Joshua Browder raises $30M Fund 4 to back undiscovered, uncredentialed founders at pre-seed

very into Olympic weightlifting. Fantastic. Well, we have Josh Browder in the studio. He He's a CEO. We'll ask him. Does he deadlift? We got to know because he's going the portfolio out. Welcome to the stream, Josh. Great to have you on too long. How you having me? Um, love the show and I I love Wonder as well.

I see that Wonder. Oh, yes. You're you're you're one of the first investors, right? We did an audit. I'm proud to be the first investor. The first investor. You found your happy place. Found your happy place. First spot on the cap table. That's fantastic.

Uh so yeah, give us a little bit of an introduction and uh do you call yourself a CEO or a venture capitalist at this point? You you you're on fund four so moving more into the VC world. What what's the story? So definitely a founder at heart.

I'm the founder of do not pay which helps consumers fight companies and governments. The very first use case was parking tickets. Uh but today I'm announcing um my fund that I do on the side called Brower Capital Fund 4. Um, I'm very lucky.

We've raised $30 million from a lot of the best investors and I specialize in backing um undiscovered uncredentialed founders. So, we're living in a world now where there's like these crazy seed valuations are like 50. Um, everyone going to like one company gravitating towards like chasing hype. I'm the exact opposite.

I uh back more teal fellows than any other investor or fund and I really try and create my own hype and almost incubate them. Obviously, it's um up to the entrepreneur to build their business, but I put them on the right circuit.

And um the very first company I did this with was I was the angel investor in a company called owner. com in the preede and it's now yesterday they announced their billion dollar. Congratulations. Uh what how are you thinking about this? How are you thinking about the fund sizing?

I feel like most funds when they get to fund four, they're thinking three billion. Um, but you've kind of kept it small. What What are the advantages of that? So, um, I was lucky. So, it took about 3 weeks to raise and I've done some raises in my career and, um, this this was, um, a very smooth process.

Um, and I deliberately kept it small and disciplined. I was lucky. I had a lot more demand. Um, I want to do a good job for people. I want to do a good job for the founders I back and my LPs. And I think smaller fund sizes far outperform larger ones.

Um, in terms of what I'm backing now, I actually have a founder like living with me that I don't know too well. I invited him into my home. Um, another founder I put um his visa on my credit card um personally.

Uh third founder I co-signed for the so it's it's really just about putting people on the right track and being their first believer. That's so that's amazing. Um what uh what overall trends are you excited about or staying away from? What's your take on defense tech?

Uh the application layer in in AI kind of built a the perfect company to benefit from foundation models. Didn't have to train anything, but I'm sure do not pay is benefiting from AI and agents and uh reasoning models. Um but what what are the trends that you're most excited about right now? So I'm founder first.

So wherever the top founders are going, I go. Um, for example, a recent company that I was the first believer in with Corey, um, is called Pilgrim. I think he was on your show a few weeks ago. They they raised an amazing round, uh, I think from Kantos and others, which is a top defense investor. Also excited about AI.

Um, I'm investor in a company called Assured, which helps insurance companies process their claims, and they've received huge traction in the market. Um I I think every AI every company will be an AI company though. So I try and stay away from like founders who are like too smooth with their pitching AI first.

I I think about this with do not pay. We've added AI to our business and really every company should do that. So kind of these AI first pitches where the founders are saying all this jargon like we're building LLM operability dev tools. What does that even mean?

So, I'd like to focus on like real problems and real solutions. Yeah. I I think we actually met Jake Adler of Pilgrim together when we were camping a year or two ago. I don't know if that's the first time you met him, but that was the first time I met I think both of you in person.

Um it was the first time I met him in person, but I this was more in the co era, so I was like doing my program over Zoom. Um but I really enjoyed playing mafia with you guys. I think you can um Oh, yeah. If someone's a good founder or investor by how good they are at mafia. Yeah. Yeah. a lot of bluffing. It's fun.

Um I mean on the topic of like I I mean I love Jake, I love Pilgrim. Um I don't feel comfortable uh due diligencing a company like that because it's so out of my wheelhouse in the biotech space.

Is that one of the benefits of being early stage and founder led is that you can kind of just bet on the founder and you're not you you don't need to do all the technical due diligence or do you like to dig in on that stuff and just get up to speed?

Um I I um I don't want to get into trouble by revealing any like specific numbers, but of my biggest kind of wins, they've been uh sub five or even around two average. Um and so that kind of risk is baked into the uh valuation entry price. Sure. Sure. And I I've seen I've been operator for 10 years now.

I I've seen things come and go. And if you have a founder who truly it's their life's work and they're technical, they have some sort of good success and so they just have to keep at it and stay in the game and not run out of money and then they become really big.

Uh how long do founders stay under the radar today, right? And and if you can invest in a founder at five posts, right? They're typically you're either friends with them, you can add a tremendous amount of value, or they're flying under the radar in some form of another.

And then at c at a certain point they become kind of discovered broadly and they start getting you know these rounds start getting bit up.

It feels like with the internet today, uh, even X, you know, a kid can drop out of college and immediately get, you know, uh, three term sheets in a week, especially if they can go viral, which is like a common thing that we're seeing now with X is that some founder does some sort of stunt, gets a ton of attention, um, and then there's a question about whether they can build a product, but it certainly drives venture capital interest.

But yeah, I'm interested to hear your take on that. So I think we're seeing a rise of like super credentialism. Now VC top VC firms are even tracking math competitions in high school and you have these founders they tell the perfect story. They're like we I won Intel. I won math. I went to MIT. I dropped out of MIT.

I worked at OpenAI and now I'm starting a company. Those ones are super chase. Everyone's chasing them. There's lots of competition. Um but for me I really think it's about creating one's own winners.

And so the best entrepreneurs I've backed, they didn't have those credentials coming in and maybe they needed to be put more on the right track in terms of what they were working on. And um a lot of sometimes investors even passed on them.

Um and so um I really I'm not saying that math competition winners make bad founders. Obviously there's some huge wins with that. But just because someone's good at math doesn't mean that they make a good founder. and there's like more innate qualities that other people aren't signaling on.

How do you think about um kind of the geopolitics of entrepreneurship right now? Um we're in kind of this this odd realignment towards America. There's there's some VC funds that are pushing really hard to invest in Europe. There's other folks that are great at I mean you said you you you paid for someone's visa.

Clearly that sounds like you're bringing a founder from somewhere else to America. uh what what does the trade imbalance look like in the founder ecosystem? Is America still bringing enough uh talented entrepreneurs here?

Is it still fertile ground for uh the global entrepreneurship community to come to America or Silicon Valley and build generational companies? So, I'm originally from England as you guys can probably tell from my accent and I think that America is by far the best place to build a company. People are more ambitious here.

the capital availability is like 100x. Um I I think a concrete example is like the most valuable private company in the UK is like Revolute which is like a bank clone. The most valuable private company in the US is like Open AI or SpaceX. Um there like order of magnitude bigger.

Um so I encourage any founder I back to move to the US and also to move to the San Francisco Bay area. Um, unfortunately, um, still being in the Bay Area really matters a lot, but companies don't have to start in the Bay Area. They could start in Arizona or wherever they drop out from, but they should really move here.

Um, Pilgrim is a great example. Um, Jake started in Canada and then moved to the Bay Area. Um, I also think there's a huge arbitrage on the 01 visa. Um, it's people, it's known as the Genius Visa, but it has like over 95% approval rating uh, depending on the year.

And so you get someone the 01 visa and they're a true genius. They move to Silicon Valley and then they hit the ground running. Uh what about advice for young people?

Do you think uh learning to code or being able to code is still a positive signal or in the age of cursor and windserve and devon and AI tools it's becoming less relevant.

I think the biggest thing is like distribution and being an online first and having these skills of like distributing your product coding and being technical is important but it's just one skill.

Um like I backed the WAP founders um WH as an early check and they were like really deep in like sneakerbot communities and things like that because everyone is starting a company now and you need to break out. I feel like a lot of Stanford students are just starting companies just for the resume.

Um there are so you there's so much noise and you have to kind of wade through that. Yeah, the [ __ ] founders are definitely doing it for the love of the game. I mean they're they're killers. It's amazing. What a great company.

Can you give us uh I know it's not why you're on the show today, but can you give us the update on on do not pay it seems like in so many ways uh the company was incredibly well positioned to benefit from uh improvements at the model layer. Uh give us the update there. Yeah.

So, Do Not Pay is an incredibly efficient business. It's a very small team. It's only 14 people and and seven of those are like expensive employees and seven contractors. Um, and when I started Do Not Pay, it was really about templates to get people out parking tickets.

And admittedly now, ChatGpt can write you a template letter. But AI has improved our product by 5 to 10x. So, instead of helping people with parking tickets, now we have um AI agents. They log into someone's Comcast account and start negotiating with Comcast to get people's bills down.

And the big companies have AI and we have AI and it's like AI versus AI warfare. But we're we're more motivated than the Comcast of the world. And so we're winning like thousands of these negotiations a week. Um, and I think it's a good lesson that I tell all the people I back is like you can't rest on your laurels.

constantly have to be innovating, change the product and adapt with the time. Yep. Makes a lot of sense. Fantastic. Well, thank you so much for coming on the show. We appreciate you and good luck with the new fund.

I feel like uh I I my only concern for Fund 4 is that some of these bigger multi-stage funds are going to sort of pay a private investigator to follow you around and just sort of like see who you're meeting with, you know, ahead of time and be like, "Oh, Josh is trying to do another he's trying to do another, you know, 500k on 5 mil.

Why don't we offer them five on 25? " Has that actually been a problem for you at all? Have have you are are the like the bigger funds the the crazier dynamics is is that is that a trend that uh early stage VCs should actually be worried about? No.

I think Josh's playbook is he meets them he buys 10% before anybody knows about it and then says hey you know you guys you know take them on a road trip. They're not ready for the big funds. They need about a month to kind of get and stuff like that. Yeah, that makes sense.

So, it's not it's not strictly like they wouldn't be sniped even if they could be found because they're just not they're just not in a place to do those types of rounds. That's interesting. Makes a lot of sense. Uh well, thank you so much for joining. Uh this was fantastic. Great to hear the update, Josh.

And uh yeah, congratulations on the new fund. Thank you. See you guys soon. Byebye. We'll talk to you soon. Well, that's a great uh cue to talk about Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development.

Streamline issues, projects, and product road maps. Jord's been using it for the past 35 years. He loves it. I wish fantastic uh planned his whole years before I, you know, was in the womb. I was I was running on Linear. No, you know, a funny little anecdote. Linear sending us some merch. Oh, yeah.

And and the the automated email to notify us that they were sending us merch that's not even available online was like perfectly designed. Designed. No way. That's crazy. Like it was truly incredible. I'm like, "Okay. " Yeah. Culture of design. Every single touch point. We should also talk about numeral numeralhq. com.

Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. It's sales tax AGI, John. It is. We got to get uh we got to get blueprint on numeral. Yeah, we should just spend this entire pitching him bit. What are you doing for sales tax? What if he's just like I'm already on Numel?

It's possible. It's a highly efficient business. I'm excited to talk to him about it. Uh benchmark series A. Um anything else you tracking on Poly Market these days? I saw. Um I'm still obsessed with the world's largest tech company.

Nvidia is surging right at the same market cap as Apple but uh um Nvidia has the uh the momentum. Yeah. Largest company end of May it's the gap has been closed John. Oh yeah it's still so Nvidia is at 42%. Microsoft is at 50%. And uh Nvidia has a lot of momentum. Oh yeah. Nvidia is 42% now. Wow.

who really are ripping today. They were at 20 something just yesterday. Good to be Jensen. Good to be Jensen. I I was I was posting this that that if Nvidia does it, if they pull it off and they're the biggest company, they're going to have to teach Jevans parad $60 billion. It's only a $60 billion gap. Jens one more.

He needs to he needs one more one more deal with conference in the global you know he's been on the conference circuit but it's working like he seems to be at a new conference every single week but uh clearly he's getting business done at these events and he's striking deals and I'm sure it's like you know he meets someone super important like the head of a country and then says my people will talk to your people and we'll get and we'll ship you a 100,000 GPUs.

Yeah, he definitely has envelopes or not not he has napkins with with full fully fleshed out contracts on them. You know, they just he just How many zeros do you want behind the one of the number of GPUs you're ordering? Yeah. Of hoppers. Um, fantastic. I don't know if Brian's here yet. Let's check on him.

Um, and yeah, I mean, maybe we can do some timeline while we wait for him. We got some posts we can talk about. Uh, Mischief collabed with Mercedes. This is a fantastic looking collab. They created a trash can with pedals. Seeing this almost made me angry because I want I want every piece. Yeah.

You were like you were like, "Oh, like what did they do? This is so frustrating. " Yeah. Like did they did they do something that we were thinking about doing or something? No. No. Just incredibly well executed. You can kind of scroll through these and I guess they're going to be selling.

There's an AMG coat hanger that looks like a fantastic coat hanger to hang your jacket on. The couch is just awesome.