Seattle VC Profile: Tim Chen, Essence VC

When I started Ascend in 2019, I realized even though I was o-l-d OLD, I had more in common with the folks in town who were earlier in their professional investing journeys than the venerable VC’s I’d pitched as a founder. I admire and respect the new wave of Seattle/Pacific Northwest venture capitalists, and thought it would be fun to profile some of our region’s up and coming VC talents in these pages. —KW

Tim Chen is a thoughtful, insightful, technical and hyper-networked investor. As a founder, he raised venture and exited successfully, he’s always up to give founders feedback, and he was kind enough to share more about his journey and approach below.

What made you decide to be a professional investor?

I wasn't planning to be an investor through out my career, but I was really in love with the startup ecosystem. After joining several startups as one of the earliest employees and founded my own company, I had my own perspective on the infrastructure side of startup operating and how investors generally work, and had a general conviction that there can be a better help for 1st time technical founders going after this space. This conviction grew stronger once I started angel investing, and helped a dozen companies in this sector.

Therefore I decided to raise Essence fund I in 2019, and want to start building the muscle and brand around this space.

What did you do before becoming an investor and how does that benefit your founders?

I was early employee in 3 startups (Z2, Mesosphere, Grid AI), VP of eng in a Series A startup (Cosmos), and CEO / founder in a venture backed company in the infra space.

I feel a lot of empathy and connection in the founders I back, since I was in their shoes not that long ago trying to navigate similar challenges, especially transitioning from a deeply technical background into a founder.

What are your most successful investments so far?

Flatfile

Why should founders want you on their cap table?

Pretty much every VC will tell founders they're the best investor for their round, but certainly the only true thing is what the founders they already backed say. So will skip the promotion here and feel free to ask founders backed by us :)

How many new pitches (actual calls/zooms) do you take per month?

This varies quite a bit, and certainly grew a lot over time. Right now I'm taking a short break so down to single digits per week.

How many new investments do you make per year?

For Essence VC Fund I I was making around 25 companies per year, for fund II this will be probably down to 15-20 companies.

What's your sweet spot(s) in terms of check size, valuation, and vertical?

Essence VC we back deeply technical 1st time technical founders, so founders coming from systems, research, open source engineering backgrounds is where our sweet spot is. Vertical wise we focus on enterprise / B2B, and have done quite a bit of infra and dev tools companies in the past.

We are writing average 100k checks for this fund.

What one portfolio company do you want to hype for us here?

Iteratively just announced their funding that's located here in PNW, and extremely fortunate to be able work with them (and Kirby!) on this.

What do you think the next ten years looks like for Seattle/Pacific Northwest startups?

My thesis is that for early stage enterprise founders, geography may not make a big difference anymore as we continue to see the proliferation of bottom up adoption companies + the acceleration of Zoom investing with COVID. So Seattle / PNW startups can leverage this and build relationships with investors and customers that isn't only accessible local, and find the best partners in their journey.