Don’t Congratulate Me For Writing A Check

On Thursday we announced our Series A investment in Managed by Q. Throughout the day, I received countless congratulatory emails and tweets from friends. “Amazing investment.” “Love that company.” “Nice win.” “HUGE CONGRATS.” And so on. On my way home, as I reflected on these kind messages, it occurred to me that I don’t deserve a pat on the back. There’s a long road ahead for the company, and I really haven’t done shit. Sure, I built a relationship with Dan and Saman, hustled to help Q win new customers and key employees, and gave them a generous term sheet. But writing a check is easy. Being an engaged board member and a supportive partner in good times and bad is the hard part. And building an enduring, category-defining company is nearly impossible.

Mark Cuban once said, “the magic in business isn’t raising money but making money.”

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Shuddle: Scheduled Rides for Busy Families

When I was a kid my mom always used to complain how she had to schlep us around town. Often times she had to be in three places at once and finding alternative transportation wasn’t easy.  Not much has changed twenty years later. Talk with any parent today. Many will admit that safe and reliable transportation is one of their biggest challenges. The reality is households are busier than ever and the stay-at-home mom is a relic of the past.  

Last October I stumbled across an article in Recode that featured a new startup called Shuddle. The piece described Shuddle as “Uber for kids.” It occurred to me that Shuddle was trying to solve the transportation problem that has haunted families for decades. Several hours later, the article was emailed around the firm because the idea of providing safe and reliable transportation for kids resonated with the group. Everyone agreed that we had to meet this company.    

The following month, Rebecca Kaden of Maveron introduced me to Nick Allen, Shuddle’s Founder and CEO. Prior to starting the company, Nick co-founded Sidecar, a popular ride sharing application. At Sidecar, he observed many families were using Sidecar to transport their kids. Upon further research, he discovered that traditional ride sharing companies aren’t built to handle that customer segment.  They typically don’t have the right insurance and it’s against their terms of service since passengers must be at least 18 years old. In discussions with many parents, he discovered they don’t trust the existing brands since safety isn’t built into their products. While Nick isn’t a parent, it was clear to me after the first meeting that he was going to build the safest and most reliable transportation product in the world. 

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Why Saying No Is Hard

Being an investor isn’t easy for a number of reasons. But the hardest part for me is saying “No.” I meet hundreds of entrepreneurs each year, and at RRE Ventures we invest in only a small percentage of them. VC’s generally invest in less than 1% of companies they meet. So if you do the math, you know I have to say “No” a lot.

There are countless reasons why we choose not to back an early stage venture. Market size. Wrong team. Bad timing. Competition. Traction. Lack of monetization. Little or no competitive advantage. Outside our expertise. Valuation. I could go on. 

But regardless of whether I exchange a quick email with a founder or spend hours getting to know him or her, passing is the worst. It’s the only part of my job that I truly hate. And it’s not just because I lose the option to invest down the road. I hate passing because my daily work with entrepreneurs has given me a good look into their struggles…what founders sacrifice daily to ensure that their company is in a better place tomorrow than it is today. It becomes personal, emotional…it's only human to feel for the founders who…

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Nail Your Seed Round

Several years ago I started teaching a class on raising seed capital at General Assembly and Skillshare.   I initially created the class because friends and founders were coming to me for fundraising advice and I was answering generally the same questions over and over.  

A few months ago, I realized the initial slideshare that I used for dozens of classes was good as long as there was a voiceover but not great as a standalone guide. I decided to speak with a handful of my students and founders to see what they would want in a v2 fundraising resource.  

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