5 Things I Need to See Before Making a VC Investment, with Chris Cunningham
“God forbid if the CEO had to step down or got hit by a bus could I step in and run the company.”
Chris is the Chief Revenue Officer at Unacast, the world’s largest network of beacon and proximity data, connecting the physical world to the digital for online retargeting and attribution. Unacast is a Norwegian startup that recently raised $5M in series A funding. Chris is an active tech start up investor and founder of C2 Ventures, a privately-held investment firm with a focus on consumer, data and financial techs that provides seed capital to early stage digital media companies. C2 and Chris’s limited partnership with Techstars and Bowery Capital include 13 current investments, one of which — Arbor.io — was recently acquired by LiveRamp. Chris has been named one of the “Most Important People in Mobile Advertising” by Business Insider, as well as being an Ernst & Young Entrepreneur of the Year Finalist 2 years in a row. He’s been a featured speaker at International CES, Cannes Lions, IAB’s Annual Leadership Meeting, dmexco, and f.ounders. He is a contributor to CNBC and Bloomberg TV via on-screen appearances, and is former co-chair of the IAB Social Media committee and Native Advertising Task Force.
What is your “backstory”?
Chris Cunningham: Serial entrepreneur from the tech and advertising world who has experienced all facets of building companies that scale, introducing new products into market and team building. Pioneered ad products centered around widgets, apps, and location data. Took those experiences and started C2 Ventures understanding first time founders need real time in the trenches support of their business. The core goal of C2V is close the gap between founders and VC’s to avoid classic start up mistakes.
Can you share a story of your most successful Angel or VC funding? What was its lesson?
Chris: I was the first investor and only advisor into Arbor a data company driving net new revenue for apps and publishers leveraging used data assets. I worked very closely with the founders for more than a year leveraging my network to fast track their commercial efforts. Arbor sold for over $150MM to Acxiom two years later bringing a 30+X return to shareholders. I learned that there is no match for the power of top tech and the teams that support it. Arbor had a world class CTO out of Google and supporting team that build products and pipes which drove huge value in the publisher ecosystem.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
Chris: After having three exits in my first two years I had my first failure. Unlike the other 12+ companies I invested in in which I was in constant communication with the CEO had constant communication and the CEO wanted advice and support I invested in a founder who did just the opposite. Did not share with me or other investors, tried to do everything himself and when it came down to raising more money he made the classic mistake of only having one option on the table vs multiple and that crushed us in the end as the potential investor pulled-out and now they are on life support.
Which person or which company do you most admire and why?
Chris: Elon Musk. Yes he is an obvious choice as far as star power but he is solving two very complex problems at the same time in auto and space. I appreciate the fact he does this in parallel and blows up the perception that people can only do one thing well. Founders invest, investors start companies, people advise the more you see and do the better you become and Elon is the rule. I also love that he is always first to make the right call with his customers when things go off the rails like offering extended power for tesla owners post the hurricane.
How have you used your success to bring goodness to the world?
Chris: I love this question and in short C2 Ventures along with Unacast have been the best things that have happened to me career-wise as I’m allowed and asked to give back. I’ve been told countless times by start-ups Iinvest in, advise or just friends with I had a positive impact on their business and there is no better feeling.
As you get older I think it’s your responsibility to give back to the ecosystem that gave you an opportunity and to the next crop of founders who can avoid classic pitfalls if you just spend the time with them, listen, ask questions and truly invest in their success.
I give time to anyone that wants it no matter where I met them in my personal or professional life. People go through ups-and-downs and that’s life, but supporting one’s low is a gift.
What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
The C2 Ventures formula is as follows:
1) Does it hit my thesis which is mobile first: Consumer Tech or Data.
2) Is the founder that 1% type that has the hit, how do I feel within 5 mins of meeting them. Is there chemistry. In addition are the founders tech savvy, I think this is a massive advantage.
3) Can I provide instant value through my network and relationships.
4) Do I clearly understand the space and the opportunity, does the pitch come easy, can I digest it quickly
5) God forbid if the CEO had to step down or got hit by a bus could I step in and run the company.
1) Does it hit my thesis which is Mobile first Consumer Tech or Data. You can’t invest unless you have a thesis you understand and are passionate about. You need focus and can’t invest in everything. On the flip-side, if someone brings me an esports deal, drone company or something else, I instantly pass because while I might think it’s going to be huge and successful, I can’t support it the way I can of those in my thesis.
2) The Founder is everything! That’s almost 75 percent of the call. I know the founder has the it within 5 mins of meeting him/her. They have to be willing to run through burning buildings to do what it takes and evolve/pivot their business which will naturally happen along the journey. I met the founder of Zenrez at SXSW four years ago and decided on the spot he was special. Fast forward today and the company is growing fast. I’ve participated in all his rounds and have an active advisory position.
3) Part of the Arbor success story I mentioned earlier was the speed of which they could go to market through my network and relationships. In this game speed is everything and so is getting to the right person.
4) The deals I invest in I understand with one go, no slides or follow ups. I had this one company in the AI space that I had to have four calls with and I still didn’t get it. I had to shut down the conversation right away.
I have been blessed with the opportunity to interview and be in touch with some of the biggest names in Business, VC funding, Sports, and Entertainment. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why?
Chris: I would love to have breakfast with Richard Brandson. He strikes me as someone I could chat with for hours and also learn a great deal from given he has had so much experience launching new ventures against the odds and not caring what the public eye thinks. The reason its Richard is he has defied so many odds over his years of launching Virgin and takes so much risk to get there. Almost dying risk! Taking risk, not caring about adversity or being told he can’t do that are some of the biggest attributes of being a winning founder and Richard exemplifies that.