My First Six Months as a VC: Investments and Lessons Learned

During my first six months on the job, the majority of my time has been spent sourcing new investment opportunities for our fund. To date, we have invested in four startups that I sourced for Deep Fork. Below is a snapshot that provides some background on these investments followed by some takeaways from these experiences.

      Bowery.io (NYC), RebelMail (NYC / Washington, DC), and 2 unannounced (NYC and SF)

      3 enterprise (all in NYC); 1 consumer (SF)

      Led 1 funding round

      2 investments came via introductions by friends who were consulting / advising the companies

 

      1 investment came from having known a co-founder for an extended period of time

      1 investment came from a chance encounter with someone (a founder) building a product to which I became addicted a couple weeks before joining Deep Fork

Here is a sampling of my key takeaways (obvious and not) from these experiences that I have used and will continue to use as a guide going forward:

Relationships matter—you never know where your next intro, investment opportunity, etc. is going to come from. I do my best to keep relationships fresh / healthy, and, provided my schedule allows for it, I take nearly every meeting because it’s a chance to learn something new and expand my and our fund’s reach. Building these relationships and being genuinely helpful before, during, and after a company’s fundraising process (even if we don’t invest) is also of critical importance. At the the seed stage, I’ve found the “before” and “during” stages are a little harder because of how quickly many processes take place. However, in one instance (which I’ll detail a little more tomorrow), we were able to successfully win an investment because we had formed a tight bond with the founders over the course of a couple months through several meetings and dozens of hours spent in the product (along with a corresponding amount of feedback).

Related to my comments above, a lesson I learned from my dad, and one I have held closely during my short “career” (having graduated from college in 2009), is that people like doing business with people they like. It’s often hard to build a connection and figure this “chemistry” out in a short meeting or initial phone call with an entrepreneur, but it’s something I go back to when evaluating any investment. And I know entrepreneurs do the same thing when evaluating prospective investors. “Can we work together over the next 5 to 10 years?” Building and maintaining a good rapport with founders (regardless of whether we invest) has already proved to be crucial in my first six months on the job, entrepreneurs whom I have passed on have subsequently introduced me to multiple other companies.

I put an extreme amount of emphasis on founder-product fit (i.e. is this the “right” person / are these the “right” people to build this product / company?). Having spent time at Gumroad and Wanelo, I’ve seen firsthand how valuable it is to a startup’s chances for success when there is an almost symbiotic relationship between the founder and the product that is being built. In the case of Bowery, it’s a tool for developers built by developers who faced this problem themselves. Joe and Trever at RebelMail have uniquely combined two products they had built separately to create something incredibly powerful. For one unannounced investment, the founders are combining deep industry expertise with relevant product experience, and in the other unannounced one, the product feels like it has literally been borne out of the co-founders — it’s eerie. Ultimately, this feeling, particularly for consumer products, is subjective, but the founder should be inextricably linked to the product.

I have a ton more to learn and anticipate always learning something new from founders and fellow investors as my career progresses, but I’m excited to put some of these initial lessons to the test as a revisable guide going forward.