A Story From the Trenches
Building a Company Creation Fund from the Ground-Up
Early in 2021 I started working on a loosely validated “venture studio” concept called FutureSight as one of the earliest founding members. Fast forward, we are well into our A.I Company Creation Fund, proudly backed by some of North America’s most successfully exited entrepreneurs. We are privileged to be working with 7 world-class US & Canadian CEOs on launching new Vertical A.I B2B software businesses. It’s a unique moment in time where the access to cutting edge machine intelligence is democratized and we get to decide what the future looks like and play some small part in shaping it!
How I Got Here
My curiosity to join this mission was sparked after a 5-year stint at the helm of Maple Leaf Angels, the country’s prominent retail investor group (deploying >$50M into 100+ startups). The first thing I learned is that venture investing is a power law game. My admiration for the smarts and dedication of the players in global angel community runs deep. However, the risk-reward trade-off led me to feel, “There has to be a better way to play this game.”
Enter FutureSight. As if it wasn’t hard enough to build one company successfully. Or to deliver good returns as an investor, we’ve built a dual-entity that is, first, a co-founder to a portfolio of CEOs and their companies and second, a fund deploying capital into these companies with the intent to generate top decile LP returns.
Last week, we were in New York for Vault Fund’s industry defining TakeOff Summit — a gathering of the world’s most active allocators and creators in this category. I am surprised by the number of institutional and family office allocators I meet who are increasingly aware and bullish of the model. Once a year, we meet fellow believers like us and are reassured that there is great success to be had. I asked the Managing Director of a European Venture Studio why he was building his fund, and he responded, “I like hard things.”
Lessons Learned
That’s what this ~4Y journey has been: hard. But that’s also what building something from zero feels like. And there is so much more to be figured out, but for now, I wanted to share the main themes from each of the stops on the ride so far:
- Team — Stacking the team with people you’d bet on individually to crush it; hungry and with a learning attitude. People talk about having the right combination of A players, B players and C players. When you’re starting out, I wouldn’t do it over without a team of A players. Everyone on our team acts like a co-founder.
- Founder/CEO Pipeline — Relevant for funds or studios, I think we’ve iterated on our target founder persona for 4 years, and will be refining it for the next 4. However we have a lot more clarity, and that helps with objective decision making. It also helps with targeted pipeline building. Even the most prolific investors will double, triple, quadruple down on good talent > a good business idea. We are working exclusively with repeat founders and seasoned CEOs. Can talk later about why.
- Product/Market Fit — I find that the traditional VC’s job is to say “no” as much as possible because they’re picking outliers; our job is to say “yes”, because we’re creating outliers. The most fun part about what we do is developing conviction in problem / solution areas and backing it up with our human and financial capital. The next part is leveraging our network and expertise to help these companies grow, and grow fast.
- Downstream Capital — We want to partner with those downstream investors that are aligned, and we want our companies to be well-resourced as they scale.
- Portfolio Management — This burns a lot more for us studios than VCs, specifically doing this well and at scale. This is the reality of having real skin in the game.
- LP Fundraising — Be prepared to kiss a lot of frogs! And you better love what you’re selling every day, because if you don’t, there’s a much less predictable path to success.
- Community — This is the innovation ecosystem flywheel at work. While we started sort of isolated during Covid, I’ve realized we can’t do this alone. It takes more than a village to accomplish what we need to; a network of advisors, investors, future and former entrepreneurial talent. It’s also way more fun doing this with people you respect and care about.
Parting Thoughts
Whether you’re an entrepreneur, an angel investor, a fund manager or an aspiring venture studio, doesn’t matter — we’re all playing in the same field, and fortunately or unfortunately, doing these things well matters while we build the foundation to generate “knock it out of the park” outcomes.
More to come from the constant running track in my head…but for now, thank you to all the people I’ve encountered that help me challenge my way of thinking.
