Maynard Webb is allergic to caffeine and "doesn't do coffee." The founder of Webb Investment Network and the chairman of Yahoo, Webb drinks his decaf coffee black and likes it to be made quickly and efficiently. He doesn’t have the patience for your half-caf, venti soy, caramel-coated monstrosity.
Yet Webb's perceived aversion of coffee culture didn't stop him from making a personal investment in Philz, a California coffee chain with a cult-like following and more than $30 million in venture capital funding. Philz, led by CEO Jacob Jaber, started with just one storefront in the Mission neighborhood of San Francisco and by the end of the year will have 30 stores. Jaber's goal is to scale Philz' obsessed customer base beyond the West Coast by turning it into a national chain.
It would be easy to look at Webb's investment in Philz as a sure sign of a funding bubble in Silicon Valley. Why would an investor throw money at something that he isn't personally really that interested in?
When you sit down with Webb and Jaber — as I did last night as part of the latest LinkedIn Discussion Series — you realize Webb and Jaber became partners not because of a mutual affinity for caffeine (although Webb does really like Philz's custom decaf blends.) They are partners because they both are eager to learn from each other, a trait that both say is hard to come by in today's ever-growing world of startups.
"Often [entrepreneurs] don't want a lot of help. It is soul food for me to run into someone like Jacob who is killing it, but wants help and is listening to input," Webb said on stage at the Speakeasy Brewery in San Francisco in front of an audience of about fifty entrepreneurs and investors. "Lots of them want help when they get into trouble, but it's like your employees. You want to spend the most time with your A players than with the folks you are trying to fire."
Jaber added that he has tons of investors — including other Silicon Valley elite like former Apple SVP and J.C. Penney CEO Ron Johnson and even Snoop Dogg — but only a few mentors. A community college dropout who has been working on the family coffee business since he can remember, Jaber says he still has a "learner’s mindset" that keeps him constantly searching for partners like Webb that he can learn from.
"It was really important to me to make sure that people weren't just adding money, but smart money," said Jaber. "We only meet every so often, but an hour with Maynard is like a year in school."
Pleasant partnerships like Webb and Jaber's aside, our conversation last night didn't end without acknowledging the somewhat difficult funding environment that entrepreneurs and investors find themselves in today. With no shortage of capital and late-stage valuations skyrocketing, Webb said it is more important than ever to really understand where your capital is coming from.
"You can raise good money and get a horrible partner in the board room and you are stuck with them," he put bluntly. "You have to choose your partner. That is way more important than the money."
For Jaber's part, he said he isn't focused much at all on whether times are good or, well, closer to R.I.P: Good Times. Instead, he just wants to build a sustainable business. Calling raising money a "sexy" part of being an entrepreneur, Jaber added that you should really focus on what the goals are for the business and if money is really a big part of that or not. If it’s not, no need to stockpile as much money as you can so you can survive a coming winter like some VCs may advise.
"You want to partner with people that are the right fit," he said. “Above and beyond just money it is about the values... I don't like sugar coating, I don't like massaging, I like getting better, I like moving forward and I like authenticity and respect."
