20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 18 March 2019
⏱️ 25 minutes
🧾️ Download transcript
Summary
Mike Hirshland is the Co-founder of Resolute Ventures, one of the leading pre-seed and seed stage funds of the last decade having recently announced their new $75m Fund IV. In prior funds they have the likes of OpenDoor, Mixmax, Greenhouse, AppZen and more incredible companies. As for Mike, prior to founding Resolute, he founded Dogpatch Labs, the community which helped launch over 350 companies including Instagram. Before Dogpatch, Mike was a partner with Polaris Venture Partners from 1999-2011, where he was the original seed investor behind Automattic, Q1 Labs (acquired by IBM for $600 million), Quantcast and KISSmetrics.
In Today’s Episode You Will Learn:
1.) How Mike made his way from a legal clerk in the US Supreme Court to founding his own venture firm in the form of Resolute Ventures?
2.) What does Mike mean when he says Resolute invest at the "old seed stage?" What stage of development and traction are the companies at this stage? Why does seed investing out of a $Bn fund not make sense to Mike? What are the acceptable vs unacceptable risks at this stage?
3.) How does Mike think and assess portfolio construction today? How many lines in the portfolio is enough to be sufficiently diversified? How does Mike think about ownership given his thesis on diversification? How does Mike assess his own price sensitivity today? How does Mike think about loss ratio within the portfolio today?
4.) What are the ideal attributes of the founder/VC relationship to Mike? Is it right for the investor to also be friends with their founders? What can founders do to really build and deepen relationships with investors both during and outside of official fundraises? Where does Mike often see founders making mistakes here?
5.) How does Mike think about the right time to establish a board? What does Mike advise founders in terms of board composition in the early days? How does Mike look to build a sense of "board intimacy" with his founders? Why does Mike believe that there is a "counter-productivity to boards at seed"?
Items Mentioned In Today’s Show:
Mike’s Fave Book: A Little Life
As always you can follow Harry, The Twenty Minute VC and Mike on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | We are back for another week in the world of the 20 minute VC with me, Harry Stebbings, at H. Stebbings |
| 0:04.6 | 1996 with 2Bs on Instagram, and it would be great to see you there. You can both suggest questions |
| 0:09.6 | and guests for future episodes there. However, to our episode today, and one of my favorite |
| 0:14.2 | sayings in venture that I'm a big believer of is always, your fun size is your strategy, and that is so aligned to the thinking of our guest today, |
| 0:21.9 | and so I'm so thrilled to welcome Mike Herschland, co-founded at Resolute Ventures, |
| 0:26.1 | one of the leading pre-seed and seed stage funds of the last decade, |
| 0:29.6 | having recently announced their new $75 million fund for. |
| 0:32.8 | In prior funds, they have the likes of Open Door, MixMax, Greenhouse, Apps, and many more incredible companies. |
| 0:39.1 | As for Mike, prior to founding Resolute, he also founded Dog Patch Labs, the community which helped |
| 0:44.1 | launch over 350 companies, including the one and only Instagram. |
| 0:48.3 | Before Dogpatch, Mike was a partner with Polaris Venture Partners from 1999 to 2011, |
| 0:53.8 | where he was the original seed investor behind |
| 0:55.9 | Automatic, aka WordPress, Q1 Labs, which was acquired by IBM for $600 million, |
| 1:01.9 | quant cost and kiss metrics, just to name a few. I'd also want to say huge thank you to Lindel |
| 1:06.8 | Eekman and the team at Foundry for the fantastic introduction stay to Mike. Lindel, I really do so appreciate that. |
| 1:13.0 | But before we dive into the show state, a lot of what we do on the 20 minute VC is talk to |
| 1:17.1 | experts, pick the brains of founders and investors who tell us which trends to watch out for, |
| 1:21.3 | offer tips on fundraising, and teach us how to excel at any company stage. |
| 1:24.9 | There's no playbook for building a great business, but we can certainly |
| 1:27.7 | learn from people who've done it before. Beyond listening to this podcast and talking to mentors and |
| 1:31.9 | advisors in your own network, it's important to have resources you can turn to when you're |
| 1:36.0 | tackling a new challenge. Stripe has built those resources for you, whether you'd like to learn |
... |
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