Scale with Strive Podcast
Welcome to the Scale with Strive podcast - the place where you come to listen to some of the worlds most influential leaders in the SaaS industry!
Scale with Strive Podcast
'Advice for Early-Stage Founders' with Ellen Chisa
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Welcome to the Scale with Strive podcast, the place where you come to listen to some of the world’s most influential leaders of the SaaS industry. 🚀
I am your host, Dylan Hoyle and on today’s episode, I am excited to welcome Ellen Chisa, Partner at Boldstart Ventures!
Boldstart's speciality is partnering with Founders at inception, and today's conversation was centred around advice for Early-Stage Founders when looking to build a company. Some of my key takeaways from our conversation were:
💡 The first steps that a Founder should take when they have an idea.
💡 The specific qualities that VCs look for in Founders when considering investment.
💡 Some of the common mistakes that Founders make when pitching to Venture Capitalists.
Let’s Dive in!
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Watch the episode on YouTube 🎥 – https://youtu.be/OfwrJqPug-4
Connect with Ellen here - https://www.linkedin.com/in/ellenchisa/
Connect with Dylan here - https://www.linkedin.com/in/dylanhoyle-saas-recruiter/
Learn more about Strive here - https://scalewithstrive.com/solutions/
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9:09 Navigating Early-Stage Startup Challenges
20:15 Navigating Early-Stage Venture Capital Relationships
25:05 Building Relationships with VCs Before Pitching
29:31 Market Trends and Investor Resilience
Welcome to the Scale with Strive podcast, a place where you come to listen to some of the world's most influential leaders within the SaaS industry. I'm your host, dylan Hoyle, and today I had the pleasure of connecting with Ellen Kieser from Bold Start Ventures. Bold Start's speciality is partnering with founders at inception, and today's conversation was centered around advice for early stage founders when looking to build a company. My key takeaways from today the first steps that a founder should take when they have an idea, the specific qualities that VCs look for in founders when considering investment and, lastly, some of the common mistakes that founders make when pitching to venture capitalists.
Speaker 1Let's dive in, ellen. It's fantastic to have you on the Scale we Strive podcast. Thank you very much for joining us today. For the listeners out there, ellen is currently a partner at Ballstart Ventures, where she's been for three and a half years a Ballstart specialist in inception-focused investment within the cyber developmental and biz apps type of space, and previously to that, ellen was also the CEO and founder of Dark, where she raised over over $5 million in capital. Ellen, it's great to have you.
Speaker 2Yeah, it's great to see you again. Thanks for having me to chat today.
Speaker 1For sure, for sure. And obviously we had the joys of meeting up in Boston a couple of weeks ago when you came to our event, but I'll let you introduce yourself for the viewers out there.
Speaker 2Absolutely, I'm Ellen. Like Dylan was saying, I'm a partner at Bold Start Ventures. We like to partner with founders as early as possible in their journeys. We're often meeting people even before they incorporate and starting to talk to them about their ideas At that stage. We invest a wide range of capital. We want to make sure people have the right amount to get their company going, and so for some people, they want to stay tight and focused. Maybe it's only a few hundred K. For some people, maybe it's their third time being a founder and they know exactly who they want to hire and where they want to go. And that can be more than 12 million, and we're happy to participate in all of those types of brands Awesome.
Speaker 1Awesome and I guess, taking it back a little bit before Bold Start, obviously you study did studies in engineering essentially start. Obviously you study did studies in engineering essentially, so always been within that world. But we'd love to find out a little bit more around Dark and that story a little bit.
Speaker 2Yeah, absolutely so. Yes, I was an engineer by training originally. I actually went to, at the time, a brand new college called Olin College in Massachusetts, and so I've always been fairly entrepreneurial. It's quite interesting to go to an unaccredited college and try to explain to people why that matters. From there, I did a bunch of different products and engineering roles, and one of the things I kept coming back to is that I feel like everyone should be able to build software the same way. Everyone can write documents and distribute them. Everyone can take imagery. Now that we all have smartphones, everyone can make videos, and so it felt like software didn't really have that equivalent experience. And so Dark was a programming language, and it was a true programming language that enabled people to just write backend code and then have the infrastructure provisioned under the hood. So if someone was writing something for, say, an API endpoint, they would just write the logic they wanted to happen at their API endpoint, and Darkwood deal with all of the API related infrastructure.
Speaker 1Awesome and I guess, like where you are today, there's probably the advice that you can give to founders having been in their shoes and having raised capital and going through that early stage. I imagine one. It builds credibility, but I also imagine you have a lot of empathy for them in their situations.
Speaker 2Yeah, definitely, I feel like it's one of those things when I look back at old emails or old things I worked on during Dark. It's very easy, when you're looking at hundreds of different companies per year and actively being involved with 10 at the same time, to see kind of some of the patterns. And as a founder, you're always very much in your own world and you can be the deep expert in that particular space. But sometimes you don't have the same broader sense of context that someone else might have on the market, and so I think I always try to work with founders and understand both where they're sitting and their viewpoint and how they see their company fitting into the ecosystem, but also kind of help to give them the perspective they might have or bring more options to the table or give them more leverage to apply to the situations they're facing.
Speaker 1And do you see that quite a lot in founders? Because I imagine they can be so emerged in their own world and their own environment that sometimes they'll struggle to see different viewpoints. I imagine it's obviously that's where someone like yourself would come in.
Speaker 2Yeah, for sure, I think a lot of founders especially. We work primarily with technical founders at Boldstart and, like you said, our big categories can be cybersecurity, infrastructure, developer tooling, some other SaaS and enterprise work. We'll see people who want to come in and tell you a lot about what they built and why, and I love having conversations about what people have built. That's really fun. But at the end of the day, if you're thinking about a customer or a buyer be that a CISO, a CIO, a head of engineering they still want to understand what problem you're solving for them, and so you really need to go in and talk about that pain first and understand their situation before getting into like, look at this cool thing that I built. And so a lot of those context conversations are about that, which is like it's not just about what you've done, it's about what will the impact of that be for your customer no-transcript, and this is one of the things I love about the Bold Start team.
Speaker 2We're always looking to work with people that we really like, and we see a lot of founders in the portfolio come back and start a second company and work with us again. We'll see people who are employees of portfolio companies start new companies. But we like to spend time with people once we know them, and, from my perspective, bold Start was an investor in Dark, and so that was how I really got to know Ed and Ellie at Showmic, and I spent a bunch of time with the people who are my partners now, and so when I left, they were like oh, we know, we like working with you. We've enjoyed this experience.
Speaker 2Why don't you come here to Bold Start? And I was kind of like I don't know. I don't know if I want start another company or if I would be more in an operating partner role and helping support the portfolio on product related questions, or I had been an active angel investor. So there was definitely like a chance. I would want to invest more, and as time went on, it just became clear that there were a lot of deals that were a great fit for the Bold Start ecosystem that I found and was interested in working with the founders on, and so ended up deciding to stay on as a partner.
Speaker 1So you fell into it like I guess everyone always falls into something, right. It always happens like that.
Speaker 2I feel like in VC in particular, there's a lot of people who kind of fall into it by just the nature of being around and working on interesting problems.
Speaker 1Yeah, and Bold Start is like an exceptional VC right Sneak, big idea, like such amazing investments. And I guess, for the people out there who aren't too familiar with Bold Start, I guess what's the story of the VC? Where's their focus? Where do they come in at?
Speaker 2Yeah, absolutely so. Bold Start my partners, ed and Elliot, started the fund back in 2010. One of the things I love is that we work in a lot of similar ways to how we would encourage founders to work. So the first Bull Start Fund was only a million dollars. It was 10, 100 paychecks Very experimental for the time and at the time people really weren't doing as much early stage investing. So I think now it's quite popular, but then it was more groundbreaking and similarly, they were based in New York and bringing a lot of enterprise customers to the table, and so that was the original prototype. They then moved that into a $12 million fund two and then fund three, which is the fund Sneak is in, was a $47 million fund. So it's been growing from there and I think the things that have really remained consistent are just this discipline around wanting to be super early with founders, wanting to work with technical founders and looking for people who are solving big enterprise problems.
Speaker 1And I guess, why is that? Why the idea phase? Because, like for a lot of VCs, it's probably the most, that's the most difficult bit. Turning from an idea to inception, to gaining that first funding round, like that is the most difficult aspect. Why are bold starts so focused on that?
Navigating Early Stage Startup Challenges
Speaker 2Yeah, I think we think that's the place where we can give the most benefit to a founder. So, if you look at it, the bet you are making to say, hey, we like these people and we like these market and we don't have to see anything else, that's really having very deep conviction in someone and their ability to solve a problem, and I think our DNA is just that like when we're in, we're all in and we're going to offer to lead the entire round. We're going to offer to take it all. We'll cut back if we need to, but we're going to be in there with you. I think the other thing about that is when you're getting started from the very beginning, you can kind of get things set up really effectively and so we have an entire Notion community where founders can access resources and partners and find great people to work with on the recruiting side, on the hiring side, on the banking side, on the finance side, whatever it is. We'll help people with some of those logistical aspects. But it's also about the other big questions that come up for founders early on.
Speaker 2A really great example, since we're working with enterprise companies, is how do you pick your first three design partners? And so it might be. You're in the position where you're saying, oh, I have, like I'm in the great position of I have a lot of options. But just having a lot of options, you don't know which of those design partners will be hard to get through contracting, which of them will give you the most active feedback, what questions you should be asking. You can ask for a customer testimonial if you can ask them to be a reference for your other leader customers. So really helping people narrow in on who the first three customers should be and getting those relationships built is something we can help a lot on. And then, similarly, we tend to think the best founders come with people they're excited to hire for their team. But kind of making sure that people are going to thrive in the startup environment and getting that going is something we can also add value on.
Speaker 1Yeah, and I think Boldstart sets themselves apart from the resources that they can plug in and like the numerous success stories that they've had over the years and being able to leverage those pieces of experience for for future founders. Um, and I guess it leads us quite nicely into the next bit. So what I think any founder that's listening to this particular episode what their main focus that they should look to get out of is how can we take our idea to an inception to gain in that first funding round, and so on and so forth. So I guess, literally starting from the bottom right. So let's say, I'm a founder, I've got an idea, I've built aspects of the product, like what would be the first steps I need to take to have a successful launch of the business. Yeah, I would say you don't even need to take to have a successful launch of the business.
Speaker 2Yeah, I would say you don't even need to start from building aspects of the product. So I would say you have an idea and I think the first thing you want to do is go about validating that. Other people have that and there's significant pain and urgency around that problem. So, like, a really common way to do this is, people will often be within a larger enterprise already. They'll have built some piece of internal tooling for that company and they'll go oh hey, if I had this problem here, this was a big problem. My team just spent months or years building it.
Speaker 2I want to take that type of problem space and build a company externally around it, and so then you have the validation of like, oh, I have this problem. The thing I would do next from there is find a couple other people who are in similar positions to you at similar organizations and see if they have that same problem and they are also going hey, I really want to be able to purchase that. Hey, I really want to work with you. Hey, I want to be your first design partner. It shouldn't be something where you feel like you're trying to convince people. You want to find a problem where people are going to pull it out of you. We just did both sides and so many of our founders are at similar stages. In March we had a founder's day and a lot of the founders talked about how much benefit they got out of selling ahead of their roadmap. So basically thinking about the direction they were going to go, and then go lining up those design partners who have those problems before they've even built anything.
Speaker 1So that validation piece is like really, really, really important and I guess, how could? So one of the things that you mentioned there is about how can, how can, an individual choose their three design partners and they shouldn't have to sell. It should be genuine problems that that design partner faces. But, like, how would somebody go against validating that? What are the key things that you always teach? Or or, yeah, what are the key things that you say to founders in terms of how to validate that?
Speaker 2yeah.
Speaker 2So I think you want to narrow down on who the people say the ICP or the ideal customer profile, and so I think you want to narrow down on who is it that it's going to use this.
Speaker 2So I think some of the most challenging ones is, since we're working with so many technical companies, I'll get a really talented engineer who will come in and be like I built this thing. Every, every engineer can use it. You're kind of like okay, but like how are you going to know if it's working? If you're getting, like, some feedback from Java developers and some people from Ruby people and some people in large companies, some people in small companies, like engineers aren't a monolithic group, and so you really want to help make sure. The first step is like are you talking to the right people and getting feedback from the right people, and who is your perspective on the type of developer, the type of developer community who gets the most benefit out of the product? I spent that in the developer framework, since I work with a lot of developer-focused companies, but if it's an enterprise, you can think of the same type of user with an enterprise, be it on a marketing team or on a sales team or whoever your group is.
Speaker 1Yeah, and I guess you've done this so many times, even doing it yourself, right? No-transcript.
Speaker 2Yeah, I think a big one is founders will have this misconception of like okay, I'm going to go like sell my first big thing and I'm going to like walk in and talk to a CISO and be like pay me $100,000 for this or whatever it is. There's sort of like this conception of once you decide pricing, pricing is monolithic and it's the same forever and you never change it. Or like you walk in and you try to sell something and your job is to like be the most convincing, and so I think that's probably the biggest misconception about the process, Whereas I would almost think of it much more as like customer discovery, user research, product product marketing, where it's more that you're trying to get in front of the person who you think is your ideal customer and learn as much as possible about the problem, how they think about it and how they talk about it, so you can mirror back with that language as you're working with them and when, obviously, they're working with this design partner, whoever they choose as that first customer.
Speaker 1is that typically something that founders should do for free? Should it be a charge thing? How would you typically advise it from that situation?
Speaker 2It depends. So sometimes what will happen? When you have a company that's solving a very popular problem and people are really saying, yes, this is a huge problem for me, they'll have 200 people come in and say, hey, I want to buy this from you right now. And when you have that sort of situation, uh, you might not necessarily be able to support all of them, especially if you're a small team, like you usually are early on, and in that regards you might say, okay, I'm going to gate this this. And in that regards, you might say, okay, I'm going to gate this. This is either a beta or a private waitlist situation, or I only have slots for so many customers, and that can kind of help you gauge the urgency that people have.
Speaker 2And so maybe one thing you could ask for is like it could be a paid partnership if it's that type of thing. I think that tends to work best in spaces where the customer may already be buying something and sort of a replacement, so there's already budget for the space. It can also be if you're particularly early and you're not sure you've locked on your final direction. Instead of saying, hey, this is going to be a paid partnership, you can say, hey, we're going to have a regular feedback call. Or you can even say hey at the beginning. This isn't going to be a paid partnership, but we're going to write in our design partner agreement that, like year one, this is the feedback period and year two the rate will be this.
Speaker 1And so you have a lot of different levers you can pull as you're thinking about how you want to set those up. Amazing, amazing and, I guess, like as a founder, right. So I'm choosing my three design partners let's say that I've chosen them and I've started to develop the products, and I feel like I'm in a situation where I've been hyper specific with what I'm focusing on, with my niche. I know exactly where my product market fit is going. I know I have now an understanding of like what the narrative and what the roadmap looks like, and I've done it with three design partners. What are, then, some of the next steps that I need to take in order to scale?
Speaker 2Yeah, I would definitely say this is, I think, another one where people will be like, oh, I'll get the first three and then it'll be everyone. And again it's like those things where you always kind of want to be thinking about the next, say 10x, and so maybe it's not even 10 at first. Maybe you say, like, okay, three design partners and they went really well. Now I have this new experiment that I'm going to run for like my next cohort of seven, and then once you have 10, you're kind of going okay, now I have 10 of them, I want to get up to 20. And so I think one thing that sort of changes is in the first cohort it's probably going to be all founder led sales and partnership, where the founder is going out with their unique story as a founder and like that energy they tend to have.
Speaker 2Founders just tend to bring something special to a sales conversation or to a customer conversation. And so you want to get to a point where you have a cohort of customers that's large enough that someone could call up all of those customers and they would hear a consistent thing about the product. They would hear something consistent about the problem they're solving. They would be able to see traits of the organization or traits of other tools they're using, and that would help people come to a more repeatable process, either about the types of prospects they want to be putting in the funnel or about what it will take to close those. And so I think kind of, once you get to that scale of people use, like the million of ARR is like a thumbnail thing. Maybe it's a little bit earlier, maybe it's a little bit later, but, like, once you start to see consistency across the founder sales and in the customer base, that's when you can start to think about building out more of a go-to-market team around it.
Speaker 1And creating that feedback loop is so important, like so, so, so important, and, would you say, it's even more credible when the founder can show how much he cares to the design partners. Like, I'm going to create the feedback loop, I want to be at the forefront of it and I want to hear exactly what it is, whether it's positive or negative sometimes.
Speaker 2Yeah, exactly, and I think that's the thing is, I think, sometimes another misconception no-transcript that conversation.
Speaker 1I guess like, let's say, I'm a founder again and I'm now seeking I've got the idea, obviously, and I'm now looking at which VCs or which investors should I look to engage in order to support us more effectively. And you'll be in a great position to answer this For you, as a partner in an inception-focused VC, what are the specific qualities that you look for in early-stage founders and startups when considering that partnership and investment?
Speaker 2Yeah, this is such a great question. I think another place founders can sometimes waste a lot of time is kind of seeing like oh, I just need to find a VC to fund me. Most VCs have like fairly specific perspectives on what they do and so, like, if I get a pitch for a series A, that's like immediately a no, because that's not an inception deal and that doesn't mean the company isn't great, it doesn't even mean it's not in my area of interest, but it's still not within the core thesis. And so I think a lot of founders will hear stories about people saying like oh, you've got to pitch 100 people before you find the one that works. And I think founders can apply more diligence early and saying like, okay, here's the like small set of people who are the best fit for me and save a lot of energy that way by doing it. And so for me, that's really like when I'm looking at founders in early stage, the first thing is are you actually at inception? And that's pretty easy. The next one is we're all enterprise focused. But it's really about like do I see a large market that exists here today or that I believe, alongside you is going to be a large market in the coming five to 10 years, and so sometimes founders will kind of start from the detail level about what they're doing.
Speaker 2But I think you really need to get the venture investor on board with the fact that there is a large market here first, and then, once someone's saying okay, like yes, you're at the right stage, this is a market, is within the sphere of things I invest in, then you can kind of get into.
Navigating Early Stage Venture Capital Relationships
Speaker 2Here is the new, unique approach and how we're thinking about it. For me, one of the things I look for there and it's interesting because they're kind of opposite ends of the spectrum there's a big vision around the large market and then there's the like, very small detail level of like. Here's the experiment and what I'm going to do in the coming weeks and months to prove one step on the way to the large market, and then ideally, as we continue to dig into the process, it'll kind of being like okay, this is our first hypothesis. If this like holds true, what are we going to do next? And so sort of mapping out the journey of like. You can even imagine a set of dominoes that, like, as you prove each step, you get to a large and enduring company.
Speaker 1And should I have done that market validation prior to coming to someone like yourself?
Speaker 2I think yes, I think without knowing that a market is there, it's very hard to make a credible pitch for what you're going to do. I think a lot of people either validate the market because they've worked in the market before and come with personal experience from it, or they've had some of those upfront conversations. But I honestly think founders just owe it to themselves. If you're going to spend 10 years of your life working on a business, you want to know and you want it to be a venture backed huge business. You want to know that it's big enough before you start raising money and having external stakeholders involved. If you're saying you're going to start a business, that it's going to be more of a lifestyle business not in a pejorative way at all, but just like the type of small business you can run and it pays your salary and your income you don't necessarily need to be thinking about is the market giant, because you don't necessarily need a giant market for that.
Speaker 1Yeah.
Speaker 2Yeah.
Speaker 1So I've now got market validation and I've come to bold start and I'm in a position where we're going to do certain A-B tests to again further validate that market. I'm now choosing my three design partners'm now looking at right. I've got to my first million in ar. I guess the next step obviously from there would typically be looking to plug in some sort of go-to-market resource and, like we all had a really interesting chat about this a couple of weeks ago in terms of like that that first hired to make, should it be the vp of sales, should it be an ae, should it be a rep or what it is like. Different people have different viewpoints on this sort of topic, like what's your stance on that?
Speaker 2it's funny I saw a tweet yesterday about like the enduring bc twitter debates and is your first salesperson a vp or an ae is definitely one of the canonical things we all like to argue with each other about.
Speaker 2I'm definitely on the stage where I think you should usually hire a player first.
Speaker 2I think, like coming out of the founder sales, when you're hiring that first player, they're going to be like working side by side with the founder and they can kind of internalize and build experiences with them, and I guess the exception to that I would say is like this is kind of saying I want the best of both worlds, but if you can get someone who them and I guess the exception to that I would say is like this is kind of saying I want the best of both worlds, but if you can get someone who's maybe at the director level, hasn't been a VP before, is super excited about taking that next step and is really excited to be hands-on with you in the weeds, I think that's like the ideal scenario.
Speaker 2Like I think it's very hard to hire a leader without having them actually want to do some of the like day-to-day selling work. I think the other thing that goes hand-in-hand with. That is, I think, if you hire a leader and they're excited to hire an entire team and then those reps take time to ramp and get to their quota, if you've hired the wrong leader who's hired the wrong team, you might be six to nine months down the line before you figure it out and that's a big, inexpensive mistake. And so I think sometimes having that first hire be someone who's actually in the weeds with you is a faster way to learn and make sure that you're getting the right person in the chair.
Speaker 1Yeah, and I listened to a really interesting podcast about this topic the other day from Shlomik, the other partner at Boldstart. He did a podcast with Ethan, the VP of sales at Sneak, and they were talking about the early days and what happened and I think Ethan and Guy, the founder at Sneak, were going to onsites together and getting involved. So when it obviously switches to you've hired a go-to-market person, whether it's a VP or a rep they're obviously going to be responsible for it. But it doesn't mean that the founder stops being founder-led sales. It's that collaboration piece between that founder and the initial go-to-market.
Speaker 2The best founders I know are still selling all the way, all the way through their journey, all the way through their company going towards an IPO. They are still out there closing some of those big and most important deals and obviously you need an entire organization, but I think founders need to stay close to their customers all the way through.
Speaker 1For sure, for sure, and I want to stick it around. This early stage thing because I think, ellen, it's something where you can really add value for any founders out there like this is like a really interesting topic. So we've obviously discussed about what are some of the steps that founders need to take from inception, but what we've not spoke about is how early stage founders can effectively build relationships with venture capitalists and what they should keep in mind during these interactions. Essentially so, like, I guess what advice would you give for someone who's seeking that relationship and what they should keep in mind during these interactions. Essentially so, I guess what advice would you give for someone who's seeking that relationship and what should they keep in mind?
Building Relationships With VCs Before Pitching
Speaker 2Yeah, I think there's a lot of ways. I think one of the best times, frankly, to meet VCs can be before you have decided you want to start your company. So if you have listeners who are kind of sitting in leadership roles right now in their organization, think maybe they want to be an angel investor someday, they want to be a founder someday, that's the kind of time you can be building a really open relationship with someone else. That can be through doing events in your local community, that can just be getting on the phone and doing a quick zoom or coffee or whatever it is, and I think those relationships can be a little bit more authentic.
Speaker 2I think sometimes what people end up doing is they end up going oh, I've decided to start a company.
Speaker 2Oh, I want to fundraise in two months.
Speaker 2Oh, I'm going to build relationships now, and as much as that gives you a little more time in the fundraising process, that still puts the relationship in the context of like, okay, you've just started this company, you're going, we're thinking about this space and this deal together, which is a little bit different than just saying, hey, I've met you, we are interested in the same technical spaces, we're interested in the same types of companies Like let's start having conversations.
Speaker 2And so some of those like I always love meeting people who are buyers of new technologies and spending time with them from that context. I love meeting people who are excited about a certain piece of technology and maybe want to start writing angel checks and build a relationship in that context. But I think the more you can build relationships with venture investors just authentically by doing other things in the community you're interested in, I think that's a very good way to go about it yeah, and I think a lot of founders probably make numerous mistakes when it comes to pitching to VCs and not having necessarily done the right things prior to building that relationship.
Speaker 1What, what are some of the common mistakes that you see when founders are pitching and how can people look to avoid that?
Speaker 2yeah. So we already covered one of the big ones, which is just pitching the wrong people. Like sometimes people will get me on the phone and want to get me really excited about their new consumer app and I'm, like, I'm happy to like I mean, I try to be a nice person, I'm happy to talk to you and try to give you feedback, but, like I'm not going to have the best consumer app feedback and it's still not going to be within my mandate. So I think sometimes other one can kind of be the like wanting to convince or the arguing problem where a lot of the times you just want an investor who sees the world the same way you do and you're probably going to have some good match between the business where you come in and like people are intrigued and they're asking questions, they want to keep going along with you.
Speaker 2If someone is more hesitant or they say like, oh, I've seen this before, this is how I expect it to play out and they don't have that shared worldview with you, it's unlikely you're going to get them to come around to being an investor in your company by trying to like refute point by point. There's a great article from I think it's Brendan Baker wrote about like the idea of excitement compared to hesitation, and so if you're running into someone with too many hesitations, it's hard to overcome all of them. You want to hit that excitement point first, so I think that's a big part of it, and then I think another one is just when you're the founder, you're the one driving the conversation, and so I definitely would come into a pitch saying like okay, these are the things I want to communicate, and that doesn't mean don't leave space for questions or don't leave space to move into like a more interactive version of the information, but remember that you're the one driving the flow of the meeting and you know what information you want to get through.
Speaker 1Yeah, yeah Makes sense and I guess that's something people can take away. Is that like this? It is a conversation, it is a dialogue, but, like the founder is the person that's driving the idea, you've got to try and get the buy-in. Of course, leave her in for Q&A because they're going to want to ask a few questions and qualify a bit further. But having a direct agenda and set it like you would with any prospect, making sure we know exactly what, what it is that we all want to get out of the meeting, I guess is there any examples you can share? Obviously without dropping names, but is there any examples, if you can share, where things, a pitch has gone really well or when a pitch hasn't necessarily gone very well?
Speaker 2Yeah, I mean, I think it's always a delight, like I feel like when it goes well, you really feel the energy of both people feeding off of each other, and so a founder might say like oh, here's the like, the type of customer I'm trying to sell into.
Market Trends and Investor Resilience
Speaker 2And then the venture capitalists can kind of be like oh, I know someone exactly like that, either with, like, we always try to do this, we try to introduce you to people who are founders within the portfolio with this problem, or people in our network outside. And if I come in and I like hear the problem and I know of someone already who has that, I'm like oh, this is great, I really would like to introduce you to this person who could be a potential customer. And for me, even if that like, even if it ends up not being the right fit with Bold Start, if I've managed to introduce a customer to an early stage company, I think that's a great win for both of us. It's like that's the sort of thing that makes a pitch feel really effective is when we can kind of end up in that place together.
Speaker 1Um, you've got to have one where it's gone bad.
Speaker 2I really want one where it's the worst thing you've ever seen oh, there is a a trait some people will have where I think it's.
Speaker 2I think it's definitely a nerves thing and you never want to be down on people just because it can be a scary situation to go and ask someone for money, especially for the first time. It can be challenging when someone won't pause at all. So I've definitely been on calls where we have 30 minutes to get through and like there's not a way to get a word in edgewise, even if you're trying to interrupt, you like we'll try to interrupt and the person will just keep talking, and I think that doesn't really serve anyone well, because if you think about it, if you're a founder, you're trying to get all this information across. But I would hope that every time you talk to an investor, you get at least one thing you can use. Maybe it's not as great as a customer introduction, but a piece of feedback or a question that makes you think about something differently, or a parallel to another business or a partnership idea, like I would hope that there's enough space for both people to contribute, so the founder ends up with value too.
Speaker 1Yeah, and it helps build that resilience as a founder, because I think there's always that there's that corny phrase where you don't lose, you learn. But like I think it's, it's, it's, it's right at that sort of stage. You need to build that resilience because I think why the Jeff Bezos made 67 pitches before he got his first bit of investment. So building that resilience as a founder and it might not always specifically go to plan, but we've got to keep going on. But I've seen it time and time again where people don't stop talking and it's like come on, we're having a conversation here and I guess, moving a little bit away from, obviously, what we've discussed in terms of that idea of a founder getting the idea and inception, I think you, Ellen, are someone who has a very good holistic overview of the market.
Speaker 1You're a technical person by trade, then been a founder, now got the VC hat on. Essentially Like the market shifted a lot over the last 12, 18, 24 months. Like how do you see the market coming into 2024? What are some of the trends that you see this year?
Speaker 2I mean, I don't think you can get away from this in any conversation, but we're definitely seeing a lot of enthusiasm for AI companies, especially generative AI companies.
Speaker 2I think there's certainly some bifurcation there where we're starting to see some really deep, interesting plays, and there's also still a lot of people are kind of out there like this is cool. I'm just going to add it to this random thing and you're like does that software really need this? Like I think any good company should be able to exist as a good company without having a generative AI layer and that should be like a nice bonus on top of it or makes the experience more effective, but there should always still be like a core business and a core pain point. So that's a big piece. I do feel like kind of no matter the economic climate, there's always like really good founders out there who have something they want to build and now is the right time for them and so kind of. We have consistently been seeing some founders, but I do feel like things have been like really picking up the pace so far in 2024.
Speaker 1So you've seen a lot more momentum in terms of you having you having a lot more conversations now than you were last year.
Speaker 2I am, and that's not true across the board. I think it varies partner by partner, fund by fund. I would say last year I felt like things were a little bit quieter than they had been, and then this year they yeah, I just feel like it's really picked up.
Speaker 1Yeah, yeah, I remember when we met the other week you were we the dinner at seven. You were still on the phone at seven, having to go out every now and then to close. So it's good to hear that it's a busy time and obviously we spoke about generative AI and we spoke about AI but those buzzwords within the industry that everyone keeps talking about. But what other product verticals do you see is on the rise? Like what do you see growing over the next few years?
Speaker 2product vertical wise is on the rise like what do you see growing over the next few years? Product vertical wise, yeah, I think we're definitely seeing a lot more kind of deep tech and hardware related risk happening. Um, leo polovets from humba ventures has been writing about that a lot and I feel like there's been more people going in that direction, which has been interesting for sure. I mean, one of the things I like about kind of the bold bold starts focus is like enterprise software is bread and butter. Like every enterprise has things they can be doing better. We can always be making better infrastructure, and so I see that as being like a continual theme. As much as everyone like we're still in a cloud transformation, even as we also get an ai transformation do you mention the the hardware thing?
Speaker 1talk to us a little bit around that. It's not. I'm obviously specifically within when sas and tech, but what's the hardware thing that you mentioned?
Speaker 2oh, I just think, um, historically it was really expensive to build hardware innovation because, if you think about it, you have to do a factory run and there's like a fair amount of risk of are you building custom components or are you buying components off the shelf. And I think, from a lot of the work that's gone into the autonomous vehicle industry and some other places, we're starting to see more fundamental primitives be easy for other companies to build on top of, and so I think we're seeing more of a renaissance there.
Speaker 1Right, ok, so it's going back to the early days, but now things are getting a little bit cheaper and more efficient to build.
Speaker 2Yes, exactly.
Speaker 1Amazing, amazing. Well, ellen, it's been an absolute pleasure to have you on the pod. I think any early stage founder is going to get a lot out of listening to it. You're someone who has a very good overview on the market and I'm sure if anyone wants to follow up with yourself after listening maybe has any questions around trying to get the idea to inception, to series A, then yeah, they'll definitely know where to go after this.
Speaker 2Yeah, please email me anytime. I'm ellen at boldstartbc and easy to find anywhere on the internet.
Speaker 1Awesome Ellen. Thank you very much.
Speaker 2Thanks for having me.
Speaker 1Thanks for listening. I hope you enjoyed today's episode. Don't forget to subscribe and if you want more information about the podcast, head over to our website. Scale With Strive.
