First of all, this isn’t Shark Tank or Entrepreneur Elevator Pitch baby. This is real.
These are human beings sacrificing their time and energy for this dream. Whatever the product is, whatever the idea is, the fact that they are even pushing and building is one of the most inspiring actions there are.
A brief origin story
Maybe it’s because I’ve been there. I started my first venture all the way back in early high school. Before the golden age of technology but we did have printers and MS paint.
I started a small concert promoting business. I negotiated terms with a handful of local spaces that turned into ‘venues’ to host these shows.
I contracted folks to run the sound. Negotiated with local and semi-local bands to come and play weeks and sometimes months in advance.
I would create small flyers and pass them out by hand at school. I would enlist kids at other high schools to do the same thing and give them free admission to the show for doing so.
The first show I did all on my own was at a bowling called Eastland Lanes in Essexville, MI. I still drive by it every once in a while but it’s now a vacant ghost of my past.
350 kids showed up. The venue was fucking pissed. They did not expect that. They thought I’d get maybe 50-75 kids total.
We hit occupancy and I had to pray that the fire marshal didn’t show up because I wasn’t going to kick any one out. I was going to let it ride.
This was before smartphones so most kids actually stood and watched the bands, they sang to their songs if they knew them, and they talked with each other. Some had disposable cameras or polaroids but that was the extent.
This was my first taste of entrepreneurship. I was hooked. I wanted more.
Empathy is a superpower
I say this kindly and sincerely. I’ve been where you are. I find it incredibly hard to connect deeply with someone that doesn’t have the same emotional experience as I do.
There are really smart people that run amazing and successful companies and I would venture to guess that most of them have had their ass handed to them from time to time… I can almost guarantee it if they have been in business for over 2 or 3 years.
The experience you gain becomes lodged into your blood and into your bones. This is not something you can learn from a book or from a YouTube lesson. This is a lived experience that brings you to your knees to pray to God for help.
As an operator and former failure ;) I can attest that I know exactly how that feels. The pit in the depth of your stomach that you didn’t even know existed. I’ve stared into the abyss many times and most of the times I’ve jumped.
I’m not here to say I know everything but I’ve experience a lot and can point out red flags that you might not see otherwise. I can call bullshit when others see roses.
So really though, what is a VC Fund?
So here is what I’ve learned so far in answer to this question… a fund is designed around a thesis. A thesis is the driving belief behind investment decisions for the fund. For instance, for Thirsty Friends our thesis is: “Backing early stage food and beverage cpg brands and founders attempting to be category creators… and building it entirely on YouTube. We believe that deals in the pre-seed and seed stages in food and beverage are under valued.”
See?
So if you agree with my thesis, you’d find alignment in the types of companies we would want to invest into.
My job as a GP is to not only find these deals but also get the best deal I can for the LP’s that are joining in the investment.
Nothing is guaranteed of course. The weatherman has significantly better odds at being right than a VC does but instead of predicting the weather, we are attempting to predict culture defining products and moments.
I am looking at products, the markets they are attempting to be in, their strategy and the founders behind the wheel.
At these stages you have to be keen on all of these segments of the decision tree. It can’t just be a good founder - you have to believe that the product is going to transcend the culture. This is where the risk is because there is no way of knowing.
Sure there are signals but there are countless examples of highly signaled brands that floundered and failed along their journey.
Entrepreneur Road is full of founders that just flat out stopped and left their products and companies on the side of the road because they couldn’t figure out how to make it any further.
We can’t predict the future just like we can’t predict the weather but we know for certain that tomorrow will be here soon.