Vote Early, Vote Often

Below is the ‘Tip of the Week’ from 97. Student-Focused VC Funds, Part 2 (Peter Boyce II)

With a tip title like this, you may expect that I’ll try to say something clever about the unprecedented political race for the US presidency. But no, this is not a show about politics even if I’m borrowing a political phrase. The reason for the title relates to these Student-Focused initiatives and long-term value they may drive.

There are a few things that we’ve heard over and over again on the show. An investor who identifies a phenomenal team, working on the wrong problem. And in many of these cases, the investor chooses to pass. But, others have talked about how they’ve made small bets early, not on the idea, but on the people. Others have become advisers for these startups, helping them fail fast or prove them wrong. In each of these cases, the investors see some remarkable ingredients for success. Maybe the entire recipe doesn’t make sense, but the key elements, namely the founding team, causes the investor to vote with their time or their money.

Another situation we often hear about on the show has to do with the strength of relationships. Some investors are completely passive, providing no value beyond easy money. They throw $100k in, to top off a round, and the startup never hears from them again. Other investors are very hands-on, as we discussed in episodes 55 and 56 with John Greathouse from Rincon Venture Partners. This group gets very involved, very early and builds a trusting relationship with the entrepreneur. Both totally different strategies with their own merit.

But, as we can see from today’s discussion, there is tremendous value in making early bets on great people. Peter votes with his time and with money. He gets involved, mentoring and coaching the student leadership team and the startups they’re investing in. He builds relationships, not transactional in nature, rather those that can only be forged through good times and bad.

If one of these startups achieves success, what investors are they going to want to work with at Series A? If the startup fails, but the founding team learns from it and goes to build something remarkable,; who do you think they call first? My bet is on Peter Boyce and the team at General Catalyst.

With entrepreneurs, Rough Draft votes early and votes often. They embed themselves into the founder’s story, from the beginning. Peter also talked about startups that they review at General Catalyst. Those that are much further along, where many more chapters have been written. But for those funded through the student fund, Rough Draft isn’t just reading the early chapters, they are helping to write them.