This Haitian Entrepreneur’s Tough Upbringing Is Driving the Investment Thesis Behind His New VC Fund
Dan Rossignol was born into poverty. Now, he is ready to invest in people that are underestimated, like he was.
Daniel Rossignol is no stranger to adversity. He was born in Haiti, the poorest country in the Western Hemisphere.
His mother died of childbirth and because he had older siblings, there wasn’t a lot of food to go around.
At a young age, he found himself practically on his death bed due to malnourishment — his hair had turned red and he had been reduced to skin and bones.
Luckily, a church took pity on him and literally pumped him full of peanut butter to return him to normal health, which is crucial for kids that hope to get adopted.
A family in Central Maine eventually took him in, and while the worst might have been behind him, he still had a long way to go:
There was growing up in the mostly white Central Maine, struggling to land an internship in venture capital after college, raising a family at a young age and overcoming the barriers that come with being a black man in the predominantly white Silicon Valley.
Now, a successful serial entrepreneur with multiple exits, and on the cusp of launching his own micro fund called Octane Venture Labs, Rossignol is ready to invest in entrepreneurs who, like him, may have had the odds stacked against them.
“There is this idea of being underestimated,” he told me during an interview. “We look for very underestimated people. It’s not a race thing; it's not a religion thing and it’s not a political view. Is it hard for you to get the capital that you think you need and do you think there are reasons for why it is hard? If I think those reasons are unjustifiable then I want to help you.”
The Valley Can Be A Tough Place
In college, Rossignol met a girl that he would eventually chase to Toronto.
When the two married, he was left in the situation of starting a small family in his early 20s, and in desperate need of a job.
He applied for a venture capital internship at Bright Spark Ventures. He didn’t get it. But no was not an option. Rossignol reached out to the managing partner and said, “Listen, I need this.”
The company assigned him to one of their portfolio companies called iStopOver. You may have never heard of it, but it was one of Airbnb’s first competitors.
After three months, Bright Spark offered Rossignol a job. But that would be too easy —no, the Dalhousie University alumni wanted to build something.
He left Bright Spark and joined the IT startup Geminare early in its lifecycle.
When the company recognized that there was a great opportunity for international expansion in Latin America, Rossignol raised his hand without hesitation and jumped on a plane.
For the next few years, he worked in countries including Jamaica, Colombia, Costa Rica, and Honduras. Before he was 30, he had worked in six different countries.
As the company was building momentum with channel partners on the West Coast, Rossignol and the CEO of Geminare decided it was time to move out to California, specifically Silicon Valley.
The Valley is not exactly a welcoming place for a Haitian-American entrepreneur.
There’s tons of data regarding the lack of diversity in the valley, but here are a few recent data points to illustrate:
- A study released in May 2018 by the National Urban League revealed that at companies like Uber, Twitter, Google, and Facebook, fewer than 3 percent of tech workers identify as black.
- An analysis of 177 of the largest San Francisco Bay Area tech firms by Reveal from The Center for Investigative Reporting showed 10 large technology companies in Silicon Valley did not employ a single black woman in 2016. Three had no black employees at all. Six did not have a single female executive.
The data above was from studies conducted in 2018. So needless to say, when Rossignol was just getting started, the lack of diversity was even more evident than it is today.
“When you are black and you are in tech you often times get bucketed into specific roles like as the sales guy or the customer service guy. Some if it is forced on you,” he said. “But when you come in and you are the tech guy or the head of product, that sounds weird. There are not a lot of exits for black entrepreneurs, which makes it hard to be a black founder because there is this pattern recognition the valley looks for. I don’t believe in it but it exists.”
For instance, according to Rossignol, while venture capitalists say they are looking for startup founders that are willing to put it all on the line, he questions whether that is really true.
“They want to see that you went to an ivy league school and that you come from a family where if this all fails you can go back and still eat and pay for your rent,” he said, adding that the trend is completely ridiculous when you consider all of the unicorns started by immigrants. “VC’s, whether they will tell you or not, are looking for that. They want to make sure there are some fail-safes.”
Although it wasn’t easy when first starting out, Rossignol’s hard work and willingness to fail again and again would eventually pay dividends.
He has worked at or served as an advisor for 15 different companies, according to his LinkedIn profile.
Three of those, Rentlytics, iStopOver and AdsOnFeet, exited as a result of acquisitions.
Rossignol knew that after Rentlytics was acquired by RealPage (NASDQ: RP), he was probably done working a traditional job for a while, so the question became, what’s next?
Octane Venture Labs
Due to his previous exit at Rentlytics, Rossignol had many lucrative job opportunities he could have taken. But he wanted to spend more time with his family and also wanted to try something new.
He could have pursued the traditional VC route, but again not his style.
So, he decided to plunge into the difficult process or raising the first fund and giving back to the many entrepreneurs that are underestimated.
The first thing he did was make his home base in Providence, Rhode Island.
Providence is a growing startup hub, but if it sounds like a weird place to set up shop for a VC fund, that’s because it is.
The city is home to only a handful of traditional VC funds and perhaps the greatest source of frustration among entrepreneurs in Providence is the lack of traditional funding outlets within their ecosystem, leaving many left to bootstrap.
Rossignol does not deny that bootstrapping is becoming more effective but says it is still extremely difficult when you consider the cost of living in many startup hubs.
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Octane could raise up to $10 million by 2020. Initial commitments from limited partners are already coming out of Silicon Valley, San Diego, and Providence. The fund will be a technology first, sector agnostic venture firm.
Rossignol’s goal is to figure out why there is a gap between great funding opportunities and actual funding.
“When you see so much deal flow, that’s one thing, but when you see so much deal flow not getting the attention, that’s another thing,” he said. “I am trying to unpack why all the available talent is outweighing the available capital and it seemed to me it was just this underestimated reason.”
Venture capitalists are leveling up.
The traditional players are raising larger funds; there is more commitment to limited partners and the bigger funds are really trying to chase unicorns, making the rise of nano and micro VC funds more critical than ever before.
Ultimately, Rossignol is sick of hearing that 90 percent of startups fail. He argues that the number is skewed because the ecosystem is ignoring a ton of entrepreneurs.
Rossignol believes that if entrepreneurs had more access to capital, that ratio might go down to a 70/30 split.
“I want entrepreneurs to understand that I’m in it with them for the long haul,” he said. “I get their pain; I get how hard it is and I want them to get value. That’s what Octane is all about.”
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