Dana Settle of Greycroft on investing through AI cycles and the sustainability opportunity

for joining. Very exciting times. Uh the IPO window is is is squeaking open and it's open more every day. We talked to the founder of Circle today. Uh very good showing. Would love to talk to you about that, what's going on in the markets, what you're investing in today.

But would you mind uh introducing yourself for the audience members? For anybody that's been living under a rock. Yeah. Living under a data center as you like to say. Yeah. Thank you. Yeah. Dana Subtle, co-founder, managing partner at Gay Croft. Um been a venture capitalist for uh a very long time.

Started out in 1998 on Sand Hill Road. So, wow. Seen a few cycles. Yeah. What What was the first uh what was the first big deal that you kind of really really tracked or invested in or followed? Like were you were you tracking like Yeah.

What what deal allowed you the right to be a VC for more than maybe four years, right? Because it's you know the first four years it's kind of like you can make some bets but eventually you know there needs to be story. Yeah it's a it's a good question.

Um so you know when I first started in venture we were investing in all kinds of things but more you know it was like networking equipment and semiconductors and storage and you know sort of that was building the the um last you know the really the first generation of the internet and so some of the companies um from that era were are are no longer exist.

They're actually bought by much larger networking equipment you know companies etc.

But a similar dynamic you know where we would invest uh um I didn't wasn't expecting this question so I'm basing it on the name of the company but literally it was like you know from oh god optical equipment company and it was you know in like 18 months sold for $2 billion. Yeah. Wow. Wow. There we go. That's amazing.

Yeah. To be clear though I was, you know, I was the number two on it. Course. Of course. Yeah. But that's great. Uh it is fascinating how much the networking equipment space has kind of come back into focus with the AI boom. We talked to Kevin Wheel over at OpenAI. He's on the board of Cisco now, right? Yeah.

Uh and and so and we've talked to another founder who is working on uh optical cabling in the in the data center because as we scale up these models and so everything old is new again. Um but what is most new for you? Uh what have you been focused on? What's been uh what's been in the news in the last couple weeks?

Um yeah. Well, I mean, in terms of what's new and what we're investing in is certainly in all of the, you know, sort of AI, everything from infrastructure up through applications. Um, so that's not nothing terribly surprising there.

But it is interesting to really look back to the history, you know, sort of history of the internet and see how much things are repeating um right now in terms of what's being built. Um, the other thing that we uh do is we actually have a sustainability fund.

Um, and we've done that in partnership with some strategic partners.

So Coca-Cola and eight of their largest bottlers um globally and what's been so interesting about that is we are there's such a huge intersection essentially between AI and sustainability people don't really think about it but you know if you look at energy consumption doubling by 2050 I mean something's something's got to give and oil and gas right now but I think that's where we see a lot of a lot of opportunity not just in renewables but actually in like the you know software ware and hardware for sort of reimagining how all of that's consumed.

Yeah, you imagine that all the hyperscalers are going to need to kind of re-evaluate their ESG mandates. There's already a lot of companies in the space like Crusoe Energy started by flaring natural gas plants there.

There was wasted energy and uh there's obviously a ton of news in in solar and nuclear and all all sorts of stuff. The energy landscape has been um fantastic. Um would you mind taking us through the the latest IPO experience? How was that?

Uh I'd love to hear that story uh kind of from start to finish because uh it we like there's so many VCs that have been in the game for a long time and not actually been through that process because uh the companies love staying private. Well, other reasons too. Plenty of other reasons.

There's a lot of there's been a lot of pressure to stay private, right? Well, it's really interesting. I mean, I don't know. That's like a whole other tangent and I'm kind of obsessed with it because it is really interesting if you look at, you know, the what the public markets are today which I is really interesting.

It's just really different. Um it's almost going back to potentially what it what it used to be, you know, where it was like smaller IPOs and it was um actually, you know, access to growth opportunities to more retail investors.

Um so uh so anyway but but our most recent IPO is a company called Mountain and it's a pretty amazing story incredible founder serial entrepreneur technical background and um really you know he essentially started the business I mean we invested actually in 2011 so this gives you a little bit of a sense of overnight success overnight success um overnight success we have a soundboard here like It's every founder we talked to.

I mean, we talked to the circle founder and it was the same thing. He's like, "Yeah, I've been doing this for a decade. " And, you know, today actually, well, it's funny to see Jeremy Lair, you know, talking about, I mean, I remember when he had a video search startup in the last, you know, generation.

And so, it's really interesting to see these, you know, things sort of come full circle. Incredible entrepreneur. No pun intended. Yes. Sorry. But anyway, back to the story of Mountain. Back to the story of Mountain. So, uh, so Mountain Mark Douglas, um, you know, really again, incredible founder.

Um, he had started, um, one type of an adtech business essentially, um, back in sort of the display days. And when we first invested, just to give a sense, it was a $4 million series B. Wow. No way. Think about like what that means today. Now it's like four billion. It's a series that's around for ants.

It's around for ants. But, you know, it needed a capital and it worked. Yeah.

And so and and really you know that market changed pretty dramatically when all of the regulation around cookies etc you know happened and Mark had the foresight to take what was a hundred million plus dollar revenue business super profitable and essentially build an entirely new business saw that connected television would be the next major ad platform I mean and again seems very obvious now but wasn't definitely wasn't consensus at the time and he essentially just built that out of cash flow from the old business sunset that business and built this one up to now the company that went public uh two weeks.

Uh we're talking to the founder of AG1 uh next. I'm interested to hear your take on celebrity partnership. There's so many different configurations whether it's just uh the celebrity investing just like any other investor and then maybe they've add some value to co-founding the company incubations.

uh what is your view on the on the role of of celebrities or people that bring differentiated value ad in the startup ecosystem? Well, I think what you just said is the key which is differentiated value ad. Um, and you know, in the case of Mountain, we we did partner with Ryan Reynolds and and his marketing agency.

And um, you know, and that was sort of a fortuitous connection, but you know, it really just I I actually was introduced to to Ryan and his team as they were sort of thinking about what to do with their agency.

And it was just in this moment where I was like, "Wow, what you guys are trying to do in terms of really making ads that sort of, you know, move at the at this at the pace of culture, like I have the perfect platform for you.

" And you know, really Mark and Ryan just sort of saw eye to eye on on on really how to build this business. Um, but again, that was so really um authentic to Ryan and his team. It's just like what they want to do.

They want to make really cool ads that really resonate with people, not to just make ads, but really, you know, to to sort of make them at the pace of culture, and Mountain is the perfect platform for that. And and that's why I think it's worked so well.

We saw literally I mean the crazy thing is when you think about I think about celebrity or influence as being largely marketing right I mean it's and so if you sort of look for like a dollar for dollar replacement totally mountain's inbound leads went from like 2% to over 60%. Wow that's crazy.

Well, it's also interesting to think in a in a B2B business like Mountain, like somebody like Ryan Reynolds effectively acting as a sales rep and just like messaging a CEO and being like, "Hey, I'd love to set up a demo with you. " And it's like that just that impact alone in terms of bringing spend on the platform.

I mean, we've been joking about this. We talk about ourselves as like enterprise influencers because all of our sponsors are basically B2B companies for the most part. And and and and it's just like it's kind of a new era, but it but it's working. And Ryan's clearly carved out just a very unique position.

It's he's not just somebody you just pay to show up for an ad. And there are there are celebrities that have built great businesses on that. Um but he's taking a very different tact.

I'm curious when you made the mountain investment, was there any was there people maybe in in the investment committee or other investors that were friends that sort of were writing off TV at the time digital was exploding. And now you know looking back it's like TV advertising has exploded. It's continuing to grow.

Even in the US, I think in 20 past sometime past 2030, it'll be well beyond, you know, hundred billion dollars in in uh spend just here in the United States. So TV advertising is clearly not going away.

But I could imagine 10 years ago a lot of um you know, you know, a a Facebook PM that became an investor would probably have written a memo that said like this market is going to you know, go away or or at least shrink. Yeah. And and and I I would clarify I mean a couple things. I think 10 years ago for for sure.

Um I think TV advertising has is changed. I mean this is largely advertising on connected television, streaming television.

Um so really the distribution has fundamentally changed but um yeah I mean we actually had investments in some companies that you know like 15 years ago that were actually um you know improving the process for television ads and we sold those businesses gratefully and made a profit on them.

So, but um but so when Mark proposed this, I think what was counterintuitive is all of those businesses were subscription. I mean, the idea was not to have ads in those streaming services, right? Yeah.

And so what's happened in the last 5 years is now all of those streaming models have moved to where the majority of subscribers that are coming on I mean if you look at the public earnings um from you know Netflix and um you know Disney etc. that the majority of new users are coming onto their ad platforms. Yeah. Yeah.

Uh do do you have I mean I'm sure I'm sure you know investing and being in LA often um like there's probably celebrities that come to you with like hey I want to get into venture. I want to have exposure one way or another. Uh and there's so many different models.

Do you have uh any any recommendations uh for all the celebrities that are listening uh for for the the the best way to get to get exposure to tech or or just patterns to avoid so that they don't get over their skis? Yeah.

I mean, look, I think it's like anything like whatever you're truly really curious about and you really want to dig into, I mean, that's where you should spend your time, right?

I mean, I I think if you're just sort of dabbling, I mean, I guess if you want to have in investments um to sort of talk about because you think it's like just in the zeitgeist, then great, like invest in some funds, you know? Exactly. I was going to say more more just LP. Yeah.

Either LP or like be deeply involved in the company. But yeah, exactly. Yeah. Or if you just want to, you know, kind of learn about investing like that's a great way to do it.

I think if you want to actually be, you know, direct investing, angel investing, um, you know, I think actually, um, again, just sort of following like your true curiosity and the areas where where also where you can really make an impact.

And that's why I think like with, you know, again, going back to Ryan and his team, I mean, they're amazing marketers. I mean, like best-in-class. And so, um, you I think that's where, you know, I would just sort of like encourage any any celebrity to do what they're truly passionate about.

And I think if you you know look at um where things have really worked outside of you know Ryan I mean I think um you know what Gwynneith has done with Goop. I mean I think it's just these are just very natural to I mean they're they're things and Goop Kitchen which is another you know sort of spin-off from Goop.

I mean it's it's the food side of it and it's again it's just what's so natural to her. It's what people expect her to be you know sort of recommending and excellent at. Right. Yeah. Yeah. Yeah. Totally.

Um, what about uh what's your how how what are your thoughts around the evolution of LA's ecosystem on a personal level? I think my last five LA county investments were in the Gundo. Um, and uh haven't done haven't done much outside of that, but uh I'm curious, are you are you disappointed? Are you uh accepting?

Uh are you still excited? Do you do you see a lot more growth here?

It seems like San Francisco has certainly sucked a lot of the oxygen out of LA if you want to be I I I had one portfolio company that was you know a consumer AI business that was in LA and just like had to bail like almost within two months uh just because of a talent a $350 billion company popping up in San Francisco will do that but yeah what is your been give us the temperature check on I mean you know look I think um there's No question.

I think there's a sucking sound back to to the Bay Area and you know again it's sort of like early days of any major technological shift. Um you know I think that's naturally going to happen. Um it's Silicon Valley you know and so we actually uh opened an office up there for the first time last year.

Um we've hired a new partner up there team up there and we're all spending a lot of time up there. I I mean for us I mean I love LA. I moved here I did spend 10 years in Silicon Valley before moving here but I moved here almost 20 years ago.

I think LA is an incredible market and I think having access to this market and really having a deep understanding of a lot of the industries and network here is super valuable.

Um but the talent density from a you know just technology standpoint right now Silicon Valley is just a super important place to have a strong network and so we're you know we're spending time both places.

We've also I mean we are spending time also in you know the gundo and in other and you know on other things um which are certainly um big growth areas in LA.

We also um led an investment that we think is super exciting uh called whatnot um which is LA based company you know fastest growing um largest live streaming shopping you know um platform in the United States.

So, I mean, we think that there'll always be great companies here and continue to be, but there's definitely a AI talent density in in the Bay Area. I think we were talking when when not exits. Yeah. When Whatnot exits, it'll be like LA's back. LA's back. And then people will be like, "Oh, I never lost faith.

I never lost faith. " Yeah, it's hilarious. Well, we had Scopley also lastly was fantastic. That was that's pretty pretty great story. And continue service Mountain SpaceX. Yeah, there's a couple. It's not the worst place. We're doing okay in the country.

Uh, but I I think LA kind of like surprises people when you dig into the numbers as opposed to it's not as loud because Hollywood is the thing. It's the it's the Hollywood town that happens to be uh above expectations at in tech and hasn't made as much noise about it. Uh anyway, this has been fantastic.

Thank you so much for hopping on. Super fun. Congratulations on the on the big win. We'll talk to you soon. Great to see you guys. Bye. Cheers. Have a Uh any any other breaking news that we need to cover in between our guests? No, we're good. No politics. Yes, we're so back. Let's talk about AG1.

Let's talk about consumer package goods. Uh let's bring in Cat from AG1. How are you doing, Cat? Good to see you. Welcome to the show.