CHOOSING A NAME FOR OUR FUND: HOW WE AVOIDED CHICKEN AND RICE
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Cory and I spent a good amount of time choosing a name for our fund. In fact, it was our first point of contention since deciding to partner together and served as a good test of our co-founder dynamic.
When it came to naming the fund, or for naming any company for that matter, we decided there were 3 possible routes:
- Descriptive: a name that communicates what we do, who we are or what our value proposition is. (Example: First Round Capital)
- Meaningful: a name that might not mean much to the outside world on the surface but that has an intricate story behind it that relates to our mission. (Example: Homebrew)
- A word that sounds cool or prestigious but has no meaning: a name that means nothing to anyone for now, but that either gives a first impression of “those guys sound like they do things differently” or conversely “those guys sound like they have been around for a long time doing this”. (Example of the latter type of name: any name generated by the Fund Name Generator below)
Over a few week period Cory and I narrowed down our list of prospective names to a few finalists, at which point we were at a standstill. However, since we both prefer to make data-driven decisions and recognized that our target audience was early stage founders (as opposed to our prospective LPs who didn’t seem to care what our fund’s name was), we decided to send out a poll to a small, diverse group of founders in the US and Israel and to consider their feedback.
Unfortunately, the poll results didn’t paint a clear picture. The names that were the most liked, were also the names that were the most disliked. The names that were eh, were eh all around. Our options were to go with a polarizing name to the delight of some and dismay of others, or with a neutral name to the indifference of all.
These results highlighted one of the important limitations of the wisdom of crowds when it comes to innovation and design. Jason Cohen characterized this problem well in a post advising startups to ignore the wisdom of crowds. Cohen draws a clever parallel to planning a holiday meal. Rather than cook a masterful innovative dish, if you try to appeal to all of the individual tastes and preferences of the crowd — taking into consideration your uncle’s garlic allergy, cousin’s dislike of spicy food, sister’s non-red meat diet, nephew’s disdain for anything green — you will realize that there’s only one way to please everyone: cook something boring and safe, like plain chicken and rice. In your attempt to appease everyone, you remove all of the interesting elements and excite no one.
Since Cory and I don’t like boring and safe, we decided not to choose the name with the highest median or average score but to go with the name that had the highest number of first place rankings, despite the fact that it also received a number of highly negative scores. And so we became Ground Up Ventures.
What does Ground Up Ventures mean to us? Ground Up fits in both the descriptive and meaningful categories of names:
- Descriptive: Quite literally, we help entrepreneurs build their companies from the ground up. When an entrepreneur is wondering who might be crazy enough to back them pre product-market fit, we want them to think of us. We don’t just get in on the ground floor and help the founders get their ideas off the ground, we continue to support our companies with financial and operational support as they scale up.
- Meaningful: The name reflects our investment philosophy and is a constant reminder of the true nature of our business. The “ground” represents the defined lower limit of potential outcomes: at worst, a company fails and we lose 1x our money. It is a built in stop-loss at 100%, giving us full insight into how much is at stake with each investment. “Up”, on the other hand, is a boundless vector. Up knows no limits in its ability to scale to new heights.
We invest in the idea or experimentation phase of a company’s life, well before the company has figured everything out. As a fund that embraces this kind of real venture risk, the question we ask ourselves is not what will happen if the company fails, but what will happen if the company succeeds.
At the end of the day the most you can do is hope that a name resonates with your target audience and embrace the fact that there will be people who hate it. In our case, some critics have been quick to point out that the name makes them think of ground up beef. Thanks to this interpretation, Cory and I are toying with an idea for a new tradition: sending ground up hamburger meat to a company when we close an investment in them…one thing we know for sure — we won’t be sending chicken and rice.