And so to your point, it does have these ups and downs and they're following them through that entire trajectory.

Carter Reum:

It's so funny because I always talk about the old decade in the making overnight success, but you think about it, my brother was on the deal team. He took, it was a 30-year-old founder. He was about to IPO a billion-dollar company. That kid was a kid named Kevin Plank. The company was Under Armour, and they were famous at the time. They were the fastest consumer company to ever get to 100 million in revenue. It only took them 10 years.

Now I joke, it seems like every 30 year old's about to IPO a billion-dollar company. That wasn't the case 15 or 16 years ago, but that's why I talk about 1% better over 5 or 10 years because it really does compound, right? You can look at so many industries and you go, "Wow, why was that company so successful?" And other kind of people who had the same idea worked, it's just a little better every day. But these are long, long journeys. And even when a company's getting ready to ring the bell, they're thinking about it for three, four or five years. But what's fun is I think Klarna, which maybe they were founded in 2004, and so a lot of these companies blows your mind. They all have been around for a long time because it takes a long time.

Joe Benarroch:

Yeah, had you've been here tomorrow, you're seeing so much excitement and energy. And we had the Hinge Health CEO was just here the other day. He was doing a big investor day. And speaking of founders, you meet so many, what are some of the signals or patterns you get from a founder that walks in the door, they sit down with you and you know that what they're developing is not just going to be commercially successful. There's going to have some cultural relevance. I mean, you're meeting people I would imagine daily.

Carter Reum:

Yeah, I think people, the venture capitalists always talking about backing great founders. And I always think that's kind of a cop out and it's kind of generic. What does great mean and why? So the first thing is when we assess a founder, we always use this baseball analogy from Moneyball. If you're a Billy Beane fan or Brad Pitt fan, whatever it may be, of wins above replacement. LeBron James accounts for the most wins above his replacement. And so some founders are great at one idea and at other ideas, they might be awful because what they need to do.

And so I think the two things I look for in today's climate are as follows. One is, can a founder inspire? And what I mean by that is can they inspire to get a media interview that maybe they shouldn't have gone early in the early days? Can they inspire to get that key executive or team member to come join them when they probably shouldn't? Can they inspire guys like me to give them money and capital, which give them an unfair advantage? So that ability to inspire, because it is hard as you're building and you have to create unfair advantages along the way. And then the other thing I look for in founders is the ability to, look, I always say, "In a microscope in one eye and a telescope in the other eye."

And what I mean by that is the microscope in one eye is looking at the day-to-day executing. But in today's world that is so fast moving and competitions not just coming from who you think your competition is, but everyone's competing for the wallet, the attention, the phone, whatever it is, it's coming from everywhere. You have to be looking out at a telescope and you have to be able to look around corners and see where you think the world's going because it's moving fast, right? And so to me, those are the two things I look for founders, but it changes. And again, I think some founders are great for one idea and they might not be for another idea.

Joe Benarroch:

Microscope in the eye, telescope in the hand.

Carter Reum:

Yeah.

Joe Benarroch:

I'm going to share that with my team. So I like to ask this question specifically over breakfast. Is there something that you are toasting now, some sort of trait, some sort of practice, some sort of behavior or something that's just completely toast, something that just should be wiped out of the VC process, it should just get, let's just kick that out of there...

Carter Reum:

All right.

Joe Benarroch:

... that you're toasting.

Carter Reum:

Well, I think for me, what is toast is as a VC, if you just invest in AI, it's a good idea. It is still very, very hard. Clearly AI will completely and fundamentally change the world. But I think you find too many venture capitalists that are momentum driven or driven by FOMO and they just think, "Oh, I'm just investing in anything that looks kind of shiny to our object." I think what I'm toasting is right now we're still talking about the technology, which is AI and it's incredible technology. The fact that you can make an app over breakfast using Lovable or WeThinkCode or we can look something up on OpenAI.

What I am toasting and what I obsess about with the team is how do we get the implications of that technology? All the way back to the 1920s, the technology was the automobile. The implications of that technology was the fact that I live in a city like Los Angeles that was only possible because of the car or that we have gas stations. All these great companies like Klarna that you are having ring the bell today, tomorrow, last week, next week, they're all possible because of the phone. Because all of a sudden we had a supercomputer in our pocket that led to the rise of D2C, that led to the rise of Klarna, et cetera, et cetera.

So today's version, so we went from iPhone to cloud computing, today it's AI and it is fundamentally groundbreaking technology. The adoption curves have never been steeper. But what is it that we're not thinking about that's not even possible yet? And what are those second and what are those third ripples? And so I toast that because if you get that right, the IPOs we're talking about when you and I have breakfast five years from now are not going to be worth tens of billions of dollars. They're going to be worth hundreds of billions of dollars. But you have to get the implications of the technology right.

Joe Benarroch:

Because you used to talk a lot about investing not in products, but investing in missions, do you think now you're investing in the implications, like the implications? Or are those two things intrinsically tied?

Carter Reum:

Yeah, I think it's a little bit of everything. I think in today's age of AI, the disruption is so large, which is very different. We invested a lot of great consumer and direct to consumer companies because there was a moment in time where that made sense as an investor. Today we're investing behind mostly infrastructure layers and B2B2C and other things like that. I think when I think about it today, it's when I think about mission, it's who are those founders that you can back that are seeing something that's not possible? And how are they thinking, not just can I sell something online or can I do this? But when you look at a lot of these great companies, they believed in something that everyone laughed at, but they were right.

Joe Benarroch:

That's true.

Carter Reum:

And I think that's the exciting thing. That's the telescope. Those founders who believe in Santa Claus and the Easter Bunny, they have to have that belief system that people go, "Man, that's crazy." Unless maybe it's not crazy, but then you got to go be realistic and kind of go execute.

Joe Benarroch:

Yeah, because I'm curious, there's a lot of talk about wellness. There's a lot of talk about biotech seems to be this in-vogue, I would say category. Where's the telescope in your mind on some of the big bets, and obviously not giving away your total playbook, but I'm just curious where your vision is?

Carter Reum:

Yeah, I mean, I think we invest in the future of money, work, health and commerce. And I think they will all fundamentally be disrupted by technology. Take healthcare, I always laugh. You go to a doctor and the doctor says, "Oh, you're not feeling well. What's changed?" Clearly, I believe at some point in the future, whether it's one year or two years or five years, the doctor will call you and say, "Hey, Joe. You're about to have a nervous breakdown. I'm looking at your wearable things and this is not going well. Or I see this is happening, you really need to for the next month, take some time off because..." This type of thing. Or if you think about a company like Allocate, bringing it back to the financial markets, a company that just raised a $30 million Series B in our portfolio.

They are disrupting family offices, RIAs with this idea that they can use LLMs and AI to the hyper personalization of investing in the private markets. The private markets have been very inefficient with a lot of friction for a long time, and that can totally be changed. You think about longevity companies like LifeForce, right? Using HRT and kind of an operating system to get you healthier. But you can just go sector by sector, thing by thing. I think what is exciting about investing in this moment in time is I don't believe there will be a single thing we're doing today that five years from now we're doing in the same way. Everything is going to evolve in an unprecedented way. And just because AI is fundamentally that altering.

Joe Benarroch:

Yeah, that is true. I mean, they say that everything that we've learned I think in the last year has probably been decades worth of innovation, which has been fascinating. I always love when they...

Carter Reum:

This is when they're getting fired up there. This is like their pregame.

Joe Benarroch:

Yeah, you're like 20 minutes before the bell. It's good.

Carter Reum:

Yeah, I like that.

Joe Benarroch:

It's excited. I want to ask you some personal questions or some personal questions about your leadership because you've been on both sides of the conversation, we talked about that. You've seen a lot and working with your team, the people that you're bringing into M13, are there fundamental things that you've said they've taught you that you maybe flipped your mindset on as just an executive in the marketplace, somebody who's now transitioned from the Goldman Sachs world and you were a founder, you're sitting on the other side of the table? What are some just natural leadership things that are changing in?

Carter Reum:

I think when it comes to leadership and how we built M13, now that we have 40 plus people between San Francisco, New York and La, I think about three-

Joe Benarroch:

Congrats.

Carter Reum:

... thank you, guiding principles. One is as people, and I talk about this with founders all the time, when you're building a company, you get the best athletes for the best system. So take somebody like Phil Jackson, he runs a very specific offense traditionally with the Lakers and the Bulls, obviously a big Bulls fan, being from Chicago. And he would say, "I got Derek Fisher to be my point guard because he's the best point guard for my system." And so when I talk to founders about building great teams, it's not just about getting talented people, it's the right talented people for the best system. So I think it all starts with that. Then I talk about in the best companies, whether it's M13 and when we're debating stuff or for portfolio companies, it's how do you create healthy tension? How do you have different biases, different point of views, different ways that people come at it? And one thing that I pride myself on as a leader is I always talk about how I have strongly held beliefs loosely.

Joe Benarroch:

Strongly held beliefs loosely.

Carter Reum:

And what I mean by that is I always have working point of views. I always have theses, but the loosely is I'm always receptive to adapting that point of view. I treat my brain like a poor man's kind of algorithm, and I'm always taking in data points. And the team will say, "Well, you said this a month ago." And I said, "Yeah, it's changed. It's evolved." Because the world is evolving. And as a leader, you don't want to be unpredictable. That's the thing nobody likes. So you have to be thoughtful. But I think the best companies, the best teams are tremendous smart people coming together with different point of views, different biases, different prejudices. I use all those things in the positive way.

Joe Benarroch:

Yeah, of course.

Carter Reum:

And then people debating stuff and going, "Gosh, I didn't think about it. Joe is pulling on his experience at NBC and at X, and he thinks that. Interesting. I wouldn't have thought of it like that." But he makes a really good point. And again, because there are some founders that have been successful in the past that I would say are kind of one-dimensional, stubborn, and they just ran through walls. I don't like that in a founder today because the course is constantly changing, right?

Joe Benarroch:

Yeah, I agree.

Carter Reum:

You have to be reading the winds and the directions and things like that.

Joe Benarroch:

I agree. Yeah. The changing your perspectives. Sheryl Sandberg, when I was at Facebook, she would always start a meeting and say, "Who's had a hard conversation this week?" And if you didn't raise your hand, it was always the, "That's impossible that you haven't been able to have a healthy debate with somebody to talk about something and potentially to change your perspective." And I've carried that on. So when you say, "I have strong held beliefs loosely" or am I phrasing the question...

Carter Reum:

Yeah, exactly.

Joe Benarroch:

And I actually I mean, I even say it's my husband. It's like you should be able to sit in a situation with somebody and say, "I didn't think of it that way. My perspective changed."

Carter Reum:

And you have to create an environment as a leader where you encourage, just in today's day and age, I celebrate people in our all hands every week and say, who used ai? And we celebrate that because I think 12 months ago, people, it felt like there were some junior employees who felt like, oh, I have to sneak to the bathroom and use the AI, for lack of a better term, because they were like, whoa, I don't want them knowing I'm using the ai. But that's creating a great culture. In today's day and age, if you are not using AI, you are falling behind, right? And so we celebrate people. "Oh my gosh, you saved yourself five hours by using that AI." And things like that. In the same way like you were talking about with Cheryl and your husband, you have to create a culture that allows for that healthy descent, and then you have to go, "Yep, totally. I had a point of view. It's adapted, and now I have a different point of view and celebrate that as well."

Joe Benarroch:

Absolutely. Yeah. In fact, we have copilot Embedded into our email, and I have, every time I send an email or I send some sort of communication, I actually make a point to tell my team, I've actually used copilot for this. I've actually fashioned it, lever leveraging it. And it's funny because when I was at NBC Universal There, and that was what now seven years ago, there was all the debate about should the editors or the editorial team be leveraging these tools? And the answer is yes. It just gives you a different way in and what you think, what kind of is some cool practices that Carter uses a tool for.

Carter Reum:

There's so many. It is one of the things when think about AI in the workplaces, I think you have to be not precious about it, and you just have to test and iterate. You have to be a tinker, right? So we have a channel at M13 in our Slack that's called AI Hacks, and it's called AI Hacks for a reason because we want it to be an open sharing thing of like, "Oh, I couldn't figure out how to reconcile the monthly financials with the investor report, but I was able to do that." Or somebody yesterday said they were using agentic AI to go do this and then drop it into lovable and do y. I use the mantra, I always tell people, when you went to bed last night, did you have anyone doing work for you while you slept? You didn't, Joe?

Joe Benarroch:

That's crazy.

Carter Reum:

You didn't. That is crazy to me. I would never leave my desk without launching some type of agentic AI. And I do that in that way for dramatic effect, but I do it the same way at M13 to go, "In today's day and age, you left your desk and you didn't tell anyone else to do work for you in an agentic AI kind of way?"

Joe Benarroch:

No, I actually, no.

Carter Reum:

Tonight before bed, you're going to be like, "What do I have agentic?"

Joe Benarroch:

I pride myself as having a lot of work stamina. Now I'm thinking to myself, "No, I can't leave my desk unless I set up something." You're actually right.

Carter Reum:

So every night when I leave the desk, I go, "What can I have some agentic AI do? Can it research this or that?"

Joe Benarroch:

That's totally right.

Carter Reum:

But yeah, it'll be interesting. It's just going to be such a shift in terms of what all of us, where the emphasis on our skill set is, right? This has happened before. They were worried with the car that all the people that were riding the horse and carriages we're going to be out of a job and fast-forward. But this is fundamentally going to change how we all interact between humans and technology. There'll be a role for both, but the ratio is changing and what makes you special at your job, because yeah, writing a long email, yeah, AI can do that?

Joe Benarroch:

Totally. Do you think, if we're looking a little bit into the future, or I would say thinking about all the new founders that you're talking to, do you think that there's a way in which M13 is going to leave a mark on entrepreneurship on all of those people that are coming up with these ideas? Do you think M13 is, you're a top 100 VC, which congratulations, by the way...

Carter Reum:

Thank you. Yeah.

Joe Benarroch:

What's your mark?

Carter Reum:

Yeah, I think when I, so we've been first investor, as I mentioned, in 15 unicorns. So through the first cycle it's been fun to go like Ring. I remember when we wrote the first check when Jamie was in his garage in the Pacific Palisades, and now they're synonymous all over the world. So the journey is so fun. It's what makes it so fun to be doing this and talking about this at the New York Stock Exchange. I think for us, it's hopefully when we look back as we built a firm and a model that empowered so many great founders to have an unfair advantage to win, or we were that little, we were the sixth man, if we're going to go with the basketball analogies, and I think the journey is hard, right?

It is hard to build these companies. It may look easy, just like it may look easy to hit that free throw at Madison Square Garden, but it was really hard. And I think it's not about the companies we built or the technologies that we backed. Hopefully it's the way that we did it. We did it by being good human beings. We did it with a model that we leaned in and filled in the gaps for those founders and give them that extra chance to succeed, things like that. But at the end of the day, we're just founders, right? We're building a model in venture capital, just like founders are building a model in whatever they're doing.

Joe Benarroch:

Yeah. Is there something in the last year that you're raising a glass to that you're saying, "That was a great person? That's a really great moment in time. That's a great idea." Is there something that you're holding up in the last year that you've seen that Carter is just tipping his hat to, raising his glass to?

Carter Reum:

Yeah. Oh, so many. How much time do we have to the bell, but...

Joe Benarroch:

Nine minutes.

Carter Reum:

Yeah. Typically, I just say my wife and my two cute little kiddos, because at the end of the day, that's what I'm thankful for every day when I get to come home and I get to give all of them a kiss. Thank goodness both babies look like their mama, so it's a blessing. Cute as I'll get them. But yeah, I think what really is fun about being a venture capitalist is when you're backing great ideas that are making the world a better place.

So take somebody like Prepared in our portfolio. It was a founder, Mike Chime that dropped out of Yale. We wrote him the first check at a $5 million valuation to kind of get him going. He was at a school during one of the active school shootings and built technology to basically evolve 911 call centers. Basically tried to stop the next kind of school shooting, and now it's five, six years later, his company is scaled. It's powering so many 911 call centers in the U.S. When you see that you can truly make the world a better place by backing these great founders that in his case had an experience that led him to believe he wanted to make it his mission to make the world a better place, and in this case, using technology to hopefully stop that next shooting, it's pretty awesome.

Joe Benarroch:

You're a great person. You bring that into your company. Everybody that you meet, congratulations. I'm really excited for you. I'm excited for everything. I'm excited for your family. You have a wonderful family.

Carter Reum:

I always tell people that the ultimate luxury in life I talk about all the time is getting to do what you want with who you want, right? I got to choose to have breakfast with you this morning, and I was so damn excited about that, right?

Joe Benarroch:

I was too.

Carter Reum:

But when you get to do that, every once in a while, investors will say, "Well, what do you do for fun?" I go, "Are you kidding me? I have the best job ever. I have so much fun. I don't need hobbies because this is fun." And it's fun because we get to be around so many smart people, doing so many incredible things. And some of them will fail, some of them will succeed, but hopefully, but there's still fun journeys to be on because you're trying to make the world a better place and thinking about business models and companies and ideas that weren't possible before.

Joe Benarroch:

Well, we're all lucky to have you. I just want to cheers you with moments from the bell. Congrats to you. Congrats to the family.

Speaker 3:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X at ICE House podcast. From the New York Stock Exchange, we'll talk to you again next week inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.