Bigger Isn’t Always Better - A VC Reality Check with David Mandel

Is bigger always better?

In this episode of Leadership Levers, we sit down with David Mandel, Managing Partner at Emerging Ventures Capital, to explore how culture, capital, and leadership collide in high-growth environments.

David shares his journey from aspiring AI researcher in the 1980s to serial entrepreneur and now venture investor - offering a rare, full-circle view of leadership evolution. 

Having built and exited four underwriting and finance businesses, he’s experienced firsthand how culture can make or break a company, no matter how strong the financials.

His biggest lesson? “We allowed profits to come first.” David recounts a moment when rapid growth overwhelmed his team and degraded performance - serving as a cautionary tale for today’s “scale at all costs” startup mindset. The stress of tripling business volume without the capacity to support it became a cultural breaking point.

Now, as a venture capitalist, he advises founders to be intentional - question growth goals, hire people who match your values, and focus on execution over ego. His cultural formula is simple—but often overlooked: “Hire the best people, let them do their job, and get out of their way!"

Whether you’re scaling a startup or leading inside a mature organization, this episode challenges conventional thinking - and reminds us that sustainable growth starts with culture and people, not capital.

Seeking to align your culture, boost performance & impact your bottom line? Let’s chat—no sales, just real talk about your challenges. Not ready? Join our PL3 Community for free insights & connections. 

Transcript

Copy Transcript Copied

Meet David Mandel

William Gladhart 0:00

Welcome to the Leadership Levers Podcast . I'm your host , Will Gladheart , CMO at the Culture Think Tank . At the Culture Think Tank , we empower leaders with metrics that strengthen culture , drive performance and return . We're here today to learn about the actions leaders have taken to address organizational change . Today , our guest is David Mandel , Managing Partner at Emerging Ventures Capital . Thanks for taking the time to join us . Thank you , Will , Excellent . Well , let's begin by having you share with our audience a bit about yourself , your background and your organization .

David Mandel 0:40

Short version of a long career . Academically I kind of went full circle . I wanted to be in AI when it wasn't cool to be in AI and I was an applied math major , a dual major , computer science , applied math undergraduate back in the late 80s and then went to graduate school for mathematics , never finished the doctorate , passed the master's comp and decided to drop out and go into business because there just wasn't much of a future at the time in that field . Long behold where we are today completely different story , but , funny enough , my interest back then was looking at artificial intelligence in particular although it was taking different forms back then and I was really interested in the whole computational side and all of that . So it's really interesting to watch the evolution of that .

David Mandel 1:25

Went into business , had a relatively successful career building and exiting four separate businesses around insurance and finance , all in Southern California where I still live today .

David Mandel 1:37

You know they were each different businesses , mostly underwriting businesses , where we were balance sheet companies .

David Mandel 1:43

We took on risk , so I was a lifelong underwriter , whether it was having the second largest non-standard auto insurance carrier in California , which we exited to Kemper in 2014 , or having a subprime auto lender and a couple of other businesses along the way over about a 28-year career . From that , I started to see some really amazing technologies around 2011 , 2012 , and coming to us as vendors at the time . I got excited and started to look into that and started doing some angel investing and it became a passion and eventually I decided I wanted to do that full-time and exited my businesses that I had at the time and became a full-time investor and fast forward 2019 , partnered , I started a small fund , emerging Ventures Capital . We're now on our third fund there , our third vehicle that we're investing from . From that fund , we invest in US and Canada-based B2B tech startups that are using emerging technologies to solve business challenges . I get to spend most of my day talking to the geniuses inventing the future , and that's kind of cool .

William Gladhart 2:51

That's yeah , I love that . I love that you shared . You've come full circle from that mathematics and quantitative background to now being back in it many years later in a different version . And congrats again on your third funding of capital . You know , outlay for the emerging ventures . That's really exciting . So you've obviously worked with a lot of different leaders , a lot of different individuals . We'll be discussing three questions today as a startup to our conversation , would you share why you believe a healthy culture is critical ?

Culture is Everything

David Mandel 3:20

Culture is everything and we've seen it over and over . I've seen it myself running businesses as's infectious If you get one bad apple who's disgruntled , before you know it you have a whole disgruntled team . So having an aligned , motivated team of people focused on execution is critical . When we're today in my role , when I'm judging potential startups to invest in , what I look for is not necessarily culture , but the founders who eventually will have the right culture or instill the right culture in the team . What I look for in them is that spark and that grit combination of basically , they get stuff done . They are go-getters , they're enthusiastic , passionate and just no-nonsense moving fast , and they will have that personality where they'll attract others like them around them and together they will be able to get a lot done very quickly on a smaller budget than their competition , and that's how they'll win .

William Gladhart 4:42

Yeah , no , I love hearing that . I think that's important for any new leader , but also seasoned leader , to hear . Is that progression and trajectory of culture ? So it's been our experience that leaders tend to struggle in three key areas people , profit or performance . Kind of . In your role as mentoring other leaders in the past or present , working with individuals who are growing companies very quickly , can you identify which of these areas tend to present a challenge for leaders in a growth stage company , or is it a combination thereof ?

David Mandel 5:16

And that's a softball question , because obviously it's a combination and they kind of all lead to each other , kind of a chicken and the egg . But if you don't have the right people , then you a chicken

Growth Problems and Profit Pitfalls

David Mandel 5:24

and an egg . But if you don't have the right people then you won't get the performance and when you don't get the performance you won't get the profits . So it's hard to say kind of which come first , but I think it's definitely people first , which will then get the performance and which will drive the profits . The profits are last .

William Gladhart 5:38

Yeah , absolutely Well , it's interesting that not everyone picks people first , but sometimes it's all around the profit and that doesn't necessarily go as well as as planned . So can you identify a challenge that negatively impact an organization that you were leading , mentoring , growing , that specifically kind of either challenge the leaders or was going to have some significant impact on the outcome of the organization ?

David Mandel 6:03

on the outcome of the organization . Yeah , so one of the biggest mistakes I made , actually in my role as a leader in the prior life , is allowing profits to come first at one point . We had situations so sometimes bigger isn't always better and that's a hard lesson to learn , especially when you have a sales mindset in the business . And we had situation where we were left in what seemed like an amazing situation where a couple of large competitors , for various reasons each different reasons , some internal , some external stopped writing new business in a certain field and left us swamped with more business than we're like three times the amount of business than we used to have . And initially we were really excited and we allowed it all in . Rather than taking any measures to restrict production , we thought let's just take it , pile it on right . But then you have to service it and the continuous strain of getting more business than you can handle can be only good for so long You're straining your people and you can't grow higher fast enough and train people fast enough . At the end that hurts the culture , that creates a stress , a continuously strained , stressed environment , and then performance degrades and at some point more is not better and growing bigger isn't always better . Growing fast is not necessarily good , and that's advice I give today to some startup founders .

David Mandel 7:25

Where there's , in the venture capital space in particular , there's a culture of grow at any cost , just grow , grow , grow , grow , grow . I really have to step back sometimes and look at their plans and really tell them it's like you know , are you sure you want to do that ? And my model now a lot of times is that bigger isn't always better . Be careful what you ask for Really think twice about . Is that what you want ? Or should you stay smaller , grow slower and have a different culture , a different environment ? Because once you go down that path , it's hard to take a step back . If you bring in the kind of investment that is going to expect that kind of growth , then you're getting onto a hamster wheel that's hard to get off of and I've seen a lot of founders five years later say I wish I .

William Gladhart 8:09

Yeah , well , it's reflective is always great . But at the same time , I really appreciate that you mentioned the opportunity cost of high growth , but also high growth without being able to manage that growth effectively in a business . Because as talent moves through the pool , we've had instances of companies we work with that last year there were 40 employees , this year there's 125 employees . People don't know each other . There's things breaking down in the operational and process pieces there . All of a sudden is high turnover they never dealt with before . People are in and out . I think it's really wise that you advise individuals to make that progressive stair step to the next steps . Again , you've worked with a lot of different companies . What was maybe one thing you identified that helped impact

Success Through Empowered People

William Gladhart 8:54

a culture positively ?

David Mandel 8:56

It's from the top down . When the founders empower their people to just get , they hire the best people and they empower them and let them do their job and stay out of their way . That's high level , but that's really what it comes down to . If you really wanted to still it down , hire the best people , let them do their job and get out of their way .

William Gladhart 9:17

And that's some pretty simple advice , but very effective . So , as we wrap up our conversation today , is there anything that you would like to add or share with fellow leaders from your experience ?

David Mandel 9:29

For me , success and a startup and even a mature business is all about execution and , as we said in the beginning , and as you alluded to over and over , that's about the people . Hire the best people , let them do what they need to do , and everything else will fall into place . It's less about structure and more about good people doing what they need to do , feeling empowered , and the rest will fall into place and the profits will follow .

William Gladhart 9:58

That's pretty keeping it simple , but I do like that . So , David , thank you so much for being our guest today on the Leadership Levers podcast . I really appreciate your insights . Thank you , Will .

Episode Closing and Resources

William Gladhart 10:10

Thank you for joining us on the Leadership Levers podcast . Find all our Leadership Levers episodes on the Culture Think Tank website at www . theculturethinktank . com , or listen on your favorite streaming platform . We'd love to hear from you about the challenges you have faced as a leader . Tune in weekly as we invite leaders to share their experiences in strengthening culture and performance , one action at a time .