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Venture Capital Superheroes

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CB Insights just included ffVC in 13 Micro VCs We’re Watching, along with a (highly inaccurate) superhero graphic.  CB Insights has become a very influential data source in the industry.  In fact, I recently had dinner with a well-known VC who said that he was surprised to see the CB Insights database includes investments his firm has made in stealth companies which haven’t even been announced yet. He said he had no idea how CB Insights got that data.  I pinged CEO Anand Sanwal, who credited it to their strategy of setting up drones outside VC offices.

Below are three questions posed by CB Insights along with my responses:

What is your thesis & what gets you excited?

“We think that our job is to invest in the growth areas of 2018-2020, and we don’t know in advance what those are. So we keep our doors open to the widest possible array of investments; we’re agnostic to industry and location.”

How has the changing investment climate changed your process?

“Our process hasn’t changed; if anything we remain even more focused on investing at the seed stage, typically at valuations below $5m pre-money. We do have very significant follow-on capital to invest in Series A and later rounds as companies mature, at or above our pro rata.”

What worries you in tech?

“It’s a great time to start a technology company right now; the cost of starting a company has trended down to the cost of being unemployed. Over 80% of the adult population globally will have smartphones by 2020, which creates massive opportunity to disrupt established industries. The bad news is that we see a lot of “wantrepreneurs” who suck up some of the available VC dollars, VC bandwidth, and technical talent. The good news is that we also see more exceptional entrepreneurs addressing big opportunities.” 

That said, the superhero graphic perpetuates an optical illusion which I see a lot of folks make: it personifies a complex institution.  ffVC is not built on any one superhero, but a team; we aspire to be the Fantastic Five, not a solo Superman.  Similarly, the press lavishes attentions on the CEOs of successful startups, but none of them would be anything without the team that they recruited and manage.  Everyone talks about Tim Cook now, only because Steve Jobs has moved on…but Steve Jobs wouldn’t be Steve Jobs without Tim Cook, Jonathan Ive, and many others you and I haven’t heard of.  Fred Wilson wrote about a similar dynamic at Union Square Ventures. 

So I’m flattered to be cartoonified, but the right cartoon would show ffVC’s entire two-dozen person team (and we’re hiring now).

 

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