Big congrats, Garry. I've been a lurking fan of yours for many years now and this day honestly feels like an inevitability, even though I know it's required a ton of effort largely invisible to me.
Clearly one unique value proposition of your fund is that sweet combination of check amount, time to close, and stage of investment. That's certainly appealing.
But I've learned over time that I care most for my fellow founders in the trenches. I love my people. And with your fund, the people involved – especially those in your portfolio – appears to be a huge draw.
I've had the privilege of interacting with at least a few founders of your portfolio companies and to a person they are all stellar. Fred of Rainforest and Brad and Matt of SendWithUs were all kind enough to come on our fledgling little podcast (thanks again!). And I first spoke to Jarrett of EasyPost as he dove into responding to my support emails; still wear my EasyPost t-shirt all the time!
Some questions that popped into my head while reading:
- One of YC's great strengths is your community of peers. How do you plan to create such a community within your portfolio?
- How strong a hand do you expect to have in guiding your investments? (Trying to get the mental model right of where you'd sit between an AngelList syndicate, a YC, or a full-service firm like a16z.)
- Do you expect to be amenable to alternative exits, for example distributions at some multiple, a la Indie.vc?
- Why are your checks typically in the $500K - $1M range? (Personally not sure my company would need that much capital, so I would like to be careful of being cash rich as much as cash poor.)
Hi Josh, thanks so much! I feel the same way - fellow founders are our peeps. Great questions.
Community is of course amazing to have, and very necessary. We've all been to those horrible mixers where everyone runs around talking about how they're KILLIN' IT. Those are huge wastes of time. It's always done through the little things - events, mixers, dinners where smart people hang out and know that they can trust each other and share what's really happening. YC has worked incredibly well because everyone knows that you can trust each other since if you violate that trust, you'll get kicked out of the community. It's something more people should do. Of course since we're later stage, the founders will be spending a lot more time with their teams than with each other.
We're probably in between YC and a16z. We're a smaller fund, so we can't afford as many operating partners and staff, but we'll be able to do a lot. My goal is to spend almost all of my time with the 20 or so companies we work with in a year, so it'll be more concentrated. That's what will be necessary to get companies from seed to Series A, across that dreaded funding gap.
We've always supported founders to make the right choice whether they want to sell, or not. In terms of alternative exits we haven't gotten there yet, because that model is pretty unproven but I really like what Bryce is doing and I really want it to work, because its clear there is a lot of stuff out there that should exist but can struggle to get capital.
Most seed rounds we see come together are between $1M and $3M these days, so that amount of capital lets us get our percentage ownership (which is necessary for portfolio construction) while also letting a good round happen with other good seed investors. Most folks want at least 18 months to 24 months of runway to get to a solid Series A or profitability, so a lot of these numbers work backwards from that.
Thanks again for your questions Josh! Hope we can be helpful to you down the road.
Thanks for the great answers here. This definitely provides a lot of context to how you're positioning the fund. Some of this was signaled by the round size, but certainly didn't want to assume any of that.
Really hopeful to see Bryce's model work, as well. Am keeping an eye out to see if your fund experiments with similar models.
Clearly one unique value proposition of your fund is that sweet combination of check amount, time to close, and stage of investment. That's certainly appealing.
But I've learned over time that I care most for my fellow founders in the trenches. I love my people. And with your fund, the people involved – especially those in your portfolio – appears to be a huge draw.
I've had the privilege of interacting with at least a few founders of your portfolio companies and to a person they are all stellar. Fred of Rainforest and Brad and Matt of SendWithUs were all kind enough to come on our fledgling little podcast (thanks again!). And I first spoke to Jarrett of EasyPost as he dove into responding to my support emails; still wear my EasyPost t-shirt all the time!
Some questions that popped into my head while reading:
- One of YC's great strengths is your community of peers. How do you plan to create such a community within your portfolio?
- How strong a hand do you expect to have in guiding your investments? (Trying to get the mental model right of where you'd sit between an AngelList syndicate, a YC, or a full-service firm like a16z.)
- Do you expect to be amenable to alternative exits, for example distributions at some multiple, a la Indie.vc?
- Why are your checks typically in the $500K - $1M range? (Personally not sure my company would need that much capital, so I would like to be careful of being cash rich as much as cash poor.)