Vasu Kulkarni AMA: Cupcakes, Root Beer, A $35M Fund, A Startup, And Plenty Of Basketball

Courtside Ventures

Here’s where it gets good! Tell me where to find better advice than this and I will give you… (nickels? I think thats the expression? something about nickels right?). Anyway, if you are looking to connect with the venture community. Which you should be looking to do…

“frankly, I recommend that every entrepreneur have some sort of deep tie to the VC community helps you get to see a lot of stuff that’s happening in your space that you wouldn’t otherwise get access to” — Vasu

 

… What better way to connect with the community then to actually BE “the community?” As an entrepreneur himself, if he weren’t the managing partner of Courtside, he would be coming to himself to raise money for Krossover. Think about that for a minute. I know, super meta. In the dog eat dog world of fundraising, being on both sides of the table gives you a rather unique perspective…

“if you haven’t had a chance to really dig in operationally to running a company at 2 people, at 20, and then at 200, you really don’t know what it’s like to walk in an entrepreneur’s shoes and so I hope I can bring that empathy to the process” — Vasu

So here we go, the stage was set…

“What’s one misconception that most people have about VCs?” — Igli Panariti

… Get it Vasu! Tell us why you are different from all of those other heartless, dream crushing VC’s out there.

Igli set him up for a homer…

“I’d say in my short time, I can’t tell you how many deals have come across my desk. I’ve been at this for 4 months now, I’ve probably seen AT LEAST 500+ deals, and people somewhat filter what they send me.

so when people think we’re saying no because they don’t have a good business or because we just don’t want to do a deal, you gotta remember a few things

1. We need you more than you need us

VCs don’t make money if we don’t invest

so we REALLY REALLY want to invest money

we’re not trying to hoard that cash for something else down the road hoping that the next uber comes around

2. The economics that we are playing with as a VC don’t necessarily align with a founder or an angel investor

Let’s look at my $35M fund for example

I make $0 until I have returned all $35M of that money to my investors

I have about 25–30 bets that I can place to make this happen

let’s say I’m investing $1M at a $10M valuation on a company

I own 10% of the company, and over the course of a few more rounds, let’s just assume I put more money in and maintain my 10% ownership

let’s say the company sells for $30M

great outcome for founders

I make back $3M

that’s not even 10% of my fund, and I am assuming that 33% of my companies will fail, 33% will maybe return some money or even money ….

which means that I really need to believe with all my heart that you’re actually going to sell this thing for $300M and if I don’t, no matter how much I love you or your business, I have to say no

3. VCs constantly say “you’re too early”

that’s really just code for “I don’t think this business is going to return my fund”

I bite my tongue every time I want to say that to an entrepreneur because there is nothing I hate more

the truth is, we REALLY want to be early

that’s the only way we can place smaller bets and somehow make the economics work

So if you hear that, it means they don’t believe in the model, or they don’t believe that it can be big enough

4. VC’s know what’s right: Trust me on this, we don’t really know shit.

early stage investing is throwing a dart at a wall and praying

although we need to filter down as many companies as we possibly can before we throw that dart to try and better our chances of success

Phew!” — Vasu