Today’s Menu ☕️

• NYC Tech Breakfast Club [Thursday, Dec 14] LAST CHANCE TO REGISTER

• Boston Tech Breakfast Club Recap

• Friends and Family Rounds

• Elaine Cheng, Founder of Disco, talks about experiences, New York, and ketamine

👋 Hi, Breakfast Club Members!

I’m writing this week’s edition from NYC - I’m around for the next week so if you feel like chatting, getting coffee, or going for a walk, hit me up

This is your last chance to register for December’s NYC Tech Breakfast Club. Click the link in the section below

We have space for one more sponsor - if you feel like teaming up for the final Breakfast Club of the year, reply to this email.

NYC Thursday, December 14th 
December NYC Tech Breakfast Club

Breakfast Club OG and elite VC, Lori Berenberg, is back to cohost the final Tech Breakfast Club of the year. It’s going to be a Holiday Breakfast Party.

We’re teaming up with Mike Wolkon, founder of Night Inn, for a bespoke breakfast experience—this will be the most elevated and gourmet Breakfast Club yet!

Night Inn brings live, curated experiences to you—from interactive wine & food pairings to cocktail making—led by the industry’s best. They work with private groups and companies to create exceptional events.

Sign up by clicking the image, or either of the two buttons below or this hyperlink right here.

Boston Wednesday, December 6th 
December Boston Tech Breakfast Club Recap

Kylie and I have been getting great feedback from the founders and investors who attended this week’s breakfast meetup in Boston. I think we’re starting to hit our stride. If you know of a founder building something cool (or weird) in Boston - let me know, I’d love to include them.

We’ll be back in January. Stay tuned for the signup link

Lori & Bloomberg Beta

Lori has been an incredible evangelist for the Tech Breakfast Club since basically day 1. If you've been coming for a while you probably know Lori — but if you're new, you should know that besides being very witty (her tweets have been published in Reader's Digest), she's also a VC who invests as early as possible in founders building the future of work.

Bloomberg Beta is on their fourth $75M seed fund, backed by Bloomberg L.P. Check out their open-sourced operating manual on Github.

Startup Law
Friends and Family Rounds
This past week I got a couple questions from early-stage founders about how to structure their Friends and Family round – meaning their financing round before they take money from angels.

It’s tough to get interest from angels (and VC’s) before you can show some traction, especially as a first-time founder. Unfortunately, although it’s gotten a lot better in recent years, you still might need $75k+ to get to a point where angels will find your startup attractive. Yeah, some founders can get funding off of just an MVP but it’s rare.

 If you’re fortunate enough to have a network of close professional contacts or family members willing to back you at the start here’s some advice:

•  Everyone should still be an accredited investor (this is self-certified)

•  To keep legal costs down, it should look (on paper) like a small seed round with angels (convertible note or SAFE with discount to future equity round price), save for a few crucial differences (described below).

•  Unless someone in your F&F group is a professional angel investor who is comfortable setting a valuation on your company, it should probably not have a valuation cap. This avoids the risk of setting it too high or too low, both of which can negatively impact your next round.

•  It should contain what’s often referred to as an “MFN” (most favored nation) provision allowing the terms to be amended and restated to be on par with the next financing round (when angels get involved). This ensures that the lack of a valuation cap does not result in your later more professional investors (who usually insist on a cap) getting a better deal than your biggest risk-takers (your friends and family).

•  I would go one step further, though, and give your F&F a discount on the future valuation cap that angel investors get (this is not the same as an equity round discount typically contained in SAFEs or Notes). This “Super MFN” on a future valuation cap allows you to reassure your F&F that they’re getting the best deal for taking the most risk, while waiting for later angel investors to actually set the price for you.
  
  Happy to chat more about including a Super MFN Valuation Cap provision, or to share a template, if you’re thinking about a Friends and Family round.

About Morgan
Morgan, besides running Tech Breakfast Club, is a Startup Lawyer at Optimal, an elite lean boutique startup law firm repping clients funded by a16z, Sequoia, Kleiner, Accel, and countless other VCs. He works with clients from formation to exit, in collaboration with Optimal’s partners.

Elaine Cheng
Building Disco (and having a good time)

Longtime Breakfast Club Member Sasha Poldosky introduced me to Elaine Cheng a couple months back. I’m grateful (thanks Sasha!) because Elaine has been an incredible addition to the Club. She’s a Georgetown Law grad turned marketer turned VC turned founder. Her company, Disco is an experience discovery platform that kind of feels like Tiktok. She’s raised over $1m from VC’s like Quiet Capital. But besides being a really thoughtful founder - she’s also a great hang. 

We met up a couple weeks ago to try one of the Disco experiences and chat about her journey.

If you’d like to try Disco, click the link below and skip the waitlist by using code: Download Disco for iOS with code BREAKFAST. 

Okay, so where do you want to start? Should we start with how you’re disappointing your parents by not practicing law?
They still don't know what I do for work. 

My friend, Iqram, co-founder of Venmo, who is also an investor in my company - had a funny idea one time. He said, “call your parents right now. FaceTime them and ask them what you do for work.” 

They struggled so hard. They said, “…you have a company named Disco...and it does things... you build technology. It’s an app.” And that was about as far as they got. 

They’ll eventually have to get over the disappointment of me not being a lawyer. Not today, but hopefully soon.

I saw a tweet from a founder who just raised $20m for his series A. He tells his parents, and they respond, “will this help you get into med school?” Does that track? 
Incredible and so true. I saw the other day a tweet that being a founder is a trauma response. I have my parents to thank for this – as an immigrant you know, you’re not allowed to exist without adding value. Everything is about productivity, generating output and that’s how you are measured. Being Asian is my trauma. 

I take it your parents had to hustle super hard
When my dad got to America, he was delivering newspapers. He worked at Disneyland. He used to climb telephone poles and do electrician work. My mom actually slept in a storage closet for the first couple months that she moved to California. She'd be like, “why did we have to leave Taiwan, this place sucks. America sucks.”

I'm grateful – they both had very difficult lives in the US before I came along, and I get to live an amazing life here. I'm very lucky to be living the American dream. And they’re probably wondering why they suffered to come to the US for me to end up building an app lol. 

So, if you had to get your parents up to speed on Disco, what would you say?
There are a couple of different ways that you market to different consumers, right? The Mom Test is one where you say, “Hey, Mom, I'm going to distill it down – make it as simple as possible and see whether or not you can get it.”

But it's a not product that's made for her. My parents are not the ideal customer profile - not efficient with apps, not really clear on how technology works. 

Instead, we’re focusing on consumers who are hungry for new experiences and the biggest thing we discovered in beta testing was there's this core need around improving experiences in the dating category. 

So we built Disco to look like Tiktok but for cool experiences that you can actually book; it’s based on this really interesting revolution around digital content transforming in real life human behavior. Imagine that Ariana Grande song? See it, want it, buy it. Instant gratification on the spot. 

We saw that there's no vertical landscape just for local city experiences, and we're not going to stop there, but we're going to solve the problem for not your everyday Friday, but the nights you don’t want to forget. A high adrenaline, high entertainment adventure network. 

The three products we have in Disco, which we're calling a premium experience marketplace – 

1)    VIP date night – where you get the best table in the house. Based on your profile, what you like, it’s tailored to you. You like white wine – as soon as you sit down, the waiter brings two drinks straight to the table. Don’t fuck with the awkward wallet reach. Bill has already been taken care of, pre-paid on your card. When you’re done with the date, you just walk away and we have part two of the night planned around the corner. 

2)    Go private — Can you book out a movie theater to yourself for the night? Can you get a private chef, driver, florists to come in and build the experience of your dreams? All custom of course. 

3)    One of a kind experience — These are experiences like “walk the field” or be on the court right before a game. This one is coming soon. 

We want to build out a category of experiences that don't exist anywhere else. Every experience must drive really strong consumer delight. When you build a company in 2024, for it to make sense to the consumer market, it has to make them feel a serious emotional response. It can’t just be a nice-to-have. 

It’s interesting to see how much people spend – in the US, singles spent $117b on their dates last year. That means on average $103 a month is spent on dating per person. That LTV extends into the tens of thousands over your lifetime. In coastal cities however, coastal elites will often spend $1,000 a month or more and I think we personally know people who could spend $1,000 per date. 

And so, we said there's no instant gratification reflex for that type of consumer. There has been a lot of progress made with individual products that do ONE thing really well like Blade or CLEAR – where you get a singular premium experience. Global dining access through AmEx is a good example, too. These are all examples where you can get a better experience - a business class level experience for one unique product offering.  

We said, let's actually build that business class level of experience but for the dating and wellness category. And by the nature of dating, you want to create novelty, excitement, a multi-journey experience. And so, for the next few months we're building out a store of experiences that are all focused on the date night to start.

Why dating? Well you spend more when you care about the other person, right? When you spend for just yourself, you're often spending pretty rationally. I want irrational love-based spending. 

Yeah, I’ve definitely looked at my credit card bill and wondered what I was thinking – you’re just having such a good time 
Life is better when money is spent on good times rather than things.

Explain what we’re doing here tonight
We’re trying out one of Disco’s VIP Date Night experience.

This is for research purposes only – not an actual date
We're at Fellini on a corner in the West Village, off Seventh Avenue. Italian opera music is playing in the background. We're eating a burrata pizza. You're having white wine. I'm having tea. Francesco, who runs Fellini–

Yeah, tell me about Francesco. When we walked in, he immediately greeted me and asked if we had met before at Paul’s (night club) – which we hadn’t but that made me feel good that he thought I was cool enough to get into Paul’s.
Francesco, well, he loves love. He's the ultimate wingman. The perfect partner for a Disco. 

[attempting to imitate Francesco]
“I gotta be the wing man. You bring your girl. When you're on a date here, I’ll make sure you have the best date of your life.”

[laughter]
Guys are definitely willing to pay for this experience because they want to look cool in front of their girl. Studies show that men are more willing to get fired at work than look inferior or look like a failure in front of their partner. 

So, the premium for local star power that men are willing to pay for is pretty high. We call that the ‘flex markup’. Being the man or looking like the man, that's a big deal. Most people never experience that in their lifetime because they’re not a regular or VIP somewhere. They may not be a networker that can get there - but they’re willing to use disposable income to pay for that. 

Describe Francesco – this is certainly a vibe
He’s a well-dressed, well cultured Italian man – a self-professed party boy. He understands his job is to bring the vibe. You can catch him riding his vespa, on his way back from a photo shoot, not wearing a helmet...

No helmet?
It’d mess up his hair.

How do you guard against this seeming inauthentic? Yeah I want a tailored premium experience or to seem like a cool regular but maybe I don’t want my date to know that I’m paying for this special treatment
Well, the other side to being a true regular and bringing your date to a restaurant for a Disco Date Night is she may wonder if you take all your other dates there. The framing is more like you're part of a global diner’s club. Similar to global dining access from AmEx. 

Tell me about your life in New York – I get the sense that you’ve had a lot of fun memorable nights. 
I’m originally from LA and New York welcomed me in a way that Los Angeles never did. I moved to the east coast for law school when I was 21. I took some trips to NYC and interned here. I fell in love with it in a way that you could only fall in love with New York. 

It was… unforgiving, gritty, there was an edge. And for some reason, I thrived off of it. And I think my type A personality increased by 4000 points. It was difficult and that made me excited. It's harsh in nature, but also incredibly beautiful because the people you meet, the conversations you have – you don’t get this in LA, I've tried. The caliber and the level .... the sheer amount of interesting people that you meet here, it's just unsurpassed. 

There are certainly some shitty days – when everything goes wrong, I call that getting New York’d. Oh, so you just walked 30 mins to the pier and they canceled all ferries that day without? You just got New York’d. Welcome. 

Yeah, I love how in New York, it doesn’t matter how much money you have, you have to eventually walk on the same sidewalk as everyone else – LA feels much more isolated. You can’t escape reality or humanity in New York.
Oh my god, yeah. My friends live in this amazing multi-million dollar condo in SoHo. They walk outside and there’s a guy taking a dump in front of them on the sidewalk. It’s definitely an equalizer in some sense. 

Give me a story about a night that was memorable.
Hmmm, well, maybe we’ll have to cut this – we’ll see how it turns out

I have a good amount of friends in the Burning Man community - I recently got invited to a 50th birthday party at the Jenga Building, 56 Leonard. Imagine a hundred New Yorkers all dressed to match the Barbie theme.

A lot of things happened and the night started with me in that bathtub at a Tribeca penthouse and ended somewhere around 6am at Gospel in Soho. And I would call that somewhat “normal” if you live long enough in New York. Everyone’s had some kind of night which cascades into a series of adventures and you wake up the next day in disbelief.  

[ REDACTED ] for Morgan’s ears only 

The next day I called my friend and told her my life in New York is so enthralling – it’s invigorating – and to be honest a bit exhausting. My life is so quiet in Los Angeles in comparison. 

Is it true that you don’t know how to run a paid advertisement? Even though your background is in marketing?
How funny is that? Don’t tell my investors but I don’t believe in paid ads. I can’t wait for all performance agencies to reach out to me after this interview drops. 

My first foray into marketing was with restaurants in LA and inviting influencers to dine there – then the next day, people would walk in with their phones and say, “I want to have what she had.”

So to me, the highest form of conversion is when a human recommends something, not a brand running an ad. (Para-) Social is our future. 

I don’t believe in paid ads in some respect. I mean there’s a time and a place for that. When you're at an early stage though, you need to pick up on the consumer pulse – what do people care about? 

In New York specifically, one thing that’s a common thread is dressing nice, presenting well. So with Disco, we started getting real consumer interest when we released a product called SKIP THE LINE for sample sales —

For the 75% male audience can you explain what a sample sale is?
There are a lot of businesses that run third party discounted luxury resale when a luxury brand does not sell through its entire inventory. They don’t want to mark down their product on their website because it dilutes their brand. Instead, they’ll have private sales through a third party like 260 Sample Sale, who we partner with. So, in practice, if you’re patient and willing to wait five hours in line you can eventually access luxury at a tenth of the MSRP price. 

There was recently a sample sale for The Row, which is a brand that sells $1,000 cashmere tank tops, really exquisite and one of the hottest brands, but the line for the sale was five hours long. 

Okay so SKIP THE LINE did what
It was like CLEAR but instead of airport security it was for bypassing the five hour long line. You could pay extra to access the sale and get a better selection, earlier, in the sale. 

But by tapping into the sample sale – we went viral and got way more traction than if we had done paid ads. Hundreds of thousands of views on Tiktok and our DMs blew up organically with people trying to get access. 

What are some of the highlights of what I can find on Disco?
For you or other stressed founders in this newsletter, I’d recommend one of our extreme wellness experiences.

People are increasingly interested in longevity and wellness. Biohacking. We turned this intense BioReboot experience I had at Hudson Health into a Disco. It’s $1,500 but you get a special 20% offer if you book with us. The mental health effects are pretty insane. 

I got to go in and test it out before we launched it and I felt like years of anxiety melted off of me. I called my mom the next day and told her I loved her, and thanks for birthing me. I’ll explain why. 

The BioReboot is a two part program 1) DSB Shot and 2) Intramuscular Ketamine Shot. Trust me this isn’t for the weak, but it would be great for someone with extreme stress or anxiety. 

There aren’t a lot of people I trust to do this, but Dr. Kuo at Hudson injected local anesthesia into my vagus nerve (close to the trachea pipe) to reset my parasympathetic nervous system. In New York, the flight or fight response constantly fires and this DSB injection resets and relaxes your nervous system, the one that you feel when people say they’re so nervous that “my heart is in my throat”. 

Then an intramuscular ketamine shot went into my arm.  When you take ketamine, you actually have the opportunity — assisted with therapy — to rewire your brain in different ways when you're feeling certain triggers. 

Ketamine actually produces a protein called glutamate. Neural pathways form in your brain, over time — it's kind of like driving a tire in the mud — so through life and time you deepen your neural pathways around positive and traumatic life events. Metabolizing ketamine actually produces neuroplasticity. You can rewire your brain in certain ways.  After I took the shot I put on an eye mask and headphones and listened to binaural beats on a playlist. Literally disappeared for 90 minutes and clocked out to a new dimension before coming back. I can’t describe it but it was the craziest thing I’ve ever experienced in my life. 

I fully tripped SO hard after the BioReboot, it cleared my anxiety to baseline in a way I haven’t felt in…. maybe three years. I kid you not. People used to describe me as unhinged but now I’m pretty chill. 

That’s one of our most extreme experiences. We do everything else in between. I particularly enjoy temperature contrast therapy. You sauna or hot tub and then jump in the cold plunge and then you repeat the cycle a couple times. It increases brown fat in your body and your ability to manage anxiety and depression because it challenges you to control your fight-or-flight response. It stimulates your metabolism and creates a dopamine high similar to those experienced during sex. How cool is that? You can book this at Elahni on Disco. 

Can people pitch you ideas for experiences?
100%. So actually, we haven't rolled this out yet, because we're doing everything in-platform. We want to work with a category of designers, and we're calling them ‘experience architects’. You could say “I've got a foolproof date night/staycation/best night of your life plan. I'm actually willing to sell it on the platform and license that idea.” If you’ve got one, shoot us an email: [email protected].

—

Elaine and the Disco team would love your feedback on our beta platform. Download Disco for iOS and skip the waitlist with code BREAKFAST.