Thanks to everyone who sent a note to me in the past few days about the shooting in Boulder on Monday.

10 people murdered in a city of 100,000 people, in a place that I love where I’ve lived since 1995, is an extremely difficult thing for me to process.

On Monday, Amy and I were shocked. On Tuesday, we were both shaken and stunned. The emotions really hit us both on Wednesday.

Last night I went for a long run with some of my favorite childhood music (Pink Floyd). I listened to Dark Side of the Moon, The Final Cut, and half of The Wall before getting back home. I sat in the hot tub for 30 minutes and then went to bed. I woke up this morning feeling a little calmer but still unsettled.

Some of you have asked if there’s anything you can do. The Boulder County Crisis Fund is the best choice. The Community Foundation: Boulder County is partnering with others to support the victims, their families, and our community in dealing with and processing the March 22 supermarket shooting in Boulder. Some of the partners include:

9News, the City of Boulder, The Daily Camera, iHeartMedia, The Colorado Healing Fund, Community First Foundation, The Denver Foundation, Longmont Community Foundation, Rose Community Foundation, Boulder Mennonite Church, Community Church of Lyons, Congregation Bonai Shalom, Congregation Har Hashem, First Congregational Church, First UMC of Lafayette, Islamic Center of Boulder and Westview Church.

If you are up for making a financial contribution to help people out in the crisis, please make a donation to the Boulder County Crisis Fund.

The post Processing the Supermarket Shooting in Boulder appeared first on Feld Thoughts.

An Odd Start To My Angel Investing

I started my first company at around the age of 24. It was called Pyramid Digital Solutions and it was a CRM (Customer Relationship Management) company in the financial services vertical. I bootstrapped it, ran it for about 10 years and then sold it to a large software company in an all cash, no attachments deal. Now, I had something I’d never had before -- liquidity. Or in simpler terms -- money. Which, as it turns out is a highly underrated thing (more on that in another blog post). I didn’t make enough money whereby I’d go off buying planes and yachts and such (not my style anyway), but it was enough that I didn’t really have to work anymore.

I did not plan to do another startup. I had done it for 10+ years and lived the notorious startup life. I’d told my wife I was ready to hang up my entrepreneurial hat and get on with the next chapter of my life. To do that, I took the next logical next step:  I enrolled in graduate school (at MIT) working towards an “M.S. in the Management of Technology”. Yep, it’s as cool as it sounds. Kind of an MBA for geeks. I’d always liked school, but never really got to enjoy it and immerse in it, because --- well, that just wasn’t the life I had. Until now. Now, I could pour myself into graduate school and actually enjoy it -- which I did. My loose plan was to get my Masters degree, then possibly get a PhD, and then maybe teach.

My conviction to not do startups lasted only a few...weeks. Best laid plans and all that. 

During classes (which I loved), I missed the startup life. So I thought of an idea: Why not invest in startups? That way, I still get to stay in touch with the thrill of startups, but I could do it vicariously through other entrepreneurs.

Angel investing is like having a niece or nephew. They’re adorable and fun but then you get to hand them back to their parents and go back to your life -- and get some sleep.

My thesis was: I’d get to brainstorm and strategize with the founders, but then I’d get to hand their baby back to them and go back to my (so called) life.

After some quick research (basically Googling for about 10 minutes), I discovered that you didn’t really have to train or be certified to be an angel investor. There’s no skill that was required. There was one simple requirement: You had to be able to afford the risk and that was simply measured by how much money you had -- or how much money you made. So, I discovered that lo and behold, I was a legit accredited investor. So, all I had to do to become an angel investor was to start writing checks.

But, where do I find these mythical startups to write checks to? And, how do I pick them? And, why would they take money from me? As fate would have it, that first year of grad school, I was enrolled in a class at MIT called “New Enterprises”. It was for learning entrepreneurship. (That was not a required course -- I picked it).  During the first week of that class, we all had to do a short pitch of a startup idea and convince our classmates to join our “startup”.  Then, the students would “self configure” around their favorite 5-6 ideas and form startup teams. I pitched a startup called “HubSpot”, which ended up being one of the ideas chosen. Two other ideas that were chosen were “Visible Measures” and “PawSpot”. Both were actual companies (not academic exercises), and I decided to make an angel investment in both of them -- mostly because I really respected the two guys: Brian Shin and Mark Roberge. 

The Entrepreneur vs. Investor Dilemma

During my two years as a grad student, the idea of HubSpot became more and more real. I would get together with one of my classmates, Brian Halligan, and we would noodle on the idea. I’ll save the story of me and Brian for a different blog post, but suffice it to say, HubSpot ended up doing pretty well.  It is now the #1 CRM platform for scaling companies with over 100,000 customers. It is publicly traded with a market capitalization of over $20 billion.

Anyways, back to the story…

I had promised myself I would at least enjoy grad school before "officially" jumping back into a startup and so I held off on officially launching HubSpot until the day I  had my graduation ceremony (June 9, 2006).  I then wrote a seed round investment check of $500,000 to HubSpot. We were off to the races!

Not so fast...

This presented a dilemma for my fledgling role as an angel investor. I’m a big, big believer in focus. And I knew how all-consuming startups can be. So, I figured I’d have to give up the angel investing thing so I could commit myself completely to HubSpot. Presumably, angel investing takes a lot of time -- and I wanted all available time to go to HubSpot.

This was unfortunate, because I liked angel investing. And I thought it could help with the growth of HubSpot too, because I’d learn a lot. And someday, I hoped HubSpot would have many, many startups as customers. [Fast forward to today, HubSpot has thousands of startups as customers, and a special program, creatively named "HubSpot for Startups"]

Ultimately, I came up with a hack which changed everything.

Instead of solving for maximizing my investment returns, I’d solve for minimizing time spent.

If you know anything about investing, you will quickly (and correctly) come to the conclusion that that’s kind of a crazy thing to do. But, if I had to choose between not doing angel investing at all -- and doing it such that I spent near-zero time, I’d rather choose the latter.

So, I setup a weird and wacky set of rules/constraints for myself, all grounded in one simple principle:  Minimize time.

They went like this:

No due diligence. Due diligence takes time. So, I won’t do it. Candidly, at that early a stage, I wasn't sure there was much diligence "due". In most cases, I wanted to deliver a yes/no decision within 24 hours -- and often the same day. I'm just going to write checks.

No calls, no meetings. I’m not going to meet with founders or have phone calls with them. That takes time. I’m just going to write checks.

No negotiating deal terms. I’m not going to “lead” an investment round, because leading a round usually involves helping set the “terms” of the deal (including valuation). And, that takes time and research (and is also unpleasant). Instead, I’ll just make it a rule to accept whatever the terms are that the founders or other investors have decided were “fair”. I just write checks.

No follow-on investments. When startups go on to do subsequent rounds of funding, you often have to choose which ones you’re going to put more money into. That requires due diligence -- which I don’t do. It has the added problem of the “signaling effect”.  For those startups I didn’t choose to do follow-on investments in, it was a negative signal to the market, because people assumed I knew more about the startup than the average person, and if I’m not investing more, it’s probably not a good startup. To remove both those problems, I decided to not invest in follow-on rounds, at all. Professional investors think I’m an idiot because part of the value of making early investments is to be able to “double down” on your winners. But, I’m not looking to maximize return, I'm looking to minimize time. And also, this freed up more cash for early investments in other startups. So, I could just write more checks.

No board seats or advisory roles. That takes time. No accepting “advisor shares” or other perks.  If I'm going to be a user of the product (which I often am), I'm going to be a paying customer. Accepting things for "free" leads to possible guilt for not spending time -- and I was not going to spend any time. Always side with the founders. If ever there comes a time when the founders are making a tough decision involving the investors (like whether to sell the company or not), always side with the founders. If they want to sell. Great. If they don’t want to sell, great. If they want to sell, but the acquirer is putting most of the money into the founders and team and little money is going back to the investors (which happens a lot) -- fine.

Keep startup investments separate from HubSpot. I knew it would be tempting to get companies I had invested in to consider buying/trying HubSpot. It'd also be tempting to get HubSpot to use the products created by startups I had invested in. But, I also knew that would get messy -- and present potential conflicts. Even well-intentioned conflicts have to be explained. That takes time.

You get the idea. Whenever presented with a choice on how I should do my angel investing, I always try to ask myself: What is the option that involves minimizing the expenditure of time?

Shockingly, My Weird, Wacky Way WORKED!

I’m going to preface this section with an important note: DO NOT TRY THIS AT HOME! I am not recommending that anyone try and do what I did. Because what I did was not right.  It just happened to be right for me.

So, at this point, I’m an investor in 80+ companies (this is as of March, 2021).  Since I’m trying to minimize time, I haven’t tried to actually calculate what my IRR (internal rate of return) or even realized return is. But, all modesty aside, I think it’s stunningly high.

Here is a sample of some of my notable investments.

Okta. I was an early investor because I knew Freddie (one of the founders), since he went to MIT too. Today, Okta’s market cap (it’s a public company) is over $28 billion. That ended up being a 300x+ return on investment. Not 300%, 300 times.

If every other investment I had made in the past decade+ went to zero I would still be a super “successful” angel investor on that one investment alone.  (Related note: I’ve committed to Todd and  Freddy, the founders of Okta that I would be donating 100% of my gains in Okta to charitable causes -- thanks again, guys!)  

Dropbox: I have several “batches” of shares because two of the other startups I had invested in got acquired by Dropbox along the way, and I made a direct cash investment as well.  Dropbox is now public, market cap: $11 billion.

WP Engine. A leading provider of premium WordPress hosting.

Life 360: Went public.

Backupify: Acquired by Datto, which then went public. 

Creative Market: Acquired by Adobe.

A few other companies (still private, and growing) that you may know of: Buffer, Help Scout, Drift, Stack Overflow, Gusto, 15 Five, Crayon, Clearbit, Jebbit, Lola, Outschool, Reforge...

Oh, and I’m an investor in Coinbase which has been in the news lately and is rumored to have a valuation north of $50 billion. (Note: this is not investment advice).

Enough bragging. Point is, I did alright.  :)

You’ve Got Questions, I’ve Got Answers

Q: How do you pick which startups to invest in?

A: I tend to stick to what I know (software) and products that I’d use myself, or someone I know would use. And, I invest in people. If you’re thinking: “But wait, you don’t even talk to founders!”. You’re right. I mostly don’t. But, I have a different set of “inputs” (like late night emails). My #1 filter? Seek a low arrogance:accomplishment ratio. I love founders with humility -- and it has served me well.

Q: Why should founders take money from you if you’re not going to add value?

Not all of them should. But, often, they’ll have other investors that want to be more involved -- and provide guidance and help. They require a board seat. The upside to picking me is that a) my money is just as green. b) I strive to be the lowest-maintenance investor on the planet. I don’t ask for a meeting or a call. Or references. Or business plans (yuck!) or much of anything. I won’t blink an eye if this particular startup ends up not working out. I know that’s how things go, it’s part of the game.

Q: How should I pitch my startup to you?

A: Honestly, you shouldn’t. Of all the deals I’ve done, not a single one was the result of a cold outreach or pitch. Especially over social media like LinkedIn or twitter.  I tend to find startups I’m interested in myself. Often, they’re referrals through friends, accelerators like Y Combinator (congrats W21 batch!) and AngelList.

Q: What if I want to be an angel investor?

There are some exceptional resources out there. Look up Brad Feld and Jason Calacanis, they have really great advice and support resources for angel investing.

Today’s book recommendation, for anyone interested in venture capital, is The Business of Venture Capital: The Art of Raising a Fund, Structuring Investments, Portfolio Management, and Exits by Mahendra Ramsinghani.

A decade ago, I got a cold email from Mahendra. He was investing in Detroit and eager to write a book about the art and science of venture capital. At the time, Jason and I were just finishing up the 1st edition of Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist and I was enthusiastic about helping anyone else working on a book that demystified venture capital investing.

I immediately introduced Mahendra to a bunch of Foundry Group LPs, partners, and entrepreneurs. He made progress quickly, and I fondly remember the first edition with the green cover.

Mahendra and I kept in touch. During a book tour for the 1st Edition of Venture Deals, Jason and I visited the University of Michigan. Mahendra cornered me in a hallway and pitched the idea of doing a book together around how a board of directors works at a startup. A few months later, we started working on it.

Startup Boards: Getting the Most Out of Your Board of Directors was released in 2014. Soon thereafter, Mahendra started to work on the second edition of the Business of Venture Capital. Given our recent collaboration, he asked me to write the foreword for the second edition, which was an easy yes for me. The 2nd edition had a blue sky cover and was also released in 2014. In the foreword, I wrote that “VC is a business where each investment teaches you something new – the book provides only a basic framework but each one has the ability to carve a different path in this universe.”

Mahendra recently came out with the 3rd edition of The Business of Venture Capital: The Art of Raising a Fund, Structuring Investments, Portfolio Management, and Exits. It’s now 500 pages and includes much-needed frameworks for culture, diversity, and values that are timely topics when we look at the challenges we have seen in venture capital around gender, race, diversity, and sexual abuse. This time the foreword is from Scott Kapor of A16Z who in 2019 wrote an excellent book on venture capital titled Secrets of Sand Hill Road: Venture Capital and How to Get It.

 

If you have suggestions for the fourth edition, please reach Mahendra at mr “at’ secureoctane.com.

The post Book: The Business of Venture Capital appeared first on Feld Thoughts.

A mass shooting happened at a King Soopers on Table Mesa in Boulder Monday afternoon.

Amy and I are safe. So are our friends and family. But 10 people in Boulder, including one police officer, are dead.

The King Soopers was the one that Amy and I shopped at from 1996 – 2014 when we lived in Eldorado Canyon. I’ve been there hundreds of times. It was at the six-mile mark of my ten-mile run to town. Many friends live within minutes of it, including my brother and his family, my partner Chris Moody and his family, Amy’s current assistant Rebecca and her family, and Amy’s prior long-time assistant Naomi and her family.

Amy’s nephew Jason had gotten his groceries there fifteen minutes earlier. A friend of a board member worked there and snuck out the back. So did a neighbor of my brothers.

Whenever something tragic happens, the quick rationalization is “Well, at least that won’t happen here.” Boulder has always felt incredibly safe to me. I won’t even read a popular crime/thriller novelist whose books are set in Boulder because I don’t want anything to damage my calm.

My calm is very damaged right now. I was going to head out for a long run at the end of the day but couldn’t leave the house. I just sat with Amy, while she doom scrolled through Twitter and texted with friends and family. I ate something but don’t remember what it was. Upon reflection, that sounds a little like a shock response to me.

Last night, an endless set of IMs and emails rolled in checking on us. That calmed my nerves a little, to be loved, but I kept realizing how fragile and arbitrary things are. The phrase “the victims are in our thoughts and prayers” is nice, but it seems so inadequate. We find ourselves in 2021, still in a pandemic, with extraordinary heath, financial, and emotional stress everywhere, and then this.

Boulder has been a special place for me and Amy since we moved here in 1995. Evil showed up in our town yesterday.

The post A Sad and Scary Day In Boulder appeared first on Feld Thoughts.

David Cohen and I recently interviewed Maëlle Gavet, Techstars new CEO. It’s a great way to get to know a little more about her in under 30 minutes.

I met Maëlle about a week before I talked to her for the first time by reading her book Trampled by Unicorns: Big Tech’s Empathy Problem and How to Fix It. I knew I’d like her before we talked, and after almost two months of working with her, I’m psyched she’s at the helm of Techstars.

The post Give First Podcast with Maëlle Gavet, Techstars New CEO appeared first on Feld Thoughts.

Amy and I have been collecting contemporary art since we started dating in 1990. Every morning at our place in Aspen, over morning coffee, we get to enjoy this amazing piece by Julie Maren.

When I wrote the original post, I got a short email from Phi Pham.

I hope you’ll be mindful of collecting art from Black and POC artists too! 

My response was:

We have some, but not mindfully. For example, we are a huge collector of Emilio Lobato.

It’s a good reminder.

Do you have any recommendations for artists in the Western US who are Black or POC?

A few months later, I got another email from Phil with an amazing list that was compiled by Phil and his sister with help from Hannah Leathers and Solomon “Solo” Muhammad,

Phil, Hannah, and Solo – thanks for the great list.

The post BIPOC Artists in Colorado appeared first on Feld Thoughts.

I no longer subscribe to many daily email newsletters, but I’ve kept a few. My favorite to wake up to is Ryan Holiday’s The Daily Stoic.

Today’s headline was It’s Possible to Tune These Things Out but it linked to an older post titled The True Power Behind Stoic “Indifference”.

At morning coffee a while ago, Amy and I had a long conversation about the phrase “I don’t care.” I struggled to explain what I was trying to say and how it was often misunderstood when I said it. Through her reaction and feedback, she helped me better understand what people heard when I said “I don’t care.”

I tried shifting to the phrase “I’m indifferent” instead of “I don’t care.” I continued to feel that I was being misunderstood when I said this. I’d often provide strengths and weaknesses of each option presented but then end with “I’m indifferent.” I knew that this was confusing to some, but I didn’t know why until I read The True Power Behind Stoic “Indifference”.

Of all the loaded words in Stoic philosophy, “indifferent” is one of the most provocative. Marcus Aurelius, Seneca, and Epictetus each tell us that the Stoic is indifferent to external things, indifferent to wealth, indifferent to pain, indifferent to winning, indifferent to hope and dreams and everything else. You hear it enough times and it starts to sound like these people don’t care about anything. Especially since the modern definition of the word means precisely that. But this is a dangerous misreading.

Recently, I got feedback from several people that I was profoundly unhelpful in a particular situation by saying, “I’m indifferent.” I thought about it on a run, which is unusual for me as I rarely focus on one thing during a run but prefer to let my brain go all over the place. In this particular situation, my brain seemed to lock down on the dissonance around this phrase.

The situation in question had two paths: A and B. I had a modest preference for A, but I was good with either A and B. I had explained this, but when asked which I preferred, I said, “I’m indifferent.”

After my run, I explained this more clearly, reiterating that I had a modest preference for A but was good with either A or B. Instead of “indifference,” I stated that I was “tranquil.” After even more reflection, I think a better concept would have been “equanimity.”

Back to the The True Power Behind Stoic “Indifference”.

The Stoics were not indifferent in that sense at all, it’s that they were good either way. It’s not that they didn’t care, it’s that they were good either way. Does that make sense? The point was to be strong enough that there wasn’t a need to need things to go in a particular direction. Seneca for his part would say that obviously it’s better to be rich than poor, tall than short, but the Stoic was indifferent when fate actually dealt out its hand on the matter. Because the Stoic was strong enough to make good of it—whatever it was.

Boom. After reading this, I got the disconnect people were having, which was reinforced by the contemporary view of equating “I’m indifferent” to “I don’t care,” which is very different from “I’m good either way.”

Think of that today, that it’s not about apathy or even a lack of expectation. It’s simply the quiet strength of not needing a preference, because you’re that strong.

Ryan – thanks again for helping me understand myself a little better.

The post What I Mean When I Say I’m Indifferent appeared first on Feld Thoughts.

MBAs have had a bad rep in the startup world for a while now.

This short, fun video I did captures the sentiment -- and also answers the question: Does hiring an MBA into your startup reduce its chances of success?

 

The video shares a story from the early days of HubSpot. 

Here's my advice: Don't shy away from hiring the right kind of  MBAs in your startup. 

What are the right kind? You want the good side of MBAs: The fact that they're analytical, have learned some critical thinking, have likely dug into business cases, can think more strategically, etc. And, you want that in combination with a proclivity to get things done and execute.

The MBAs you don't want are those that would rather spend most of their time writing business plans or forecast spreadsheets (and other works of fiction). Instead you want those that will have animated, well-reasoned debates around hard decisions with tricky trade-offs. You want those that don't just understand the "market" at a macro level -- but understand customers at a micro level.  You want those that will bring a smart, diverse perspective to the table, because they've been exposed to different things -- and have had different experiences than you have.

There's more to creating a successful startup than just building the product. And often, MBAs are a great choice for helping with the rest and putting an operating system in place that will power your startup. 

p.s. I just started my YouTube channel (less than 24 hours ago). I had 2 followers (one of whom is my wife). Will be interesting to see where it winds up in the next 48 hours.

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Two of my favorite men on planet Earth have birthdays today.

Happy birthday Dad.

Happy birthday Dave.

I’ve learned an incredible amount from each of you. And, given all the time the three of us have spent together, from both of you.

One of the best things I’ve learned from each of you is a love of wide-open physical spaces. Dad – I’m so glad you and Mom created Woodcreek Ranch.

Dave – thank you for all the 14ers. I hope to climb many more with you.

Even though we’ve spent a lot of time together as a threesome, one, in particular, stands out. We had a Feld Technologies board retreat in the fall of 1987. I remember the date because it was during the Bork confirmation hearing. We spent the time in New Hampshire, drove around looking at leaves, and talking about what Feld Technologies could become now that the summer of 1987, which was full of missteps, was over. We did a huge reset that weekend on what we were doing, which set Feld Technologies on a path where it was profitable every month for the rest of its life. The other path could have been the death of the company, so it remains a potent and formative moment for me.

Happy birthday to you both!

The post Happy Birthday Dad and Dave appeared first on Feld Thoughts.

Dija, the London-based grocery delivery startup backed by Blossom Capital, Creandum and Index Ventures, has acquired Cambridge, U.K.-based Genie, in what looks in part like an acqui-hire.

The deal, for which terms remain undisclosed, will see Genie founders Tim Chan and Callum MacBeth join the Dija team and also includes company assets. Having launched Genie in Cambridge, a U.K. city known for its university, they’ll be tasked with supporting Dija’s growth outside of London.

Founded by Alberto Menolascina and Yusuf Saban, who both spent a number of years at Deliveroo in senior positions, Dija launched in London earlier this month and is just one of a host of European startups that promise to deliver grocery and other convenience store items on-demand. They do this by building out their own hyper-local, delivery-only fulfilment centres — so-called “dark stores” — and recruiting their own delivery personnel. This full-stack or vertical approach and the visibility it provides is then supposed to produce enough supply chain and logistics efficiency to make the unit economics work, although that part is far from proven.

Other dark store operators include Berlin’s Flink, which has raised $52 million in seed financing in a mixture of equity and debt, and Berlin HQ’d Gorillas, which has raised $44 million in Series A funding and recently expanded to London in addition to Germany and Netherlands. Also operating in London are Weezy, Getir, and Zapp, with Jiffy expected to launch soon. The U.S. unicorn goPuff is also reportedly looking to expand into Europe and has held talks to acquire or invest in the U.K.’s Fancy.

Dija currently has four warehouse hubs operating in South Kensington, Fulham, Islington and Hackney that deliver groceries and other convenience products within a claimed 10 minutes. It plans to open 20 further hubs, covering central London and Zone 2, by the summer. Each hub carries around 2,000 products, claiming to be sold at “recommended retail prices”. A flat delivery fee of £1.99 is charged per order.

In a statement, Dija co-founder and CEO Alberto Menolascina said: “Our ambitions aren’t limited to inside the M25. I’m delighted that Tim and Callum are joining the Dija family to ensure more people can access this reliable and efficient service across the UK and Europe.”

Adds Genie co-founder and CEO Tim Chan: “We’re excited to join forces with the team at Dija and continue our shared mission to bring everyday items to your door in a matter of minutes. For our existing customer base this deal means access to more products, better prices and even faster delivery times. We’ve had a tremendous response in Cambridge so far, and look forward to bringing Dija to many more regions across the U.K. in the coming months.”