Learning from 20VC interviews, round 2
Highlights:
- GPs tend to fund people who look or act like them, and build investment theses to support that inclination
- valuation should be constricted with seed stage
- hardware is just a wedge into data
Greg Bettinelli from Upfront Ventures
Started angel investing after acquisition of a company he was early in
Ended up building an incubator with fellow eBay employees
Focuses on grit and non-traditional background
- they notice different opportunities than traditional folks
More reactive to quality people/team now than to a quality idea
Urbanization of the consumer
- focus on value
- tech is only a part of it
We are all changing the way we buy
- consumers are more loyal when earned
Big Q: What unfair advantage does the founding team have?
Most creative people in the world live in LA
Smart capital is always looking for great businesses wherever they are
He likes to read…
http://fortune.com/gettermsheet/
Steve Schlafman from RRE Ventures
Remember: Seed is very different than Series A
- hustle and moving fast
- not a lot of data (more about gut)
- get to know people + pattern recognition
- look for founders who have a feeling that something’s there
- valuation across a tighter band
Things change with Series A
- build relationships and the chance to watch a team’s evolution
- tracking the entire market
- math really matters because check size will vary a lot more across investors
- the wrong math (esp. valuation) can hurt the company by making B harder
- need to explain that tension tension to the entrepreneur
Job as an investor is to choose good people
- don’t be a control freak after investment
Venture Capital needs to evolve to be collaborative
https://stratechery.com/
https://www.amazon.co.uk/Who-Method-Hiring-Geoff-Smart/dp/0345504194/ref=sr_1_1
https://www.amazon.co.uk/Work-Rules-Insights-Inside-Transform/dp/1444792385/ref=sr_1_2
Nick Weaver from Eero
Came from Menlo Ventures, and McKinsey before that, and originally created the StartX program at Stanford
Great team, product, and timing isn’t enough
- it can’t take off without a market
What are the gaps in product solutions?
What do I see that others miss?
Looked at margin needed to support
- marketing
- R&D
- distribution
What parts should we own in house?
What customer feedback do we need to react quickly to?
Still spends 50% of the time hiring
Pouring all resources into one product
- focus on great customer experience
Barriers to entry are greater for hardware
- easy to announce, but hard to ship
“Hardware is hard”
- different teams @ different cadences
- sequence and timing is huge
Eero is three things: a company, a product, and an investment opportunity
How are you going to triple the team?
Who can handle this scaling?
Ryan Sarver from Redpoint Ventures
Helped grow Twitter from 30 to 3,000
Jumped to Redpoint as an EIR
Origins are more fulfilling, but harder
- Investing is a way to get into a bunch of company’s foundational stage
- Organizational redesign is a constant tension that needs to be managed
Hustle drives success
- entrepreneurs need to know their values
- their ventures requires a lot of hours but there isn’t a lot of feedback
What’s the value of an EIR?
- structure to a day
- easy access to people for feedback
- inspiration from exposure to tech
AI as a platform
- working with Playground on connected hardware and its alignment with AI
- monopolistic forces because of the huge requirements for data and network effects
- how can we create proprietary data sets?
- hardware is a wedge into data
Apple needed to open up Siri
- good call to make it a platform
