On funding, self-awareness and high performing teams: A Conversation with Dan Fleming, Investment Manager at Folklore Ventures
Telescope Ventures had the pleasure of sitting down with Dan Fleming, Investment Manager at Folklore Ventures. We chat about his journey into startups, self-awareness in founders, and building high-performing teams.
Can you tell us a bit about your journey and how that led to venture capital?
I followed a pretty stock standard path off the back of earning an economics degree from UNSW, which saw me join PwC as a consultant. PwC was the reality but not the dream; I wanted to play professional rugby for the Wallabies. In the end, that didn’t happen, but I was fortunate to get the opportunity to play in the US, in Denver, Colorado and later moved to Hong Kong to play for Kowloon Rugby Club.
When I returned to Australia, I was keen to get into early-stage startups and joined a pre-seed IoT company called Ragtagd. I was a founding team member and worked as a generalist across all parts of the business. After some time there, I made my way to LegalVision to work in their growth operations team, driving strategic and operational projects across the business.
That later brought me to Folklore Ventures and becoming an investor.
Can you tell us more about Folklore and your role?
Folklore is a Sydney-based venture capital firm with a first cheque to forever mandate, meaning we invest early (Pre-seed, Seed and Series A) and for the long term. As an investment manager, I work alongside our partners to back visionary founders from Australia and New Zealand — wherever they are in the world — who are creating the next generation of great technology companies.
What are you most excited about for Folklore? What are you most excited about in 2021?
At the start of the year, we rebranded from Tempus Partners to Folklore to better align our external identity with our vision and ambition as long-term partners to founders. It’s been exciting to witness this new chapter in the firm’s story roll out.
On a personal level, I’m looking to kickstart my content journey. I’m trying to be more active across different channels, including Twitter, and to share my learnings and insights. If you’re interested in following along, find me on Twitter at @doingthingsdan.
As an investor, what’s a common myth about your role?
The biggest myth is that you spend all your day hanging out with founders, learning about interesting problems, and creative ways to solve those problems. Sadly, that’s not every single minute of every day. There’s actually a ton of admin and compliance that’s involved in running a venture capital firm — as well as everything from capital raising to team building.
How do you identify great founders?
There are many attributes to consider but for me it comes down to alignment around why they are solving this problem, why they are best placed to do so, what is the scale of their vision and self-awareness. As a starting point, we lean into founders to get a better feel for their ‘why’. Why should we back this person? Why are they uniquely placed to solve this problem? Do they have first-hand experience or domain expertise?
We then look towards how they’re thinking about solving a problem and their vision. Does this founder have long-term ambition? We’re not interested in a quick exit; we’re after visionaries who want to build multi-generational value and sustainable businesses.
The third point is self-awareness. It’s important to us that founders are aware of what they’re good at, where their weaknesses lie, and how they can add value.
How do you identify a self-aware founder?
People with higher degrees of self-awareness are pretty forward with calling out their strengths and weaknesses. But this isn’t always obvious and instead becomes more apparent over the course of many conversations. We try to peel back the layers to learn more about the founder. Does the person have intellectual humility to share what they’re solving and how they’re thinking about it? Can they identify certain risks, blind spots or pain points they need to consider? Can they adapt to that complexity? Even more so, can they systematically work through opportunities and jump on them?
What advice would you give to early-stage founders seeking funding?
I strongly believe that founders should meet as many of the right investors as possible. The ‘right investors’ meaning investors that align with your specific stage and sector. Do your research on who you would like to meet. You’re entering a potential 10-year relationship with your investors, particularly if you are an early-stage startup, so it’s critical that you find the right people who you want on your team.
Coming back to my point around self-awareness, I’d also add that any fundraising conversation is not about sales. Be as open and transparent as possible and don’t frame your story as a sales pitch. It should be a more holistic conversation around what you’re building and why.
As a founder, how would one make these connections?
One of the beautiful attributes of the Aussie startup community is that it’s accessible and that people want to help. There’s an attitude of paying it forward where people want to help the next generation of founders and operators to continue building the ecosystem. I think you’ll find most investors, founders and operators are willing to have a conversation, so I’d recommend reaching out on LinkedIn or via DMs on Twitter.
But warm or cold introductions, it doesn’t really matter. Building that connection early is what matters.
Do you have a favourite book or any resources you would like to share?
The Man Who Solved the Market : How Jim Simons Launched the Quant Revolution. Highly recommend it. It’s an interesting view into the emergence of quantitative trading, the challenges of building high performing teams and the importance of timing and opportunity.
I’m really into YouTube channels at the moment. Two favourites are Garry Tan, the founder of Initialized Capital, and The Quest with Justin Kan. Justin has a fascinating perspective, particularly around his experience going from the success of Twitch to Atrium’s ‘failure’ — depending on how you frame it.
What advice would you give to your younger self?
As a starting point, I wish I had invested in crypto when I was at uni!
Be open to the opportunities, you never know what may arise off the back of that. It’s cliché but the beauty of that life stage is that it’s a low risk, high opportunity time. As opportunities present themselves, dive into them. You can always realign if needed. Finally, meet as many people as you possibly can, gain as many different opinions and perspectives as possible.
What is an area you wish you could better understand?
I’d love to spend a focused amount of time understanding organisational psychology and the cultures of building high-performing teams. Especially as an early-stage investor, it’s an insanely critical part of the company and team’s success. Aside from a few signals, culture is largely unquantifiable and challenging to predict as a company changes and scales. I’m curious to pinpoint the behaviours that senior management and teams adopt, what values they align to and how they think about this flexibly over time. Ultimately, if you can’t hire and retain top-performing talent, success will be challenging.
Who is someone you admire?
Listening to The Quest with Justin Kan, he had an interesting interview with a founder called Laura Behrens Wu. She’s the founder of a company called Shippo. I thought her story was phenomenal. It was a super honest and transparent conversation about all the challenges of building and scaling a company. It comes back to that point around building culture — how can you make sure you have the right team at zero to 20 employees, then 20 to 100 employees and so on? She was brutally honest about her struggles scaling teams, wanting to be loyal to early employees but recognising that a talent shift needed to happen to allow the business to reach its next level.
How do you deal with uncertainty?
I think that by working in an early-stage company or venture, you need to relish in uncertainty to succeed. We have an internal heuristic at Folklore which is ‘eyes wide open not fingers crossed’. It’s about getting familiar with uncertainty and identifying what we do and do not know. Ultimately, we can’t predict the future, but we want to be clear on any existing uncertainties and assumptions and continuously reassess these uncertainties over time.
