Ascend Venture Capital LP Profile: Laura Butler, Uplift Group #openlp

March 8, 2021

When I was a founder, I had no idea what a Limited Partner in a venture capital fund was. Now that I run my own fund, I want to bring transparency to founders and let them know where our money comes from. Our LP’s are an incredible group of individuals who often advise our founders and myself as we strive to create the next generation of world-changing startups (and funds!). -KW

I’ve known Laura Butler, long-tenured Microsoft Distinguished Engineer and Technical Fellow, and now founder of property-tech startup UpLift Group, since we met as mentors at the Allen Institute for AI Incubator. When we first connected I was immediately struck by her curiosity and approachability - for someone with her immense and frankly intimidating technical chops, she was more focused on learning than lecturing. So it’s no surprise she quickly adapted to the zero to one startup world, made a slew of great angels investments, and kicked off her own startup journey. Ascend co-invested in LegUp with Laura, and she’s an incredible asset to our portfolio founders as a Limited Partner in Ascend.

You held some of the most prestigious engineering roles Microsoft has to offer, and built some of the company's most enduring products. What made you decide to leave all of that behind and start UpLift Group from scratch?

Why leave Microsoft? Microsoft is a platform company. There was a time when platforms - operating systems, devices, infrastructure, and APIs - mattered to individuals and were changing the world viscerally. It was awesome and I was so lucky to be part of it. But over the past 5-10 years, it’s felt increasingly indirect and narrow. I just don’t care about new icons in Windows or an additional option in some dialog in Office or release v17.5b of a schema.

It came down to Ikigai. What makes me happy is to work on something that matters to me personally, something I can contribute to uniquely, something with other people I enjoy learning from, and something that makes more time, money, freedom, or quality of life for other people who need it most. So leaving Microsoft was easy. The question was what to move towards.

Why a start-up? Originally I thought I’d join a scaling-up company, to learn a lot while hopefully contributing operator skills, then maybe become a founder or investor. But it hit me pretty quickly that I knew almost nothing relevant for a modern tech company, and even the stuff I thought I knew needed to be relearned. Plus the earlier stage the company the more interested I was as well as the more scared. I couldn’t stop thinking about starting something from scratch. And as I was reflecting on my personality traits, particularly the things that were weaknesses and problems at a big co, I realized they could also be strengths as a founder.

Why found UpLift Group specifically?

I Marie Kondo’ed my life, or rather Marie Condo’ed it, as part of making changes. I sold my house, it was too much work and not bringing me joy. I bought a condo because condos are supposed to be effortless, the best of apartment living combined with the benefits of homeownership, with pluses like being near shops and restaurants and shared amenities like roof decks.

Well, it turns out that condos are an iceberg and my impression is the tip above the waterline. Condo ownership comes with more responsibilities and restrictions than a stand-alone home. You are a member of an association, an HOA, and joined at the hip with your fellow members. To operate an HOA wisely takes deep expertise across finance, governance, and maintenance. These are arcane subjects (WUCIOA? CC&Rs? Level 3 Reserve Study?) and trustworthy owner-centric information is utterly lacking. The existing tools and solutions revolve around property management, not owners.

I didn’t know what I was getting into emotionally, financially, and legally with buying a condo. I didn’t even know what I didn’t know. Fortunately, my mom (Carol) is incredibly experienced and knowledgeable about HOAs. She’s owned many condos and townhomes across several states, served in every board position, and she’s seen it all. She also happens to be an economist specializing in public policy, exactly where finance meets governance.

The more we dug in, the more we became convinced that there was a huge opportunity to help HOAs be happier and healthier. It starts with quality democratized data and accessible expertise. So the two of us founded UpLift Group. Everything we’ve learned since founding has strengthened our conviction and passion.

If anybody out there reading this is buying a condo, owns a condo, or knows somebody who is - contact us! We can save you time, money, and stress. We can also help your entire HOA. Visit www.upliftinc.co or email me at laura@upliftinc.co.

You dropped out of Harvard to come to Microsoft in 1989. If you had it to do over again, would you have made the same decision? Do you recommend young people chase their passions even at the expense of a college degree?

Yes, I would make the same decision again but only if it was at the same point in time. In 1989 computer science classes were far away from the reality on the ground. The industry was evolving fast, exciting, cool, and changing the world. Microsoft - what I moved towards - was in the middle of it. Harvard was the antithesis, making it easy to leave. But I would’ve stuck it out if Microsoft hadn’t come along.

Things are different today, especially with computer programming. Beyond the basic foundation, universities help students learn how to learn, how to go about solving problems, and how to collaborate with other people. Those are critical skills. They take time and practice. Plus, college and college internships are great laboratories to try things out and discover passions. They also act as a transporter, carrying graduates to companies that are recruiting and hiring.

Covid has changed the value proposition some with remote work and remote learning. And of course, the cost is a huge factor as is culture. If your school isn’t the right place for you or you can’t afford it, then yes do something different. But try smaller changes first rather than dropping out. You can change your course of study, you can alter your schedule, you can switch universities, you can work-study with apprenticeships, and you can some take time off. Graduate and get your degree, just don’t end up burned out or crushed by debt. That serves no purpose.

You've become a prolific angel investor in a short period of time. I know you to be a fierce advocate for founders, and believe your angel thesis is built entirely around women founders and founders of color. What do you see as the most common "missing link" for underestimated founders raising institutional capital?

My angel thesis is different actually but it has worked out the way you describe. I’ve always invested the same way, whether it’s time or words or support or money. Angel investing is just one more type of investment and one I wish I had done sooner.

I invest in

People I know
Things I care about
Areas I have some understanding of
Efforts I might be able to help beyond $
Ideas I feel are underappreciated or overlooked

I’m a short nerdy scrappy contrarian woman. Most of the world’s existing products and companies don’t target me. They don’t know my needs or wants. They don’t solve problems I have or make the world be the way I would like it to be. Plus I’m magnetically attracted to grit and hustle and cinderella stories. All of this just happens to align with atypical founders.

This is going to sound obvious after the fact, but the missing link is that institutional capital involves institutions. Institutions are best worked and navigated with help from the inside and they hate risk. Underestimated founders often don’t have a “mole” in their network, somebody who can explain the system and act as a guide. They also often don’t have “vouchers”, the résumés and the advocates who bring “credit” and change the risk equation.

Those of us with connections and access and “credit” can make a big difference by sharing those things and using those things for founders who don’t have them. It’s what I try to do. Be a mole, be an informer, be a cheerleader, be a guide, be a voucher, be an early endorser. I think of it as fairy-godmothering. It doesn’t take a lot of time or effort. You can do it at scale and it multiplies over time. It’s energizing and it’s fun. The world needs more fairy god-mothers.

You're known for your quick wit, wise counsel, and kind heart. Also your chocolate chip cookies. How do you stay so grounded while in possession of such a powerful technical mind? Any tips for technical founders on improving "EQ" and becoming secular startup leaders?

Are you sure you have the right Laura Butler? :-) I’m LauraCatPJs on Twitter and LinkedIn.

Fortunately, I don’t have to try hard to stay grounded. I’m 5’0” so I’m low to the ground by nature. What keeps me in place is irreverence and humor. I see the funny side of things. I am thrilled and intrigued by the unexpected, the stuff which happens that you couldn’t make up if you tried. Laughter is good medicine. Being able to laugh at yourself is a vaccine.

For tech leadership EQ, I can’t stress enough the idea that management is engineering too. Teams are designed, built, repaired, improved, refactored, and updated just like code. It is work that needs to be planned, scheduled, measured, rewarded, and done along with all the other work.

The job of a manager is team optimization, to get the best overall out of a team in a sustained way over the long haul. How people feel materially impacts that. You wouldn’t want a constant heavy load on your servers, bogging everything down and wearing out the hardware, without the capacity to handle new traffic much less deploy new stuff, right? The same goes for the team.

Any founders/investments you want to hype for us here?

Why yes, yes I do. ALL OF THEM! But I’ll focus on a few that

Have ties to Seattle
Are starting to hit their stride
Raising $ soon or completing a raise

Orchard Tech

Friendly and empowering tech help especially good for senior citizens and n00bs. Recently featured on Kelly Clarkson. Founded by Ming Yang.

PredictionStrike

Performance-based sports stock market when you can put your money where your mouth is about your fave athletes. Founded by Deven Hurt.

Leg Up

OpenTable for childcare, matching families to providers with open seats. Founded by Jessica Loche-Eggert and Garrett Vargas.

Blend.ed

Helping university & higher-ed teachers transform their traditional in-person course into online, modern, remote-friendly content. Founded by David Boone.

Own Trail

Career help and peer mentoring through story-stelling and community, currently focused on womxn. Founded by Rebekah Bastian and KT McBratney.

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

I think it will be incredible, even better than the 1990s. I’m big on Seattle of course. It’s why I choose to live here still after 30 years.

I believe what made Seattle’s tech scene was many different ingredients coming together in the 1990s to produce a great dish. Those ingredients included music, coffee, writing, art, fishing, film, aviation, the outdoors, agriculture, our position on the Pacific Rim, medical research, the culture and history of the Indigenous peoples, and immigrants from all over the world. They helped focus our tech development on human problems and human purpose.

We have a long tradition of philanthropy in this area and investing in this area. Paul Allen with Vulcan and the Allen Institutes is a great example of that. We have 100x the resources today for entrepreneurs, artists, and researchers than a generation ago. There’s a critical mass of programs, advice, support, and knowledge when it comes to startups. And it’s just the start. Microsoft, Amazon, Google Cloud, Adobe, Salesforce / Tableau, and many more companies here have a tremendous amount of untapped wealth in terms of people and funding.

This region drives IaaS and PaaS for the world. What better place to found a startup? Your tech utilities and company infra are here. Your dream new hires are here, graduating from the U of W and Seattle U. Your disruptive research is being done here. Your experienced managers and operators are here. Your creative design experts are here. Your shipping and distribution are here. Everything and everyone you want is right here or they are nearby in Vancouver BC, Tacoma, Portland, or Spokane.

As for VCs, they are to startups like bears are to salmon. Where great startups are being spawned the investors will show up to fish. :-)

Current top song in your Spotify rotation?

I don’t have Spotify. KEXP (a Seattle radio station) on my Sonos (a company with Seattle roots) is what I usually listen to during work. KEXP is always fresh and always interesting. When I’m running, it depends on the kind of run and my mood. Right now I’m wallowing in Daft Punk now they’ve split up. I forgot how great the Tron: Legacy soundtrack is.

Favorite shoes?

Allbirds for walking, Brooks (a Seattle company) for running, and Jimmy Choo for glam.

Favorite cooking ingredient?

Butter. It makes everything better.

Seattle VC Profile: Austin Guyette, Voyager Capital

March 3, 2021

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

Austin Guyette sweats the details. He thinks like an operator and brings real talent to bear when he digs into a startup, even if he doesn’t invest. Austin is one of the rare VCs that actually makes founder think differently about their opportunity.

What made you decide to be a professional investor?

There wasn’t a single “ah-ha” moment. The decision was something that evolved over years.

I didn’t start down this path intending to become an investor. I had worked at a startup, knew I eventually wanted to start a company, and thought it would be useful to understand how investors worked. I dove in, learned everything I could, and discovered that being an investor was how I wanted to spend my career. For someone who is naturally curious about technology, enjoys investing, and likes working with people as much as analyzing a market it’s an extremely interesting job.

What keeps me loving what I do is the pursuit of mastery in this craft, a sense of purpose to serve our founders and LPs, and the autonomy in how we spend our time to make that happen. We’re constantly learning and evolving to do a better job.

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

I was technology consultant for large enterprises (think big financial institutions and insurers) and helped build the first set of products at a healthcare analytics startup. The first job where anyone paid me was cleaning bathrooms and renting paddleboats at a county park.

I didn’t start as an insider to the venture industry. I’d like to think this hodgepodge of experiences manifests in my relationship with founders as:

Empathy for the early-stage journey having been a part of the 0-1 process in a previous life.
Zero-ego, no-nonsense, and intense loyalty in my relationships with our founders.
A blue-collar “in service to others” mindset to my work. I want our founders to be successful and will do everything within my power to make that happen.
Thinking like a product manager – I assemble resources, gather information, and collaborate with founders to make the best possible decisions together with humility. It’s an influencing without authority mindset that some of the most effective product managers have.

What are your most successful investments so far?

The two Voyager companies that have really broken out over the last few years are SheerID and Zipwhip though I was not with Voyager when those investments were originally made. “Up next” in the Voyager family is Syndio. They help ensure fair pay within the workplace and might have the most important mission of any company we’ve invested in.

Why should founders want you on their cap table?

We take leadership development seriously. The job of founders is so different at a company of 3, 30, and 300 people – it’s incredibly challenging to make these transitions. To help, we have folks on the Voyager team who specialize in CEO coaching, leadership development, and organizational change. (We also dogfood this tenant via coaching ourselves.)

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

We’re probably in the ballpark of 30-50 new pitches across the team every month.

How many new investments do you make per year?

We’ll generally make 2-5 core investments each year.

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

We’re exclusively a B2B investor but vertical agnostic. It’s tough to put names on things since the definition of a Seed and a Series A has changed over the years but I would say that Voyager invests across most of the Seed and Series A spectrum.

Our core investments are lead checks of $1M-$5M in rounds totaling $2M-$10M in size. Generally, companies at this stage have a repeatable value proposition to customers and are working towards a repeatable go-to-market motion. We also write seed checks of $100k-$500k in rounds of $1M-2M.

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

I’d be remiss if I didn’t talk about our joint portfolio company Candidate! They help employers hire through the power of personal referrals. If you think about a job posting on the internet today, it really only reaches those who are actively looking for a position. Candidate exposes employers to an entirely new, networked universe of people actively thinking “who do I know that would be the perfect fit for this job” and uses that as a lens to recommend people for a role. They’re just getting started but feedback from their early customers has been incredible.

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

We’re going to see the sous-chefs in our region develop into the next generation of legendary founders in the Pacific Northwest.

Let me explain that metaphor. In a kitchen, the sous-chef is second in command, ranking just under the executive chef. They hold an incredible amount of responsibility to operate the kitchen and make sure the food is of the highest quality. In the best kitchens in the world, sous-chefs work their way up to become experts in their craft. Those with enough creativity and ambition leave the nest and start their own restaurants with a unique style and flavor based on what they’ve learned.

Sous-chefs in the startup context are the early employees of a company that finds product market fit and goes into hypergrowth. They’re usually a director or VP level but are probably not founders themselves and can be, but are usually not, on the executive team. They learn how to level up their skills quickly. They operate with the passion, speed, charisma, and focus necessary for a startup to be successful. Almost always, they develop a unique insight on a set of new problems they learned about during their experience. Sometimes, they leave the nest and start their own companies to fix those problems. They are the founders of tomorrow.

We all know the standard “The Seattle/PNW startup ecosystem is poised to explode” pitch. Iconic companies! (AMZN, MSFT) World class education! (UW grad here) Critical mass of technical talent! (checkout the map of engineering centers) More venture dollars! More incubators and studios! All of these are good points, but they miss a critical ingredient that’s rapidly changing before our eyes. The quantity and quality of sous-chefs.

Since 1994, Seattle has had 37 companies reach the billion-dollar mark, an average of 1-2 per year. Over the last three years the rate these companies are being minted has increased to 4-5 per year. The data is similar for companies valued in the 9-digit realm. We’re TRIPLING the number of sous-chefs in our region and no one is talking about the second order effects of that growth.

Our region’s next legendary founders will come from Auth0, Convoy, Outreach, Remitly, Rover, and Zulily. Mona, Patrick, Maria, Shane, Tomasz, and Ryan are CEOs doing incredible things and more like them are on the way.

PNW sous-chefs are having their coming out party and I can’t wait to see what they’re cooking.

What song is currently getting the most run on your Spotify/Apple Music?

The Foo Fighters and Eric Church get the most airtime on my Spotify. “Sinners Like Me” holds a special place in my heart and “Kill A Word” is a song I love that’s gotten more runs recently.

Favorite shoes?

Hands down my ski touring boots.

Favorite cooking ingredient?

The dried porcini mushrooms that go into a White Bolognese recipe that our dad made for my brother and I as kids. The smell brings back memories and the dish is delicious.

Anything else to say?

I’m truly grateful to be able to do this for a living. My incredible colleagues at Voyager and the founders we partner with make this job special. It’s an honor to work with them and I feel lucky to be in this position.

If you’re a sous-chef opening a new restaurant, don’t hesitate to get in touch ;)

Seattle VC Profile: Cameron Borumand, FUSE

February 24, 2021

Cameron Borumand has been a voice of support and encouragement since I began my full time investing journey. He helped give me the confidence to take the plunge in raising Ascend VC I. He’s a diligent, savvy investor with some great picks behind him and his best years ahead, and he just founded Seattle’s newest member of the (very small) $100M+ VC club, FUSE.

What made you decide to be a professional investor?

Honestly (and somewhat embarrassingly) I remember watching Shark Tank growing up and finding myself obsessed with the entrepreneurs. Their passion was contagious on that show and I know I wanted to either be an entrepreneur or work closely with them. This feeling stayed with me when I started my career in investment banking in San Francisco and was only amplified after I had a chance to work with founders first-hand.

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

Technology investment banking in San Francisco. I loved many aspects of the job, most importantly helping founders get liquidity on their life’s work. This was often a very emotional process, especially when the founder had spent decades building the business, all to see it end up in someone else’s hands – very much like giving your baby up for adoption. As the investment banker, our job was to guide them through the process, providing support every step of the way. What this experience taught me most of all was the power of telling a story. This comes in handy as we help our portfolio companies craft a pitch, either to a new investor, customer or potential hire.

Why should founders want you on their cap table?

You don’t just get me on your cap table. You get the collective experience and insights of the entire FUSE team. No team will work harder than Kellan, Sara and myself to support our founders. Combine that with the operational expertise of John Connors (early Microsoft) + Satbir Khanuja (early Amazon) and the unique talent of Bobby Wagner = a winning combo. Our LP community is a huge value add as well, because it includes executives at many of the top companies in the PNW. This is a huge needle mover for customer and talent access early in a company’s life.

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

I try to be more accessible to the PNW founder community, so ~35-40 on any given month.

How many new investments do you make per year?

FUSE will do about 6 deals per year.

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

We’ll write between $2M-$6M checks. B2B software is our core focus and where we can add the most value. I wouldn’t be the best pure consumer investor, I don’t have Instagram, I’m not making dance videos on TikTok (unlike Kellan), and I think my Facebook is deactivated.

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

I’d keep an eye on Carbon Robotics. The founder and CEO Paul Mikesell is one of the best entrepreneurs I’ve had the pleasure of working with and they’ve built an incredible team. More to come on them in April.

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

This is a very unique inflection point in the PNW – it’s turning from an important regional city to an important global city. $200Bn in exit value will be created in the next 10 years. Seattle will become the de facto world leading ecosystem for enterprise software. Ascend will strike it big with multiple exits and Kirby will buy Cam a boat.

What song is currently getting the most run on your Spotify/Apple Music?

My friends tell me I have embarrassing taste in music - lately Jess Glynne has been playing quite a bit... We have a Bose speaker in the office that we crank up past 5pm – very fun/upbeat culture at FUSE!

Favorite shoes?

My green Birkenstocks, the full plastic ones. I LOVE THEM

Favorite cooking ingredient?

I’m a horrible cook and will put not only my own safety but the safety of others at risk when I step into a kitchen.

Anything else to say?

So pumped that more folks like you (Kirby Winfield) are raising funds and getting active at the pre-seed / seed stage. Your background and experience is invaluable and I’m so jazzed up it’s going to help the next generation of PNW entrepreneurs build big businesses.

Ascend Venture Capital LP Profile: Walter Delph, Magic Leap #openlp

February 23, 2021

I’ve known Walter Delph, Chief Business Officer of Magic Leap, since we were college football teammates. Walter has built an incredible resume as an executive at Verizon, Fox/News Corp, BCG Digital, and a stint as startup CEO. He’s on the board of the NHL’s LA Kings, and faces his latest challenge in changing the face of augmented reality and spatial computing at Magic Leap. Ascend is fortunate to have him in our corner, and I’m even more fortunate to call him a friend.

You're running revenue for the most heavily funded AR startup in the world. I won't ask you what keeps you up at night, but rather, what gets you excited every morning?

The market opportunity is real and customer needs are accelerating. Massive opportunity in this space. According to IDC, the AR/VR market is expected to grow to nearly $140 billion by the end of 2024. The media often fixates on the consumer side while there are significant near-time opportunities in the enterprise.

- COVID has accelerated the need of many customers as the way we work is fundamentally changing.

- Magic Leap has been working in this space for a long time and they have developed a strong technology platform with one of the most robust IP portfolios I’ve seen for a company of this scale.

- As we have narrowed our focus to the Enterprise, we have growing customer relationships and partnerships. We have a manufacturing customer right now that is using our technology to improve remote assistance on the factory floor, which has proven even more valuable with COVID travel restrictions. We also worked with a large university to enable one of their graduate cohorts to have interactive lectures in full augmented reality when their in-person classes were cancelled due to COVID.

- Think of this technology as similar to the early days of the mobile phone. Enterprise was the first adopters in those days as well. Even though size and weight were larger than our mobile phones of today, the tech was able to provide clear ROI to customers, for instance those who worked from their cars and had the need to stop and check in often with their home office throughout the day. The mobile products from those days fit the needs of those enterprises and delivered ROI to those companies who deployed them across their teams.

We played a little football together back in college. Is there anything about your experience as an athlete that informs how you approach business?

Be prepared for a response filled with cliches. Let's take football, a team sport that fields 22 positions to play the game. 22 players and the bench need to be bought in to the mission passed down from ownership, the coach and the on-field captain.

It is your opponents job to find weaknesses, and that weak link, if not properly trained, can ruin the best laid plans. So it is the job of the team to be as prepared as possible. To execute better than the person across from him/her. These simple lessons learned when I began team sports in 3rd grade and still hold true today.

What do you like most about early stage venture as an asset class?

An idea CAN change the world. Early stage venture is the rain the nourishes the technology ecosystem and there is nothing more exciting than being apart of that change.

That being said, I for one think early stage can be more ambitious. More ambitious with regards to changes to how people do business today. More ambitious as to who we fund, women and minorities.

What's the best advice you have for a founder just starting out at the idea stage?

Test multiple business models until you see that step change and then focus relentlessly on execution. Many entrepreneurs think about a few types of revenues models but gaining meaningful traction with customers takes time. Be wary of anchoring too soon. You may have the wrong model.

What do you think the next ten years look like for spatial computing?

This idea of “Spatial transformation” is well-positioned to become an enterprise-wide strategic priority in this era of Covid.

Today, the stakes have never been higher, with more than half of US CEOs (62%) expecting global growth to decline over the next 12 months. (PwC).

So, a spatial-first digital strategy can help eliminate distance, bringing together distributed teams in virtual settings, which also has the side benefit of cutting travel costs and emissions. It will help manufacturers precisely design products even when their employees are not co-located, with the ability to analyze, test and modify before production and reduce waste. It will close the skills gaps with immersive training and expand access to talent, ultimately reducing workforce expenses.

Being a spatial-first company, we believe we can deliver on that promise of an infinite world without fixed physical screens. We’ve powered businesses with the hardware, the inspiration to understand how to apply the tech to their enterprise problems, and an open ecosystem of partners that build custom solutions. We are literally rewriting the rules of work through this technology.

CUSTOMER EXAMPLES:

We have a manufacturing customer using our technology to improve remote assistance on the factory floor, which has proven even more valuable with the COVID travel restrictions. The factory worker does not have to be the expert on every machine, but with remote assistance can be guided through a process with an expert that “sees what they see” but from perhaps a continent away!

Mount Rushmore of Hip Hop?

Jay Z
Eric B & Rakim
NWA
Vicious debate between Slick Rick and Public Enemy. PE wins!

Favorite shoes?

All white, suede Common Projects my wife got me for Christmas. Nicest pair I’ve had in years!

Favorite cooking ingredient?

Soy sauce

Seattle VC Profile: Anu Sharma, Madrona Ventures

February 18, 2021

Anu Sharma possesses that rare combination of a powerhouse intellect and a high EQ. She’s operated at the highest levels in incredible companies and brings start founders that critical perspective we often miss when trying to get from 0-1: once you succeed, are you built for scale?

What made you decide to be a professional investor?

Working in high growth environments such as Flipkart and AWS converted me into a believer in founders and builders, especially when they appear crazy and outrageous. There aren’t enough people invested with them in constructing the groundwork to build lasting companies. I want to invest by transferring the lessons and rigor of product development and iterative growth from my past experiences into a few companies that’ll serve the next generation.

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

Crafting products, driving growth, and building for scale require the mindset and discipline for making hard tradeoffs along the way. Over the last six years, I’ve led product management teams in EC2 (AWS) where we constantly pushed the envelope in serving new customer needs in the cloud. Working up from first principles, we redesigned nearly all layers of technology, from new hardware to virtualization, performance and user experience, pricing, and go-to-market strategy. Before that, I’ve led product management in Amazon’s Global Payments Platform, which processed billions in revenue across all Amazon businesses, building the infrastructure for the end to end payment workflow, serving account balances, and onboarding merchants and new businesses. Prior to that, I’ve helped launch the social and affiliate marketing channels at Flipkart before starting my own e-commerce company. After 17 years, the muscle memory helps me stay open to new situations and learn every day from the founders that I work with.

What are your most successful investments so far?

My most successful investment has been my time with Amazon and Flipkart. Over the last 8 months at Madrona, I’ve led investments in two companies that are yet to be disclosed. Prior investments were mainly in public securities where the markets have been fairly kind to me.

Why should founders want you on their cap table?

I’m here for the journey, as a trusted partner for the long term. The cap table is generally just one manifestation of one leg of the journey.

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

I research about 20-30 companies and meet with about a dozen over the month.

How many new investments do you make per year?

Aim for no more than 3 investments a year.

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

Pre-seed and seed, followed by Series A. The check size usually varies by specific situation and timing.

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

Pulumi – they’re one of the best teams I know of and they’re building a long-term game changer.

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

I’m expecting new pockets of invention building on and extending the infrastructure that Amazon and Microsoft have already laid down. It’ll require a lot more bold bets from engineers and founders. Today, a lot of them seem to spend the bulk of their time solving for organizational alignment and collaboration in Amazon and Microsoft, solving for problems of scale. These are good problems to have but are mostly building on past innovation. The PNW has the brain power to be the core of the next technological revolution.

We’re also painfully undercapitalized outside of the larger companies and I expect investors to also take more bold bets in the region. Would also love to see better job mobility and employers building deeper loyalty with employees so they don’t have to rely on non-competes.

What song is currently getting the most run on your Spotify/Apple Music?

Put Your Records On – Corinne Bailey Rae

Favorite shoes?

Do Peloton shoes count? Used them more than any other pair this past year…

Favorite cooking ingredient?

Paneer. My husband loves anything that has paneer in it.

Anything else to say?

Remember to wander. Let curiosity be your compass. – Jeff Bezos

Seattle VC Profile: Tim Chen, Essence VC

February 10, 2021

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.

What song is currently getting the most run on your Spotify/Apple Music?

Wheels on the bus for my son...

Favorite shoes?

Allbirds!

Favorite cooking ingredient?

Korean Gochujang sause :)

Anything else to say?

Glad to be here on the prestigious Ascend blog!

How I got here: A relatively dry but info-packed interview transcript if you want to know more about my journey from Seattle Startup to Seattle Venture Capital

February 6, 2021

Kate*: Can you give me some background on your professional career?

Kirby: I graduated college in 1996 and thought I was going to go into the advertising world. I moved to New York City. And then three months later, a friend of mine called and said, Hey, I’m starting an internet company. Do you want to come and help? I said, sure. I’m from Seattle originally so I moved back out here. A month later, the guy who was supposed to run marketing for the company left. I was just doing editorial work, but I took over the marketing role and we ended up taking the company public – Go2Net. I ran marketing from 10 people through the IPO with 1000 employees. I loved it so much that I decided to do it again with the same group so we got together and founded another company in 2003 called Marchex which we took public in 2004.

Kate: Were you a marketing executive there or more of an overall business leader?

Kirby: I started out as the head of Marketing and we raised a $164M secondary offering to purchase a portfolio of domain names. I ended up being the GM of that business which was like a digital media network that we monetized through pay per click advertising. And so that business went from $4M in revenue when I started to $40 million. We took that company public in 2004.

Then I left in 2009 and ended up taking over a venture capital backed startup that was initially built to be an advertising network. The former CEO had raised $18M from a couple of big investors in the Valley. And it turned out that the network was suffering from some bad traffic and so we had to find a pivot and we moved to an advertising analytics platform. We recapitalized the company and we sold it to comScore, which was a big $2B, public market research company. I ran corporate development there for a year and a half and then I left to cofound a company called Dwellable, which was a vacation rental app. That was in 2013. We raised $2 million.

Kate: Was it similar to an Airbnb?

Kirby: It was a mobile version of AirBnb. We sold that in 2015 to HomeAway, which was bought by Expedia a week after we closed. And then in 2016, I decided to move out of the operating world and into the investing world. And I did that pretty mindfully initially by taking some money off my own personal balance sheet and invested full time in start-ups.

I wanted to try to discover if this theory I had was true, which was that the model of the ex-founder, ex-entrepreneur turned investor (which works really well in the Bay Area but hadn’t really been done extensively in Seattle, beyond Founders’ Co-Op) could work. Also at the same time, there's a real lack of pre-seed early stage risk capital in Seattle and in the Pacific Northwest. And you see most of the larger firms - who I respect and love working with - but they’re often staffed by investors who haven't operated startups or raised venture capital on their own. Which again, is not bad in and of itself, these folks have proven their value with monster returns over time! But it just creates a sort of homogenous experience for founders. Also, those firms have to write big checks, they have higher ownership requirements and it really leaves a big hole/gap in the capital stack.

So it turned out that my theory seemed to be true and that the product that I was offering was well received and was able to establish good investments and deals that ended up going pretty well and had interest from investors for me to raise a fund. In 2019 I embarked on Ascend Venture Capital I which is our first fund. It's a $15 million fund focused on pre-seed startups in the Pacific Northwest. Initial checks are $100 to $250k. Half the fund is reserved for following on the winners and we focus on three areas of the market in terms of categories and those areas where we think that the region has advantages and that I also have personal edge.

And so that's marketplace businesses and e-commerce businesses on one side, and then B2B SAAS with AI at the core on the other side. I’ve also spent the last three years advising the Allen Institute for Artificial Intelligence and have come away believing that AI is the table stakes for the next 10 years and beyond for any data driven business. We’ve deployed $6M, and we've got 30 companies in the portfolio. They’re kind of split down the middle between the e-commerce/marketplace and B2B SAAS.

Kate: Wow. That's pretty cool! What are you looking for other than businesses within the general categories when you are considering investing in a start up?

Kirby: I don’t even care about the categories. I just want to meet the best entrepreneurs. I just want to meet people who have a unique insight about the future state of the world and then the passion/reason/experience/and wherewithal to bring that vision to life and enable that future state that maybe we can't see. And that they have an unfair advantage of doing that.

Kate: Are you looking for entrepreneurs in an area where things haven't been done before? Like creating a new product or service?

Kirby: Not necessarily. I think maybe where things have been done poorly or where maybe things have been tried, but the time wasn't right. So “Why now?” is a question that we always ask founders. “Why you? And why now?” The “Why you?’ is about founder market fit and the “Why now?” is about either trends that have emerged or technology advances that enable something to happen that couldn’t have happened before. The classic example is Webvan. They were around in 1999. Because they tried to build their own logistics networks from scratch, the business was unable work in a margin effective way, and they failed. And clearly many delivery businesses today leveraged existing infrastructure and networks and are wildly succeeding. AI is a great example of this too. Even five years ago, the cost of compute to enable some of the really interesting advances in natural language processing and neural networks was so high that it was prohibitive for the vast majority of companies to implement. Then all of a sudden there were these quantum leaps in how you set up/structure and manage resources around artificial intelligence software. That opens the door for companies that would have failed three years ago just based on the technology landscape.

Kate: How many people are working at your VC now?

Kirby: It’s just me.

Kate: What is the minimum investment from your partners in your fund?

Kirby: The minimum for LPs in the fund is $500,000. I have the option to drop that minimum. If there's a particular limited partner who is going to have a ton of value, but maybe is not liquid. So an example would be that we've got a number of start-up CEOs who are LPs in the fund and their startups are worth billions of dollars. But they're not liquid. In those in those cases, I'll drop the minimum.

Kate: What made you want to strike out on your own? Was it your theory?

Kirby: Yeah, I kind of tested it on my own for three years of angel investing and got the data I needed around it. I thought, “Did I enjoy the work, right?” I’d never really asked that question in my career before. I’d never asked, “Do I like this?” And I’d never really asked myself if I was good at particular things. I just kind of did what I could do and tried to press it really hard to success. It was important to me in this career pivot to take the time and be thoughtful about evaluating if I enjoyed the work and if the market validated that what I was offering to entrepreneurs in the way of advice/support, nonmonetary is different. Although capital seems like it’s not easy to get, there's lots of capital out there. How was I going to differentiate? Because long term for limited partners, institutional investors, all they want to understand is what is your sustainable, competitive advantage. And, for me, I didn't go to MIT. I'm not a computer scientist. I'm an English major. I think a lot of my edge around the way I engage with founders is the particular set of experiences that I bring to the table. So if I was going to make a career out of this, I wanted to make sure that that was validated. And it was. That made it easier to go out and actually raise the funds because I had already built a track record. I'd already gotten feedback from the market. I was referenceable. And so at that point, I've kind of done the hard part as funny as that seems. And raising the money was relatively straightforward.

Kate: With your current role, what's the most challenging part?

Kirby: Time management. There's stuff that I love doing and there’s stuff that I have to do that I don’t like doing. Which I’ve outsourced most of. But there are competing priorities within the subset of things that I enjoy doing and things that I’m actually talented at. I like marketing. Also, I like meeting with founders. I like meeting with portfolio founders who I’ve already invested in. I actually really enjoy meeting with potential LPs and talking to my existing LPs. But if you break those down into numbers, there’s more than 10, less than 100 LP’s and there are 30 companies in the portfolio, and there are 30 – 50 new companies a month that I meet with. So where am I going to create the survey that I send out to founders and create the article that I publish in Geekwire. That’s the biggest challenge: time management, prioritization so I’ve been institutionalizing against that, creating more process, built more of a software stack for managing deal flow and relationships…

Kate: Will you bring someone in to help you soon?

Kirby: Yeah, it will happen. I'm actually not super interested in bringing someone in remote. I understand that I'm going to have to spend time training someone. I would prefer to do that over an intense month in office, then over a sort of randomized 3 to 6 months remote. I know myself. I’m not great at teaching people to fish. I either need people to be really good fishing when I bring them on the boat, or I would always grab the rod from them. So that’s something I’m cognizant of.

Kate: Do you feel that having children has affected your career is an entrepreneur?

Kirby: I don’t know. Yeah, sure, the same way that having a spouse or having other interests outside of your professional life affects your career. When you’re running a start-up, anything that’s not running the start-up is disruptive to your ability to making the startup succeed. And the asterisk there is if you are mindful and mature and built in a certain way, you can have those outside things be synergistic and get energy from them and apply them to business. But I can tell you that that is a rare person. Yeah, and I’m not that person. I had more success before I had kids as a founding team member than I did after I had kids as a CEO and founder. Correlation does not equal causation. I think it varies but you can see it in the divorce rates of people who found companies and grow them. It’s pretty ugly. Founding a start-up is an incredibly difficult and trying thing. And it's not for the faint of heart. Yeah, it gets glamorized. But it’s mostly just insanely stressful and hard work that you can never turn off and it’s all on you. And it’s probably not going to work out. You’re much better off working for Amazon. So there’s my advertisement for doing a start-up.

Kate: I will let you go and I really appreciate all of the information. It’s really helpful.

Kirby: Of course. And let me know if I can help as you go through your journey.

*Huge thanks to Kate Pollock who reached out to interview me as part of her Women in Entrepreneurship class, and shared the transcript afterwards. Watch out for her, she’s good!

My "How to VC" Links

August 24, 2020

This is a running list of articles I find useful as an emerging fund manager.

Growing a VC

Fundraising Tips and Portfolio Construction

Understanding Portfolio Construction

How Emerging Managers Should Think About Fundraising

Deck Review With Chris Douvos

Fund Recycling for Early Stage VCs

Not All LP’s Invest in Emerging Managers for the Same Reasons

How to Build Back to Back to Back to Back 3x+ Funds

Brokerage Transfer Advice Post-IPO for LP Shares

How to Build a Better Data Room

Does Ownership % Matter?

Inside Information and the Case for Active Investing / Following On

Lessons From Fund I

One LP’s Perspective on Emerging Manager Fundraising

Why Institutional Investors Should Double Down on VC

What LPs Look For in Due Diligence for Emerging Managers

Tips For Fundraising Process Management

Why Invest in Emerging Managers? (Data Driven Case for EM Allocation)

What LPs Care About 3 Years Into Fund I

13 VC Decks That Closed LPs

Common Themes of Successful VCs

Seattle Angel Investor Ecosystem - Founder Survey Q1 2020

July 8, 2020

only 10% raised rounds from angels with zero startup dna

founder referrals are the #1 source of angels

a little less than half of angels added value

risk aversion is the seattle angel brand

Seattle Angel Investor Ecosystem - Founder Survey Q1 2020 - The Comments

July 8, 2020

Here are the responses to the question, “If you could change one thing about the Seattle angel ecosystem, what would it be?”

Not competitive with Bay Area angels. Seem to be shopping for average startups.”
Be more open to higher risk/variance investments.
more external VC funds investing in Seattle
More consumer-focused super angels
Visibility of who’s who
Send them to SF or NY to shadow other investors. Most dont have a good idea of what early stage funding means, that's why 90% of our funding I strategically went out of state
Actually have engaging, visionary angels instead of the current predatory landscape.
More angels. There are tons of highly paid executives who don't invest in young companies. They invest in property it seems.
Stop overanalyzing deals and make faster decisions.
More diverse, more risk tolerant, expectations aligned with investment
The Seattle Angel ecosystem is awesome. It’s the VC level that sucks. Maybe large angel groups could partner with out of town VCs?
We need more angels!
Grow it. Seattle could be Silicon Sound, but accredited investors don't seem to be engaged at the level as they are in the bay area.
Bigger checks
Better industry connections
This is a tough question - what's the highest leverage way to make angels here great? I'd like more super angels who make interesting bets and have ex-founders who follow / feed into the super angels? I feel like there are little networks of angels, but they are largely looking for "deals" rather than home runs.
Be open to more risk, take more bets
more outwardly supportive of the ecosystem and all in it even if they are not personally invested in that company.
It's no secret that angel/early-stage capital is becoming harder to get and requiring more milestones for less capital than generations prior. This, combined with the fact that (almost ALL) Seattle Angel investors are (incredibly) risk-averse, contributes to my thesis: because there's an ample (and growing) supply of founders while the demand of investors is remaining consistent, investors are overrun with deal-flow and increasingly becoming more hesitant when pulling the trigger. If I could change one thing, it would be for the integration of other angels from other locales into Seattle's angel pool: specifically the bay. There are a great many followers within the angel community but few leaders with deep pockets who understand the founder experience. Getting more money here from more experienced angels who can make decisions fast is a no brainer and the best shot of invigorating the Startup community as a whole.
Making it more vibrant, more filled with angels. Successful Seattle startup people don't tend to become angles at the same rate as successful SF startup people. We need more recycling of those funds and know-how into the startups here.
Lean more toward risk taking
Please be more supportive of founders who are people of color, immigrants.
More risk tolerant, less sheep like, need more lead angels who can organize a round, too many small checks
Do not charge for any event or service that is related to fundraising.. if a young company is seeking investment, they likely can't afford it.
That it was more visible! If I want to find angels in Seattle, I'm not entirely sure where to look (outside of AoA)
More focus on help and execution vs preaching from years of experience as a lawyer / manager at Microsoft / etc
More people with wealth from big companies like Microsoft and Amazon need to just do it. Stop over-analyzing and acting like it's the World Poker Tournament, and also stop the it's-slightly-inconvenient-to-my-own-horses-Hawaii-2nd-home liftestyle. Show up.
Many seem to be terms/traction before team/product during preseed/seed
Take more risks!
Solution Orientation versus Risk Avoidance Orientation. For example, how it could work, versus why it won't work. Lots of amateurs looking for low hanging fruit. Few pros looking to improve things.
They would take risks. Too many are midwest conservative, but expect silicon valley returns. I'm not a native, but have been in Seattle for 5+ years. I've quit trying to raise $$$ here. It's the land of anti-risk and vision mediocrity. No time for chickenshits parading as angels.
Lower expectations
Nothing.
more consumer
More Angels with actual Start-up experience
more support of co-founders who arent the CEO. All anyone cares about is the CEO
Spend 10 mins when the companies ask you to. Think for 5 mins about who you can intro and write those 3 emails in the next 5 mins
More angels willing to invest in company's early - eg first 100k check SF style
more consumer experience. Seattle tends to be more comfortable with B2B models.
Take more bets without proven model
Easier to get to angels not necessarily affiliated with an angel group.
IMO - the proper angel organizations are extremely conservative and risk averse. The individual investors are where it’s at in the Seattle angel community. The angel organizations acts like VCs - they are very intensive from an information gathering perspective, they don’t respect the time and effort required by the entrepreneur - they also project a “superior” attitude but often times is belittling to the entrepreneur. Contrasting with this, the individual angel community, although difficult to access, is filled with a number of great individuals, who strive to be both helpful and encouraging. It can just be hard to reach these people.
Many of the angels we've met (and didn't work with) think too much like VC's, especially the groups of angels. They emphasize TAM, CAC-LTV, and top-line growth, but don't necessarily take the time to understand the fundamentals of the business, or care about them. And everything looks like (or is measured against the the standard of) a SAAS business. All of that said, the individual angels we HAVE worked with have been amazing, and really do add a ton of value.
More opportunities to access and dialogue with them.
going to groups sign of desperation.
More angels is the easy one (though there are more than many think). Bigger than that is more visibility in the angel/startup ecosystem. We have great angels, but we don't hear enough about them. The result is a lingering perception that Seattle is a laggard in angel investing, which can become self fulfilling at some point. Today there are more checks than stories, so Seattle has a vibrant but hidden community of investors.
We just need more of them. More diversity of operator experience, more network, more points of view and more money.
Should be more willing to take risks
Simply more of them (which in turn drives more funders with a wider range of interest areas and risk tolerance/conviction levels for different business profiles). More with operating experience a big plus, too. Drives the whole virtuous cycle.
No more angel groups where you pitch through committee. Angel investors are the earliest ones to believe in a founder. I believe Angel groups like Seachange, AOA, OVF are really hurting the relationship aspect of angel investment with their process and risk averse attitudes. Some of my most disengaged angels came through pitches at those funds. Some of my most engaged and best angels came from personal, 1 on 1 conversations and relationships that developed because of it.