20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch11 Jan 2023

20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs

How To Raise a Venture Capital Fund

Over the last 4 years, I have raised around $400M across different vehicles from many different types of investors. Today I am going to break down the early stages of how to raise a venture capital fund and then stay tuned for a follow-up to this where we will break down a fundraising deck for a fund, what to do, what not to do etc. But to the first element.

Your Fund Size is Your Strategy:

The most important decision you will make is the size of fund you raise. So much of your strategy and approach will change according to your fund size target (LP type, messaging, documentation, structure etc). Remember, your fund size is your strategy. If you are raising a $10M Fund, you are likely writing collaborative checks alongside a follower, if you are raising a $75M fund, you will likely be leading early-stage seed rounds. These are very different strategies and ways of investing.

MISTAKE: The single biggest mistake I see fund managers make is they go out to fundraise with too high a target fundraise. One of the most important elements in raising for a fund is creating the feeling of momentum in your raise. The more of the fund you have raised and the speed with which you have raised those funds dictate that momentum. So the smaller the fund, the easier it is to create that heat and momentum in your raise.

LESSON: Figure out your minimum viable fund size (MVFS). Do this by examining your portfolio construction. In other words, how many investments you want to make in the fund (the level of diversification) and then alongside that, the average check size you would like to invest in each company. Many people forget to discount the fees when doing this math and so the traditional fund will charge 2% fees per year and so across the life of the fund (usually 10 years), that is 20% of the fund allocated to fees.

Example:

We are raising a $10M Fund.

20% is allocated to fees for the manager and so we are left with $8M of investable capital.

A good level of diversification for an early-stage fund is 30 companies and so with this fund size, I would recommend 32 investments with an average of $250K per company. That is the $8M in invested capital. Big tip, I often see managers raising a seed fund and are only planning to make 15 investments, this is simply not enough. You have to have enough diversification in the portfolio if you are at the seed stage. No one is that good a picker. Likewise, I sometimes see 100 or even 200 investments per fund, this is the spray-and-pray approach, and although works for some, your upside is inherently capped when you run the maths on fund sizes with this many investments.

A big element to point out in this example is we have left no allocation for reserves. For those that do not know, reserves are the dollars you set aside to re-invest in existing portfolio companies. Different funds reserve different amounts, on the low end there is 0% reserves and on the high end some even have 70% of the fund reserved for follow-on rounds.

In this example, given the size of the fund being $10M with a seed focus, I would recommend we have a no-reserves policy. Any breakout companies you can take to LPs and create SPVs to concentrate further capital into the company. This is also better for you as the manager as you then have deal by deal carry on the SPVs that are not tied to the performance of the entire fund.

So now we know we know $10M is our MVFS as we want to make at least 30 investments and we want to invest at least $250K per company. Great, next step.

Set a target that is on the lower end, you can always have a hard cap that is significantly higher but you do not want the target to be too far away that LPs question whether you will be able to raise the fund at all. This is one of the biggest reasons why many do not invest in a first time fund, they are unsure whether the fund will be raised at all.

The Team:

Alongside the size of the fund, the team composition is everything, simply put, LPs like managers who have invested in the stage you are wanting to invest in moving forward. They like to see track record.

IMPORTANT: I see so many angels write checks into breakout Series B companies and then go out and try and raise a seed fund with this as their track record. Do not do this, this does not prove you are a good seed investor but merely shows you have access at the Series B. These are very different things.

With regards to track record, in the past, TVPI or paper mark-ups were enough, now there is a much greater focus on DPI (returned capital to investors). LPs want to see that you have invested before at that stage and they also want to see that the team has worked together before. You want to remove the barriers to no. If you have not worked with the partners you are raising with before, LPs will have this as a red flag, and as team risk, it is that simple.

Navigating the World of LPs (Limited Partners)

The size of the fund you are raising will massively dictate the type of LPs that will invest in your fund.

MISTAKE: You have to change your messaging and product marketing with each type of LP you are selling to. A large endowment fund will want a very different product to a Fund of Funds.

Example: If you are a large endowment, you will invest in early funds but you want the manager to show you a pathway to them, in the future, being able to take not a $10M check but a $50M check from the endowment. Whereas the Fund of Funds will likely want you to stay small with each fund. So when discussing fund plans, it is crucial to keep these different desires in mind.

If you are raising a $10M fund, you will be too small for institutional LPs and will raise from individuals and family offices. An LP will never want to be more than 20% of the LP dollars in a fund and so the size at which an institutional LP (really the smallest fund of funds) would be interested is when you raise $25M+ and they can invest $5M. Generalisation but a good rule of thumb to have.

LP Composition of Your Fund:

Speaking of one LP being 20% of the fund dollars, it is helpful to consider the LP composition you would like to have for your fund. The most important element; you want to have a diversified LP base. A diversified LP base is important in two different forms:

  1. No LP should be more than 20% of the fund at a maximum. That said you do not want to have so many investors in your fund it is unmanageable. LPs need time and attention and so it is important to keep that in mind when considering how many you raise from. Some LPs will want preferred terms or economics for coming into the first close or being one of the first investors, if you can, do not do this. It sets a precedent for what you will and will not accept and then for all subsequent investors, they will want the same terms and rights.
  2. You want to have a diversification of LP type (endowments, fund of funds, founders, GPs at funds etc). Why? In different market cycles, different LPs will be impacted and so if you only raise from one LP type, if a market turns against that LP class, then your next fund is in danger.

Example:

We will see the death of many mico-funds ($10M and below). Why? The majority raised their funds from GPs at larger funds and from public company founders. With the changing market environment, most GPs are no longer writing LP checks and most public market founders have had their net worths cut in half by the value of their company in the public market and so likewise, are no longer writing LP checks. In this case, the next funds for these funds will be in trouble as their core LP base is no longer as active as they used to be. We are seeing this today.

Prediction:

  • 50% of the micro-funds raised in the last 2 years will not raise subsequent funds.

Going back to the question of diversification, my preference and what we have at 20VC, the majority of dollars are concentrated from a small number of investors. Of a $140M fund, we have $100M invested from 5 large institutions. These are a combination of endowments, Family Offices, a High Net Worth Individual and a Fund of Funds. The remaining $40M originates from smaller institutions or individuals, for us we have over 50 making up that final $40M. For me, I really wanted to have a community around 20VC Fund and so we have over 40 unicorn founders invested personally in the fund as LPs.

Bonus Points: The best managers select their LPs to play a certain role or help with a potential weakness the manager has. For example, I was nervous I did not have good coverage of the Australian or LATAM startup market and so I was thrilled to add founders from Atlassian, Linktree, Mercado Libre, Rappi and Nubank as LPs to help in regions where I do not have such an active presence. If you can, structure your LP base to fill gaps you have in your ability.

Status Check In:

Now we know our minimum viable fund size, we know the team composition we are going out to raise with, we know the LP type that we are looking to raise money from and we know how we want our desired fund cap table to look.

Now we are ready to move to the LPs themselves.

Fill Your Restaurant with Friendlies:

As I said, the appearance of your raise having heat and momentum is important.

Mistake: The biggest mistake I see early fund managers make is they go out to large institutional investors that they do not have an existing relationship and spend 3-4 months trying to raise from them. They lose heat, they lose morale and the raise goes nowhere.

Whatever fund size you are raising, do not do this. Fill your restaurant with friendlies first. What does this mean? Go to anyone you know who would be interested in investing in your fund and lock them in to invest. Create the feeling that progress is being made and you have momentum.

BONUS POINTS: The best managers bring their LPs with them for the fundraise journey. With each large or notable investor that invests in your fund, send an email to the LPs that have already committed to let them know about this new notable investor. This will make them feel like you have momentum, they are in a winner and many will then suggest more LP names, wanting to bring in their friends.

MISTAKE: Do not set a minimum check size, some of the most helpful LPs in all of my funds have been the smallest checks. Setting a minimum check size will inhibit many of the friendlies from investing and prevent that early momentum.

The bigger the name the incoming investor has the better. You can use it for social validity when you go out to raise from people you know less well or not at all. Different names carry different weight, one mistake I see many make is they get a big name invested in their fund but it is common knowledge to everyone that this LP has done 200 or 300 fund investments, in which case, it does not carry much weight that they invested in your fund. Be mindful of this as it can show naivety if you place too much weight on a name that has invested in so many funds.

Discovery is Everything:

The world of LPs is very different to the world of venture. 99% of LPs do not tweet, write blogs or go on podcasts. Discovery is everything. When I say discovery I literally mean finding the name of the individual and the name of the organization that is right for you to meet.

This can take the form of several different ways but the most prominent for me are:

  1. The Most Powerful: Create an LP acquisition flywheel. What do I mean by this? When an LP commits to invest in your fund. Say to them, "thank you so much for your faith and support in me, now we are on the same team, what 3 other LPs do you think would be perfect for the fund?" Given they have already invested, they already believe in you and so 90% of them will come back with 3 names and make the intro. Do this with each LP that commits and you will create an LP acquisition flywheel.

Bonus Point: The top 1% of managers raising will already know which LPs are in the network of the LP that has just committed and will ask for those 3 specific intros. They will then send personalized emails to the LP that has just committed. The LP is then able to forward that email to the potential LP you want to meet. You want to minimize the friction on behalf of the introducer and so writing the forwardable email is a great way to do this.

  1. The Most Likely to Commit: LPs are like VCs. When one of their portfolio managers makes an intro and recommendation to a potential fund investment, they will place a lot more weight on it than they would have otherwise. So get your VC friends to introduce you to their LPs, it is that simple. Remember, you have to remove the friction from the introducer. So, make sure to send the email they can forward to the LP. Make this personalized and concise.

Mistake: Many VCs do not like to introduce other managers to their LPs as they view it as competition. This is moronic. If the manager asking for the intro is really good, they will raise their fund with or without your intro. If they are not good, then you can politely say it would not be a fit for your LP and move on. Do not be too protective of your LPs from other managers.

  1. The Cold Outbound: I am not going to lie cold outbound for LPs is really hard. Here is what I would suggest:

  • Pitchbook: It is expensive and many cannot afford it but if you can, it is worth it for LP discovery. They have thousands of LPs of different types on the platform all with their emails and contact details. Those are less useful as a cold email to an LP is unlikely to convert but just finding their names and the names of their organization is what is important. You can then take that to Linkedin to then find the mutual connections you have with that person and ask for a warm intro.
  • Linkedin: Many LPs have the funds that they have invested in on their Linkedin profiles with the title "Limited Partner". If they are invested in a fund that is aligned with the strategy that you are raising for, there is a strong chance they might be a fit. For example, I invest in micro-funds and have invested in Chapter One, Scribble, Rahul from Superhuman and Todd's Fund, and Cocoa Ventures, so you see this and see I like sub $25M funds with a specific angle.
  • Clearbit: Often you will know the name of the institution but not the name or position of the person within the institution that you are looking to raise from. Download a Google Chrome Plugin called Clearbit. With Clearbit you can simply insert the URL for the organization you would like to speak with and then all the people within it will appear and you can select from title and their email will be provided. Again, if you do not want to cold email, you now have their name which you can take to your community, to ask for the intro.

MISTAKE: LPs invest in lines, not dots. Especially for institutional LPs, it is rare that an institution will meet you and invest in you without an existing relationship and without having followed your work before. A mistake many make is they go to large institutions and expect them to write a check for this fund, it will likely be at best for the fund after this one or most likely the third fund. This does not mean you should not go to them with your first fund but you should not prioritize them and you should not expect them to commit. I would instead go in with the mindset of we are not going to get an investment here, so I want to leave the room understanding what they need to see me do with this first fund, to invest in the next fund. The more detailed you can get them to be the more you can hold them to account for when you come back to them for Fund II.

Example: If they say, we want to see you are able to price and lead seed rounds and we are not sure you can right now. Great. Now when you come back to them in 12 months' time, you can prioritize the fact that you have led 80% of the rounds you invested in, and their core concern there has been de-risked.

In terms of how I think about LP relationship building, I always meet 2 new LPs every week. I ensure with every quarter, I have a check-in with them and ensure they have our quarterly update. This allows them to follow your progress, learn how you like to invest, and communicate with your LPs. It also really serves to build trust. Doing this not in a fundraising process also removes the power imbalance that is inherent within a fundraise and allows a much more natural relationship to be created.

Episoder(1389)

20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank

20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank

Samir Kaji is the Managing Director @ First Republic Bank, a leading private bank and wealth management company on Sand Hill Road. Samir, has 13 years of banking experience, working with venture capital and private equity clients in Silicon Valley. Prior to joining First Republic, Kaji worked for Silicon Valley Bank. Samir writes an awesome blog on the VC, investing and startup scene at (http://pevcbanker.com). All the data and research mentioned in today's show is provided by the kind team at Mattermark, check them out here! In Today's Episode You Will Learn: 1.) How Samir made his way into the wonderful world of venture and technology? 2.) We often hear the term, Micro VC bandied around, are there any common characteristics and criteria that discern Micro VCs from traditional VCs? 3.) Why has there has been this massive growth of the seed stage funding environment? What is driving this end of the funding cycle? Is it being damaged with the rise of AngelList syndicates? 4.) What trends and emerging themes has Samir seen come out of this exponentially expanding sector? What effect has AngelList had on the MicroVC market? 5.) What are Samir's thoughts for the future of seed funding? What do you think the seed funding landscape will look like in 20 years time? 6.) Why do smaller funds tend to outperform larger VCs? Items Mentioned In Today's Episode: Samir's Fave Blog or Newsletter: Dan Primack: TermSheet, Ezra Galston: Breaking VC Samir's Fave Book: Phil Jackson: A Team In Search Of It's Soul, Adam Grant: Give & Take As always you can follow Harry, The Twenty Minute VC and Samir on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here!

2 Des 201529min

20 VC 092: The Repeatable Playbook of SaaS with Ed Sim, Founding Partner @ BoldStart Ventures

20 VC 092: The Repeatable Playbook of SaaS with Ed Sim, Founding Partner @ BoldStart Ventures

Ed Sim, Founding Partner @ Boldstart Ventures, Ed truly has had the most astonishing career in early stage SaaS having led first round investments in todays market leaders, LivePerson (now on Nasdaq) and GoToMeeting (acquired by Citrix). Over the 19 years in early stage SaaS he has also helped a number of entrepreneurs scale from seed to market leader with his portfolio companies being acquired by the likes of Google, Linkedin and Salesforce, and I would like to say that all the data and information presented in today's show is provided by the kind folks at Mattermark, check then out at www.mattermark.com In Today's Episode You Will Learn: 1.) How Ed made his way into the wonderful world of venture? 2.) Why did Ed start a seed stage SaaS fund? Where did he see the market opportunity?How was the fundraising process for Ed? Were there any surprises? 3.) How does Ed view the current seed stage funding environment, is there too much money chasing too few deals? 4.) Ed backed cloud companies in 2000. What is different from then vs today’s saas companies? 5.) How do you value early stage SaaS startups, when there are often very few clear metrics at this stage? 6.) What makes a great enterprise founder at seed stage? 7.) How has the seed stage SaaS environment changed over the 19 years of Ed's career? Items Mentioned In Today's Episode: Ed's Fave Blog or Newsletter: Jason Calacanis: LaunchTicker Ed's Fave iPhone App: Slack As always you can follow Harry, The Twenty Minute VC and Ed on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here! Have you ever wanted to know who someone is simply from an email address?With Loyalty Bay's Super Users product now you can. Simply input an email address and it will go off and find publicly available profile information i.e. Linkedin, Facebook, Twitter etc for that email address. This is incredibly powerful in building a richer data profile on your users for marketers and business development people alike. Free 30 day Trial. Check out www.loyaltybay.co.uk

30 Nov 201525min

20 VC FF 024: Raising $33m in VC Funding with Nikos Moraitakis, Founder & CEO @ Workable

20 VC FF 024: Raising $33m in VC Funding with Nikos Moraitakis, Founder & CEO @ Workable

Nikos Moraitakis is the Founder & CEO @ Workable, one of Balderton Capital's latest additions to their portfolio. Workable is the affordable and usable hiring software that which replaces email and spreadsheets with an applicant tracking system that your team will actually enjoy using. Prior to founding Workable, Nikos was a Senior VP of Business Development at Upstream where he played a key role in the company's growth from startup into one of the world’s top marketing technology companies, where he was actively involved in enterprise sales across 40 countries in 4 continents. In Today's Episode You Will Learn: 1.) How Nikos made his way into the world of startups and tech and founded Workable? What was the a-ha moment? 2.) What was it like starting a company in Greece? Were there sufficient levels of engineers? Why did Workable decide to move some operations to the US? 3.) Why does Nikos think the enterprise SaaS space has become so hot? What has changed? Has this upturn in interest made it easier with more capital inflowing or more difficult with increased company creation? 5.) How did Workable meet their investors? How was the fundraising experience? What was the challenging and surprising elements of the journey? Advice to founders? 6.) Looking back at his time founding Workable, what does Nikos wish someone had told him at the beginning? Items Mentioned In Today's Show: Nikos' Fave Book: Fooled by Randomness Nikos' Fave Blog: Bill Gurley: Above The Crowd As always you can follow Harry, The Twenty Minute VC and Nikos on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here! I would like to say a huge thank you to our sponsors today, LoyaltyBay. Have you ever wished more of your website visitors would convert into a sale, signup or referral? If so, you need Loyalty Bay. With their saas conversion optimizer tool they increase any conversion metric by offering potential customers a choice of personalised rewards to get them to convert. They work with large enterprises like Virgin Media through to startups and have increased conversions on average by over 100%. Free 30 day trial at www.loyaltybay.co.uk

27 Nov 201523min

20 VC 091: Daniel Waterhouse @ Balderton Capital on Investing Styles, Venture Landscapes and The Future of AI

20 VC 091: Daniel Waterhouse @ Balderton Capital on Investing Styles, Venture Landscapes and The Future of AI

Daniel Waterhouse is a General Partner @ Balderton Capital, which he joined in 2013 and he currently sits on the boards of Top10, ROLI, Lovecrafts, TrademarkNow, Tictail, Achica, Thread and Workable. Prior to Balderton, Daniel spent 5 years as a partner at Wellington Partners and invested in a number of fast-growing companies including EyeEm, Hailo, YPlan, Bookatable (also a Balderton portfolio company), SumAll, Readmill (sold to Dropbox) and Qype (sold to Yelp). Before Wellington, Daniel was a sector partner at 3i where he worked on all of their venture and private equity investments in the internet sector in North America and Europe. In Today's Episode You Will Learn: 1.) How Daniel made his way into the wonderful world of VC? 2.) How has Daniel's mathematics background impacted his investing style? 3.) At Balderton 50% of the partners have very operational backgrounds and 50% are much more investment rooted. What has Daniel gained and missed as an investor from having a outside view of the startup world? 4.) How has Daniel seen the landscape change in the last 15 years? What was his first pitch meeting like? What was his last like? 5.) What are Daniel's thoughts on the enterprise SaaS space? Do Daniel think there is further to go in the consumerisation of Enterprise Software? Does the announcement of Emergence moving from the sector signal a turning tide? 6.) Daniel led the investment in Curious AI and Thread, using machine learning to augment its stylist approach, so what makes Daniel excited about the developments in AI? How is the sector going to develop over the next 20 years? Items Mentioned In Today's Show: Daniel's Fave Book: The Brain That Teaches Itself Daniel's Most Recent Investment: Curious AI As always you can follow Harry, The Twenty Minute VC and Daniel on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here! I would like to say a huge thank you to our sponsor for today's show: LoyaltyBay. Have you ever wished more of your website visitors would convert into a sale, signup or referral? If so, you need Loyalty Bay. With their saas conversion optimizer tool they increase any conversion metric by offering potential customers a choice of personalised rewards to get them to convert. They work with large enterprises like Virgin Media through to startups and have increased conversions on average by over 100%. Free 30 day trial at www.loyaltybay.co.uk

25 Nov 201522min

20 VC 090: Balderton Capital's General Partner, Suranga Chandratillake on What It Takes To Be A Great CEO

20 VC 090: Balderton Capital's General Partner, Suranga Chandratillake on What It Takes To Be A Great CEO

Suranga Chandratillake is a General Partner @ Balderton Capital. He was previously an entrepreneur and engineer having founded blinkx, the intelligent search engine for video and audio content in Cambridge in 2004. He then lead the company for eight years as CEO through its journey of moving to San Francisco, building a profitable business and going public in London where it achieved a peak market capitalisation in excess of $1Bn. Before founding blinkx, Suranga was an early employee at Autonomy Corporation - joining as an engineer in the Cambridge R&D team and ultimately serving as the company's US CTO in San Francisco. In Today's Episode You Will Learn: 1.) How Suranga made his way into the wonderful world of VC? 2.) Why are so many technical European CEOs fearful of continuing the position as CEO? What can we do to improve it? 3.) What does Suranga think makes a great CEO? Which CEO Suranga respects the most and why? 4.) How have Suranga's years as an entrepreneur affected his investing style? Does Suranga have a consistent investing style or does he look to iterate a lot? 5.) Balderton is an Equal Partnership VC, what does that really entail? Why does Suranga think this model is the most efficient? Looking at the new appointment of Lars, how do the GPs assess new candidates for the treasured GP position? 6.) What sectors is Suranga most excited by and why? Does Suranga think there is further to go in the consumerisation of Enterprise Software? Does the announcement of Emergence moving from the sector signal a turning tide? Items Mentioned In Today's Show: Suranga's Fave Book: The Old Man And The Sea Suranga's Most Recent Investment: Cloud Nine As always you can follow Harry, The Twenty Minute VC and Suranga on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here! I would like to say a huge thank you to our sponsor for today's show: LoyaltyBay. Have you ever wished more of your website visitors would convert into a sale, signup or referral? If so, you need Loyalty Bay. With their saas conversion optimizer tool they increase any conversion metric by offering potential customers a choice of personalised rewards to get them to convert. They work with large enterprises like Virgin Media through to startups and have increased conversions on average by over 100%. Free 30 day trial at www.loyaltybay.co.uk

23 Nov 201525min

20 VC FF 022: Crowdfunding Is Here To Stay with Ayan Mitra, Founder & CEO @ Crowdbnk

20 VC FF 022: Crowdfunding Is Here To Stay with Ayan Mitra, Founder & CEO @ Crowdbnk

Ayan Mitra is the Founder & CEO @ Crowdbnk, an investment crowdfunding platform that allows you to invest in high growth businesses through both equity and debt. Ayan himself has a background as an enterprise architect and technical manager, having worked with leading consumer companies including M&S, Orange and First Direct. He took his LBS MBA to follow his passion and launch CrowdBnk in 2011. Since 2011 Crowdbnk has raised nearly £20m for high growth startups. In Today's Episode You Will Learn: 1.) How did Ayan make his way into the world of startups and tech and start Crowdbnk? 2.) What is Crowdbnk, how does it work, what companies Crowdbnk raise for, what is their minimum investment etc? 3.) What are the key drivers of the massive rise of the crowdfunding sector? What effect will the recent SEC ruling have on global crowdfunding? 4.) With the greater and greater amounts being raised on these platforms, does Crowdfunding have the potential to replace VCs in the future? 5.) What are the greatest barriers to mass market adoption of the crowdfunding model? What have been the biggest challenges faced in the journey with Crowdbnk? 6.) How do crowdfunding platforms plan to draw investors away from funds and other portfolio based assets given the level of risk associated with investing in young companies? Items Mentioned In Today's Show: Ayan's Fave Book: Intelligent Investing by Benjamin Graham Ayan's Fave Crowdbnk Investment: Gojimo by George Burgess As always you can follow Harry, The Twenty Minute VC and Crowdbnk on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session you can follow him on Instagram here!

20 Nov 201524min

20 VC 089: Eric Paley @ Founder Collective on Outliers, Inspirational Founders and Pro Rata

20 VC 089: Eric Paley @ Founder Collective on Outliers, Inspirational Founders and Pro Rata

Eric Paley is the Managing Partner at Founder Collective, one of the world's most successful seed funds with investments in the likes of Uber, Hunch, Makerbot and About.me. Prior to Founder Collective, Eric was the Co-Founder and CEO of Brontes Technologies, later acquired by 3M for $95m. Following it’s acquisition Eric began making angel investments and it was not long before Eric and David, 'super angel' at the time, saw the potential for a Founder First seed fund and Founder Collective was born. In Today's Episode You Will Learn: 1.) How Eric made his move into the wonderful world of venture from founding Brontes Technologies? 2.) What does Eric make of early stage valuations? When creating a venture fund why did Eric believe the seed stage was the stage with the most opportunity? 3.) Question from the legend, David Hornik @ August: At such an early stage where Founder Collective traditionally put in $0.1m-$0.3m, does Eric feel they put in enough money to make it matter? 4.) Does Eric believe that by not doing follow on rounds they are missing out? Does this resistance to seed funds set Founder Collective apart? David did mention that you have begun to follow on now, so what makes you follow on with one portfolio company and not another? 5.) The Founder journey is testing both physically and emotionally, what elements of support do Founder Collective provide outside of the business relationship? Items Mentioned In Today's Show: Eric's Fave Book: Fooled By Randomness As always you can follow Harry, The Twenty Minute VC and Eric on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session you can follow him on Instagram here!

18 Nov 201532min

20 VC 088: David Frankel @ Founder Collective: The Most Founder Friendly VC in Existence

20 VC 088: David Frankel @ Founder Collective: The Most Founder Friendly VC in Existence

David Frankel is the Managing Partner at Founder Collective, one of the world's most successful seed funds with investments in the likes of Uber, Hunch, Makerbot and About.me. Prior to Founder Collective, David was the Founder and CEO of Internet Solutions, one of the largest ISP providers in Africa. Following it’s acquisition David made his move into the investing game becoming one of the very first ‘super angels’, following exceptional success in this field, David along with Eric Paley (coming on the show on Wednesday) and Micah Rosenbloom founded Founder Collective, a seed stage venture fund whereby everyone at Founder Collective has started a technology company, they have lived and breathed the founder experience, a true founder friendly venture fund. In Today's Episode You Will Learn: 1.) How did David make his move into the wonderful world of venture from being a founder and 'super angel'? 2.) Question from Spencer Lazar @ General Catalyst: How has David evolved as an investor over time? Has his strategy and approach altered? 3.) David has experienced some immense cycles both up and down, how has he seen the seed funding environment evolve? 4.) What was it like working with Chris Dixon from a16z? What advice would David give to someone looking to maintain or create a network around them? What other sources of deal flow do you utilize? How do you most like to be approached? 5.) How did FC's investment in Uber come about? What does David make of the regulatory hurdles Uber face with regards to employees or contractors? What is the future for Uber? 6.) What can we expect from Founder Collective? What is David excited about and why? Items Mentioned In Today's Show: David's Fave Book: Eating Well For Optimum Health, Playing The Enemy David's Fave Blog: Dan Primack, Term Sheet David's Most Recent Investment: Pillpack As always you can follow Harry, The Twenty Minute VC and David on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session you can follow him on Instagram here!

16 Nov 201527min

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