20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier
Hunter Walk and Satya Patel are Co-Founders and Partners @ Homebrew, one of the leading seed funds of the last decade. Following 10 years of stellar returns with investments in the likes of Chime, Plaid, Gusto and many others, they decided to not accept any further LP capital and to only invest their own money moving forward through Homebrew Forever.
In Today's Discussion on Homebrew We Breakdown:
1. ) The Foundings of a Great Partnership:
What was the moment when Hunter and Satya decided they were going to go out and raise their first fund with Homebrew I?
What are the core principles that all founding partners need to align on before they start a firm together? What questions should they ask of each other?
Why does being independently wealthy coming into a partnership make the partnership easier and more efficient to operate? What changes when the partners have money already?
2.) What Changes When Moving From LP Dollars to Personal Capital:
Why did Hunter and Satya decide to not raise any further capital from external LPs?
Asset allocation-wise, how did they determine how much is the right amount to set aside for the first 2 years of investing? How many investments do they want to make with that cash?
How does investing their personal capital change their deployment pace and cadence?
How does it change their approach to reserves management and follow-on financing?
How does it change their approach to pricing? How price sensitive are they today?
3.) Analyzing the Seed Landscape Today:
Why do Hunter and Satya not think that a $100M seed fund is enough to properly execute a world-class seed strategy today?
Who is their competition with the new strategy? How does it change their relationship with large multi-stage funds? How does it change their relationship with seed funds?
Do they agree that the last generation of sub $20M micro-funds will not raise another fund in this cycle? How did their entrance impact the seed landscape over the last few years?
Why are LPs also to blame for many of the original seed managers raising larger and larger funds?
4.) Companies: Money and People are The Problem:
Why has too much money been such a problem for many Homebrew portfolio companies over the last few years? How has too much money changed their execution plans?
What happens to the "living dead" companies with many years of runway but no product market fit?
Who does this market cater to well? Who will thrive in this market?
What have people forgotten about both startups and venture in the last 2 years that we have to remember?
Why is this generation so entitled and expectant? Why are startups not a get-rich-quick scheme?
Homebrew VC Hunter Walk Talks Twitter, TikTok, and Tech in the Time of Biden
During Donald Trump’s presidency, tech products became explicitly political. Operatives from both sides picked apart their algorithms and features, examining how they shaped society’s beliefs. And the companies, meanwhile, made choices about what parts of the administration they’d work with. Hunter Walk, who spent nearly a decade at Google and is now a partner at Homebrew, has watched the evolutions firsthand. He joins the Big Technology Podcast to discuss tech’s impact on politics and where it goes next under a Joe Biden presidency.
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Hunter Walk – Building Picks and Shovels - [Invest Like the Best, EP.112]
My guest this week is Hunter Walk, the co-founder of Homebrew, a unique venture capital firm. Hunter is a tool builder, having spent his career before venture at companies like Google and YouTube. The topic of our conversation is the intersection of creative expression, technology, human behavior, and problem solving.
We discuss his time at the company behind the video game Second Life, building tools for creators at YouTube, and why a very hands-on style of early stage venture investing represents an interesting use of his skillset at this stage of his career.
Please enjoy my conversation with Hunter Walk.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:24 - (First Question) – Background on Second Life and what role Hunter had there
6:10 – The virtual currency system at use in Second Life
9:51 – Measuring how people behaved in this virtual world
12:21 – How closely is the Second Life world mimicking real life
15:13 – The market for platforms that lets people take on creative ventures
17:58 – Investments that interest Homebrew
20:21 – Lessons learned while working at YouTube
28:34 – The idea behind Homebrew
33:44 – How to best describe good problems to solve for
36:10 – The Shadow economy and investing in companies operating there
42:17 – Monetization of attention
47:22 – His interest in fintech companies
54:03 – Major trends of change he’s observed over his first three funds
1:04:13 – What is there take on the state of returns for VC’s
1:09:52 – What is the most common way that founders need help and what advice is more helpful
1:14:35 – Kindest thing anyone has done for Hunter
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
20VC: Homebrew's Hunter Walk on Why There Is No Series A Crunch, How To Package Portfolio Companies For The Next Round & Why The Bridge Round Is Not Always A Negative Sign?
Hunter Walk is a founding partner @ Homebrew, one of Silicon Valley's breakout seed funds of the last 5 years. They have investments in the likes of Shyp, the Skimm, Managed By Q just to name a few incredible companies. As for Hunter, prior to Homebrew, Hunter led consumer product management at YouTube, which he originally joined in 2003, managing product and sales efforts for Google Adsense. Hunter is also a thought leader in the industry and his excellent blog can be found here.
CLICK TO PLAY
In Today's Episode You Will Learn:
1.) How Hunter made the transition from Google to VC with the founding of Homebrew?
2.) How does Hunter view the bridge round? Does he agree with Mike Maples @ Floodgate in stating, 'it is often not a bridge but a pier to nowhere'?
3.) How does Hunter look to package his portfolio companies for the next round of investors? Does Hunter agree with Jason Lemkin in stating, 'the best investors are those that specifically know the metrics required to achieve the next round'?
4.) Why does Hunter not believe there is a Series A crunch? How can founders look to describe their story in a narrative that is attractive for VCs? What one trait does Hunter look for in founders more than any other?
5.) What is the biggest challenge in the coming year for Hunter with Homebrew? How does he measure his success as a VC?
Items Mentioned In Today's Show:
Hunter's Fave Book: Harold and The Purple Crayon
Hunter's Fave Blog: Ben Thompson: Stratechery
Hunter's Most Recent Investment: JoyMode
As always you can follow Harry, The Twenty Minute VC and Hunter on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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Product Hunt Radio: Episode 12 w/ Hunter Walk & Satya Patel
This week I, Ryan Hoover, visited the colorful Homebrew headquarters to catch up with Hunter Walk and Satya Patel. We chatted about their latest portfolio addition, the qualities they look for in a founder, and the awesomeness of "crazy" products like Vessyl and Yo. Products mentioned: - Nuzzle for iOS (http://www.producthunt.com/posts/nuzzel-for-ios) - See top news surfaced by your friends on Twitter & Facebook - theSkimm (http://www.producthunt.com/posts/theskimm) - Daily summary of current events in your inbox - Refresh (http://www.producthunt.com/posts/refresh-1-6) - Get Insights about the People You Meet - Slack (http://www.producthunt.com/posts/slack) - Be less busy. Real-time messaging, archiving & search - Fancy Hands (http://www.producthunt.com/posts/fancy-hands) - Assistants for Everyone - SHADOW (alpha) - Dream-based social network - Yo (http://www.producthunt.com/posts/yo) - A simple app to say "yo" to friends - Outdoors - AirBnB for Outdoors Equipment - Vessyl (http://www.producthunt.com/posts/vessyl) - A cup that knows what you're drinking - TravelbyDrone (http://www.producthunt.com/posts/travelbydrone) - Collects travel videos taken by drones - Snapchat Our Story (http://www.producthunt.com/posts/snapchat-our-story) - Experience live, real-time events together - shortwave (http://www.producthunt.com/posts/shortwave-2) - Short-range anonymous messaging (Secret meets Firechat) - Leo (http://www.producthunt.com/posts/leo-1154) - Ephemeral group photo chat with text that last 24 hours