We’re incorporating new formats to best tell the stories from our investors, portfolio companies, and the fantastic entrepreneurs who started them. Today, we’re publishing our first “10 Questions with…” Q&A with CRV general partner, Rafael Corrales. We encourage you to get to know the company we keep!
Q: Tell us how and why you became an investor.
One of my now co-workers, George Zachary, was the first investor in LearnBoost, the company I co-founded while in grad school and ran as CEO. We coined the term “party round” in that process, so there was this firsthand look at many different investors, as there were 16 different angels and VC’s on our cap table.
The journey from there wasn’t quite so straightforward. During the three years leading up to acquisition, we pivoted into a wildly different space, but CRV was there for us — one thing I remember is George getting together with me on a Sunday morning and having me over to his house. No other investor ever did that.
Anyways, six months after that pivot, WordPress acquired us for what was the largest of their first twelve acquisitions. So while it was a three-year start-to-finish journey, we “lived many lives” through that company. And from there I wanted to join the person who took a chance on me.
Q: What past experiences, if any, led you to a career in venture capital?
The most direct work experience has to be the above background of starting a venture-backed company at 23 and selling it at 26.
The other side of it would be, during that founder experience, occasionally advising companies as the very first original advisor, like I did with Instacart and Vurb. That’s when I started realizing I had a knack for finding great, unknown founders before anyone else — and more importantly, for believing in founders before anyone else. From there, through hard work and lots of luck, I was fortunate to then have those founders want me involved directly in their company. I suppose that’s when I figured that might be a good leading indicator to become a strong early-stage, first check type of investor who great founders would aim to call first — about anything!
Q: Why did you join CRV? What industries do you invest in?
I joined CRV because I care most about working with people I like — in the process of deciding which firm to join, I had several offers, and actually they all had better titles and/or initial roles; however, it was pretty clear that if I was going to be true to myself, and focus on people, the answer at that point was going to be CRV even if there was a big short term sacrifice to do so.
I also felt back when I joined in 2013 that the team here wanted to go from good to great. CRV is a strong firm, but the general sentiment is to get better everyday.
Early on, I struggled in terms of defining what industries I invest in. Part of this was youth, part of this was that I was fortunate to have early success in consumer facing companies, and so I was initially focused on “all things consumer” — however, I’ve since been fortunate to also have early success in enterprise companies (for example, I was the first check in Clearbit and then another enterprise company in which I was the first check, that is in stealth mode, is by many measures one of the fastest growing companies we’ve seen). So that made me realize that maybe I could keep finding 100x potential companies in varied industries, both emerging and established.
That leads us to today — I am a generalist and I’ve embraced that. Now, in some sense, that makes it hard to know what to send my way, but the reality is that I am simply interested in finding great people based in the Bay Area, specifically San Francisco, where the highest concentration of outperforming startups in consumer and in enterprise are based — this is backed by any kind of data you might find on public or private unicorns in the past ten years, and I bet if you surveyed any investor to make a list of “future unicorns” you’d see the SF effect show up as well. I’m simply betting that SF is the present and the near future for interesting startups and that I can keep finding interesting opportunities before anyone else.
Q: Any memorable moments and/or career milestones you’re most proud of? Why?
At the time I didn’t care for it much, but looking back, the day my company was bought by WordPress is special from a career perspective. It wasn’t memorable in the traditional sense, though — I just went home from work that day and told my two roommates at the time that my company had been bought. I remember they were surprised I hadn’t said anything along the way. Anyways, that night we celebrated by having a bottle of champagne, ordering a pizza, and watching Archer re-runs on Netflix; I’m not a fancy guy.
Part of why I acted that way is at the time I viewed an acquisition of any size as a genuine failure to build an enduring company; as I get older, I’ve taken a longer term and more positive view on it because our technology is now powering large facets of WordPress and our open source libraries like Socket.io and Express continue to be used by tens of thousands of developers and companies worldwide. We really built up the Node.JS ecosystem from the ground up and that’s had a real impact.
Q: What is your work style? Anything unique to your daily routine?
My work style is one that is intuitive, open-minded and going with the flow.
I have a people/heuristic-based approach to investing, as opposed to thematic. I also deliberately “go deep” on networks as opposed to “go broad” on meetings. It works extremely well for me.
As to my daily routine, I deliberately stay as disconnected as possible — if it was up to me, we wouldn’t have cell phones, Slack, or any social media. As it were, I have been off all social media deliberately and have found my productivity and original thinking going through the roof.
The way I see it is if I’m reading the same “stuff” as everyone else, I’ll have many of the same ideas as everyone else; you can’t outperform the crowd if you’re becoming the crowd.
Instead, I tend to read research papers, wonky forums that are overlooked, books that typically aren’t bestsellers, and vertically-focused newsletters.
Q: In one word, how would you describe yourself?
Decisive.
Q: What hobbies do you have? What do you love to do when you’re not working?
I read all the time — at least a book a week — and I like to paint for fun. I’ve deliberately not taken any lessons because I want to keep a beginner’s mind.
I enjoy taking long walks through San Francisco. I used to play many different sports, but after my fourteenth shoulder dislocation I stopped competing. Now I just get my kicks from walking through San Francisco.
Q: Who is or has been your mentor, role model or inspiration? Why?
It’s definitely my parents. I was born in Venezuela, but my parents moved our family to the United States when I was 6 months old. They gave up everything that was familiar in the hope, but not certainty, of something better. It’s the classic American Dream story where we all soon became proud US citizens and my dad worked his way up at companies like IBM. They sacrificed while here by doing things like putting us in the best schools. Any success I have is primarily because my parents put me in a position to succeed.
Q: What characteristics do you look for in a startup? And in an entrepreneur?
I use a set of heuristics that appear to be working well, but I’ve since added one that is the ultimate heuristic and I feel worth sharing. The heuristic is this: do I genuinely like the person across the table? In other words, do we really get along?
For example, take my seed investment in Blockchain. At the time that I was looking at Blockchain’s seed round, their chief competitor Coinbase had raised from Fred Wilson and they were wrapping up their next round financing with A16Z — good social proof, and I think that alone would have scared other investors away from Blockchain. Then Xapo raised from Benchmark, and Circle raised from General Catalyst, and BitGo raised from Redpoint, and all of a sudden it looked like it was going to be anywhere from a tough battle to game over for Blockchain when it came to the wallet space.
I think every firm felt they had to have a play in the space, though perhaps some of them didn’t actually understand the market dynamics! So in learning about the space, I realized that Blockchain actually had several proprietary and fundamental advantages over all the competition at the time — it led to this feeling that there was a big, almost complete misunderstanding in the market. At least, that’s what my set of heuristics was telling me. That or I felt I was taking crazy pills. But the heuristic that really put me over the top was spending the time with the team, especially Peter, which made me realize that the company was full of special people — and people I wanted to work with, no matter what.
Even though it was controversial at the time, and many people outside CRV didn’t understand the investment or even criticized me for it, it was actually pretty easy for me to make the investment. I had a unique point of view, my heuristics were firing on all cylinders, and I loved the team.
Fast forward a few years from that investment — while we’ll see what happens in the bitcoin and general alt-coin space, for sure Blockchain is now the leading bitcoin company by far, with well over 11M wallets, and most of the competition have shut down or pivoted. Just as importantly is that I’m also enjoying every single day that I get to work with Peter.
Q: What’s one piece of advice you would give someone seeking an investor?
I did this myself as a founder, so I hope it resonates to whoever reads this, but the best advice is to push the business so far along that investors are begging to get into your round.
In other words, things like selling product before it even exists, recruiting a great team that is willing to work for below market or zero salary, and so forth.
What that does is create the reality of the train leaving the station and when you do that, you’ll have investors running to jump onboard.
