I'm with Sydney Thomas. Sydney is the founder and GP at Symphonic Capital, a pre-seed fund with a long view. The fund is focused on FinTech and health and wellness for underserved communities. Before Symphonic, Sydney was the first hire at Precursor. Sydney, thanks so much for coming on the show.

Thank you for having me.

Yeah, a good chance for me to get to know you and Symphonic a little better.

I thought we'd start there, start with Symphonic and just what does it mean to be a seed fund with a long view?

Yeah, it's such a great question, so for me, I've spent the last seven-ish years in pre-seed and seen this proliferation of pre seed funds all with pretty much the same strategy, which is that we're going to de risk our capital by having many shots on goal. My world view is that the best way to impact your own risk profile is to increase the amount of support. So instead of trying to stretch yourself across many, many, many companies, focus. So, we do about six to eight deals a year, and we focus a lot on how we are helping them post investment.

Have you found ways, um, or have you thought about ways to really leverage that expertise? I mean, it's something I think about as we're, you know, growing the number of portfolio companies. How do you scale that support?

Yeah, so that was my first job at Precursor, so it was how are we thinking through building a firm that scales? And I've been thinking and building in this space for a while now. And how we're doing it at Symphonic is we are really focused on institutionalizing our type of support from day one, and so we have a clear and very structured how we work with founders.

Can you give me some examples?

Yeah. I think one of the things is we have really structured check ins with founders, and so each check in has a very specific list of questions I think what I've seen in the market more generally is that Investors often expect founders to drive those check in meetings, and I think that's very true and reasonable once the companies actually have a board and, you know, they have like board decks and they're doing all of this work, but at pre-seed there's no board, there's no board deck. So oftentimes the founders just kind of show up to the meeting saying like, okay, well, I really don't know what to expect here, what do you want to talk about? So we come with a list and have KPIs that we check in with them on a consistent basis and then track over time. And so we have insight around what actually is the company doing well, where might they need additional support? How can we continue to have a really great pulse on where they're performing.

And tell me about then like going from your first check to sort of making follow on investments.

this is a huge piece of what I think. Is missing in early stage investing is everyone outsources the decision on how their companies are doing to the next person. So everyone's passing the buck at pre seed. Most investors aren't interested in actually helping the founders understand what success looks like at seed because they don't know.

They're not the ones who are actually going to make that seed decision. What I think is really interesting is that having gotten access to a lot of these seed funds, I've calibrated what success looks like across all of them and have built out a list of KPIs that we are really excited about these companies hitting so that we can double down on the companies at Seed Round.

I think that there's still a lot of inefficiencies at Seed that enable us. To be really competitive against these seed funds and actually when those deals
And so what we're doing at Pre Seed is actually giving them an opportunity to also interview us and see if they want us to take that board seat So you will do the precede, but then you'll also potentially lead the seed.

Exactly.

How structured for you is it on the, follow on or the subsequent investment?

Yeah, you know, I think the high level here for me is that like, I think a lot of folks treat seed companies is like, Oh, it's just an idea. There's no way we can measure success. And actually, at seed, there's a company. There's revenue, there's customers, there actually is stuff to wrap your hands around

But at the precede, when you're investing initially, there's less of that, right? And so, you're really more evaluating the person I assume.

Yes, we are definitely evaluating the person. Also though, we don't do pre product companies. And to us, what that looks like is post product, pre product market fit.

So there still is some stuff.

To the underwrite, but exactly to your point, though, a lot of that, too, is the founder. And so we're really excited about actually understanding the intentions of that founder, because one of the things that we think a lot about is. The fact that precede is just hard. It's just hard.

Oh, it's hard at every stage though. Unfortunately, it's true. It's true. And I think I precede that you're not making a ton of money. You're not really, you know, have a lot of people to help you. It's just a grind. And so you need to have this. Truly a rational obsession with the problem and the community that your product is solving a problem for So we ask a lot about why are you in it? What are you doing it for? Who are the folks you're serving? What is your connection to that community and really interested in founders who have a really strong tie there.

what are you seeing, you know, you've, done maybe six years working at the early stage with early stage founders.

What do you see for the ones that don't make it to the next stage? You know, are there sort of common advice you're giving or ways that you're sort of helping people avoid, mistakes that you've seen in the past?

It's a great question. And I think the answer's so dependent on truly like the year of the company. I think that so much has changed, and what it takes to go from one stage two another that wasn't true, I'd say in like 2019 to 20 21, 20 22. I think that.

The cool thing now is, you know, I think foundation, metrics profitability, like the basics are back in favor in a way that I'm just so excited about. And so the companies that are doing really well are the companies that have built true businesses. Not companies that are really great at selling stories.
And I think that the folks who did really well in 2019 and 2021, both of those things didn't need to be true. You could be a great storyteller and have nothing. And we're seeing this in TechCrunch and PitchBook almost daily now, of companies that grew and raised 15 million, 20 million, 100 million, and had Not even one paying a customer had zero.

And so let's talk about your areas of focus. So health and wealth, What is digital health? I sort of know what it is, but who are the customers today? What does that look like today?

So digital health for us. Because I think also digital health is so broad. And so I'm just gonna talk about Digital Health Force. Sym Phonic is, we're really excited about companies that are the way we say it is closing access gaps for overlooked communities. And so that means increasing access to services, access to products.

That enable you to live a healthier life.

So, companies that I'm excited about are companies that I've been investing in for years. And so, a few that are from my track record include companies like Carta Health, which is helping folks who are suffering from cardiac disease get access to remote rehab services.
Companies like Mira, that is helping folks who do not have health insurance access health care benefits. And so in each one of them the payer is different. So Mira, it's direct to consumer. So the folks who are getting access to services are the ones who are paying directly for the service, compared to Carta Health, which is insurance.

And so they're building partnerships directly with insurance payers and also hospital systems that then enable access to care for their end consumer.

Got it. Do you see trends there where more people are, you know, going directly to users as payers or to insurance? I mean, for a few years we saw a lot of, uh, employer sponsored health plans as payers.

We did. That's such a great point. And yes, we did. I'd say Especially a few years ago when, you know, I think compensation, especially for tech employees was at an all time high and folks are looking to build out other strategies to help retain their employees. We saw a lot of investment from HR and to things like.

Different types of health care products. I think we've seen a lot of pullback in that area, largely because of this rebalancing that is happening in tech around both compensation and, Benefits. And so I'm really excited, , digital health companies that are targeting insurance.
I think that insurance is not going away anytime soon. they just touch so many lives, and I honestly think the cool part is that This community that I'm targeting through my investments there's just so much innovation that they haven't seen yet, because I think as a community VCs have been focused on the same. , I like jokingly say like the same zip code.

hmm. Mm

Not even like the same segment of community but truly like Yhe same zip code of people for so long

why don't others see it? I mean, I could answer that question sort of, but like, why don't others see it? And do you think it's not seeing the opportunity or almost like not seeing the founders in a way?

I think that one of the saddest parts about VC is that you kind of exactly to what I was saying before that, like, this is a job that gives you the opportunity to learn consistently all the time. And yet, there seems to be this culture of people who want to pretend like they know everything.
And I think if you like to pretend that you know what you're doing. You really are afraid to take Risk in a way that I think is actually what we're paid to do. And so there's this, I think lack of, humility empathy and understanding and, potentially being open to the fact that you might, just not know, and you might just be wrong. And this founder might know more about what they're talking about than you do.

So what is that? Is that just human nature to want to feel like you know what you're talking about? I mean, like there's that, like humility, it's hard, especially on a sort of more public stage. But do you think there's something structural in venture that is making people More so, feel like they need to act like they know what they're talking about, there's so much there. Many. I'm like, trying to figure out where I want to go with this, because we could go like a lot of different places. Thanks.

I want to hear it, I do.

Okay, and so like I'll say it and then let me I'll send you a note around whether or not I want to keep this in because essentially my answer to that is really focused on the gender gap in venture. I think that the fact that it is so male dominated forces this over Transcribed index on traditionally masculine traits, which are certainty. And that is actually, I think, completely in conflict with the job at hand, which is that we are compensated to take risk. And to invest in things that we don't yet know will be successful and in people who we don't yet know will be successful. And so that requires a certain level of healthy balance. And that is, I think, a more traditional feminine trait.

Yeah think that the acting with confidence. Does tend to be a more male trait and I was on a panel discussion and the question was, women are told not to speak with verbal uptick.

Yeah.

it's a feminine trait, or it's a feminine trait,
Right.

And the moderator was saying she actually wrote a post and she was saying that speaking with verbal uptick is not necessarily a bad thing.
It leaves room for disagreement.

she wrote a post called, maybe we should all talk like a woman, question mark.

Yes.
I love that so much.

And venture capital, though, we reward entrepreneurs. It's a whole industry. It's not just in VC, it's we reward entrepreneurs who come in and say. I'm going to land a spaceship on an asteroid or whatever, and I have confidence that I can achieve it. And you want people who are big and bold, but maybe what you're saying is it doesn't leave room for as much listening Exactly.

Now I'm just talking instead of asking you, but that,

No, I love it. Yes. Let's make it a combo. I love it.

Because yeah, you had some stuff, which I will quote from your website. I wrote it down. the world of startups is full of hype chasers and smooth talking hucksters, which. , maybe I've just been in it too long and I've drunk the Kool Aid, but I actually tend to say the world of startups is like, full of inspiration, and I'm like, still starry eyed by it.

I mean, both can be true.

You can have both. And I agree. I'm constantly inspired by the founders that I work with and the ones that I get the privilege , to watch build what they're building. And I think especially in pre seed when you don't yet have. Anything to show for yourself?

Mm hmm. Mm

There is, I think, a tendency to gravitate towards those who have this really brilliant and beautiful story.

And it's this, I think, amount of obsession with the creation of the company as a business that we like to over index. That I think keeps us Separated from some of the more traditional hype chasing hucksters.

Wait, say it again. Do you over index on the company as a business? Is that what you said?

yes, the people who like are interested in building businesses instead of doing, I think, stories and hype for the sake of hype.

Do you think that that means that you would invest in companies that are building really solid hundred million dollar companies and that most a venture wouldn't?

I think that's a false dichotomy. I don't think that it's either or. I think there's, back to some of these, you know, more of the masculine traits, it's like either this or that, like, maybe it's both

Yeah, so you left Precursor to build this on your own. That took some courage. Yeah. So, you know, what was your thought process there

Yeah, I think a big part of it was, I know how to do this. It was actually a huge vote of confidence in myself and my own experience. I think that I was a very active part of building. Something else that became very successful and that active participation gave me the skills and information that I needed to build this thing.

Awesome. So how do you talk about symphonics brand

So, and you alluded to this by, you know, calling out some of the things we're talking about on our website is we're just really blunt in a way that I think is, you know, refreshing to founders and something that they don't get often, but I think there's this You know, I spent some time in New York before I came back home to California. And, I think there's kind of like these opposite ends of the spectrum. It's like in New York, I don't know if you've seen that, like two by two, where you can either be nice or kind and kind is when you don't really tell anybody the truth. No, no, no. Maybe that's nice. I don't know. I always get it confused, but there's like these words to describe what it looks like to be both honest But not mean And we are really excited about being both honest and Not mean, whatever that, circle is.

Yeah, I think you said you give really direct, maybe blunt feedback to founders when you're not investing. I mean, I find that really hard because, at least for me, I feel like at least 50 percent of the time the reason we're passing is because of team.It's easy to give feedback on the presentation, the product, the market.

It's hard to say we didn't invest because we, for some reason, didn't get there on team.

How do you do that? Where you're still nice or kind or whatever you're trying to be.

Yeah. So at Pre C there isn't really much of a team yet. And so it really is just the founder and maybe a co founder. And so, we almost always tie it to experience. Like how are they experienced or not in this space? Okay. So it's an experience. Um, I just, I still find it hard because I just feel like everyone's so delicate when you're a founder, you can, you know, and, and I never want to discourage people from building their dreams. And so the, feedback is hard.

It's so hard. But you know. That's also part of being a founder. You've gotten bad feedback. I've gotten bad feedback. I've yeses. I've gotten tons of nos. It's part of the job. And so you have to be able to roll with both punches, which I think is back to the, as long as you're not being like mean spirited about it.

I think it's okay. These folks are, they knew what they're getting themselves into. I was talking to somebody actually recently about This who was saying that, you know, the flip side of that is you're then preventing them from having this opportunity to learn or to actually experience the reality of, of the work that they're deciding to be a part of.

And I think that's also a helpful reframe where it's not just that maybe you're protecting them, but also it might be that you're preventing them from a really core or key learning.

no, it's good. And it's the way the world works. What surprised you about building Symphonic?

Hmm. somebody said, being a business owner, if you're not having a hard conversation every day, you're not a business owner. And I loved that. Because I think the thing that I realized really early on is that, um, was that it's a series of hard conversations like every day. And I didn't anticipate that part of the work, but it's also a really cool opportunity for me to step into my leadership style in that way.
And it's not always pretty, I'm falling on my butt and my face, often, but I think that there is this really important. Communication skill that I have learned through launching Symphonic.

how has your communications style then changed or improved?

There's been more of it. I'm an internalizer. I like to think I like to process. I like to be in a corner in a room and just journal it out and just kind of like be in my own head for hours and hours and hours. And when you have a team, that's not How you can run all the time.
there's a lot of information that I'm not allowing my team to have access to when I'm almost hoarding it by being in that corner by myself. And so it's been a lot more of this Building consistency into my own communication
Hmm, and then Going through my important questions here. Um, how, when and why did you move back to Southern California? Because, sorry, we didn't even start there. You're in San Diego, if I'm not I am I am. I love it here. I'm back home. It's honestly been so nice to have so much more space to think. I'm now able to get some of that space by just being out of the bubble that is in Silicon Valley. I think when you're in the bay, you're just getting pulled into a happy hour or something all the time.

do you live with your parents or do you just live near your parents?

I live with them.

Yeah, so do I. Not with your parents. I live with my own. And I love that. I like living with my parents a lot.

Me too. I think there's something really special about that because Our jobs are so weird. They're so weird. And so I'm able to, over lunchtime, talk to them like, oh yeah, I just got off this really crazy call, like leap them into my world in a way that I think was so foreign to them in even a few months ago.

Yeah, it's kind of grounding like everyone else doesn't care about deal that you missed or something.

Literally, literally, they're like, Oh, cool, they'll let me go on for a little bit and then bring it back to something else.

That's so much actually more important.

Yeah, the plumber. That's what we talked about last night.

Anything looking back on your career that you do differently?

Hmm, I think everything was. When I'm in it, you know, that's so easy to say like, Oh man, if I just would have done this one thing last year, if I really missed the boat when I didn't do that thing two years ago. And then you realize, you know, how much information you were able to gather and learn both about yourself and your abilities and your dreams. Through your, the work and the life that you lived, because I don't know what the outcome would have been if I would've changed anything else. Like this outcome that I'm at right now is the best

Do you actually get the chance though to be like, okay, you know, my 13 year old self would be proud to see me here.

Oh my god. I try. I did a hike this morning and I just sat and just thought for a while about just this journey and it was great. Do you have any particular, like, when you're, like, for me, it's my 13 year old self would be relieved, I think. But how do you, frame it for yourself?

Hmm. I'm usually reflecting on really my grandpa. And so he was someone who would just, always give me the best advice. And so usually when I'm reflecting on my progress or my work, it's, Thinking about what he would be thinking about me and all these things, so.

Yeah, like I will be so excited for your success and I think there's going to be so many people who are so excited for the success of Symphonic
and I just appreciate what you're building and appreciate you coming and telling me a little bit about it.

thank you so much for asking me such great questions, it was great to be here.