20VC: True Ventures Founder, Phil Black on 4 Major Risk Categories for Startups, Why The Funding Gap Is At The "Rational B" Round & Why VCs Must Start Small But Think Big
Phil Black is a founder of True Ventures, one of the West Coast's leading early stage funds with a portfolio including the likes of Fitbit, recent unicorn Peloton, Automattic (makers of Wordpress) and more amazing companies. Prior to True, Phil learnt the craft of venture at Summit Partners and at the predecessor firm to Lightspeed Venture Partners. However, it was in 2003 that Phil co-founded a small angel fund, Blacksmith Capital with the mission to prove his thesis that great founders of early stage technology companies can and often prefer to start their businesses and get a lot of traction with $2.5 million or less of initial funding. In Today's Episode You Will Learn: 1.) How Phil made is first forays into the world of VC and his big learnings in the early days of cutting his teeth in the industry? 2.) What were the big takeaways for Phil from experiencing the massive dot com boom days to experiencing the very lowest of funding environments? How did that affect his investment mindset? How does that affect his view of startup raising? 3.) What does Phil consider the 4 major risk categories for startups? What combination of risk categories mean a successful outcome is more possible? Which combination mean that Phil would likely not invest in the company? 4.) How should startups determine the "right" amount to raise for? How does Phil assess optimising runway and evaluating burn? What does Phil make of the hailed "bridge round"? WHy does Phil believe lean is always best? 5.) With considerable funds AUM how does sharing in sub $2.5m rounds provide sufficient levels of ownership to ake fund returns? What is True's required level of ownership? How does Phil assess reserve allocation and pro rata rights? Items Mentioned In Today's Show: Phil's Fave Blog: Om Malik, Dan Primack: Axios Phil's Most Recent Investment: Orecco As always you can follow Harry, The Twenty Minute VC and Phil on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Pendo delivers the only complete platform that helps companies create great products. The Pendo Product Experience Platform enables product teams to understand product usage, collect user feedback, measure NPS, assist users, and promote new features in-app – all without requiring any engineering resources. This unique combination of capabilities helps companies improve customer satisfaction, reduce churn, and increase revenue. Pendo is the proven choice of Salesforce, Cisco, Optimizely Citrix, BMC and many more leading companies. Start a free trial at http://go.pendo.io/harry Treehouse is an online school where you can learn how to build websites and apps. Their course library has thousands of hours of content, where you can learn all sorts of topics, including Javascript, iOS, Android and more. With high-quality video instruction from real industry experts teaching you all you need to know, and quizzes and code challenges keep you engaged and on track. Learn on your own schedule and go from beginner to pro. Go to teamtreehouse.com to start your free trial.