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Chris Farmer

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24
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2016-11-30
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2016-11-30
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1
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  1. “So, probably the most recent one is a company called Frame.io. This is a company that's in the media collaboration space. So things sort of drop box for media collaboration. I love the company from the first time I met them. Super scrappy founders with deep domain experience. They had really bootstrapped the company extensively and had just really found a resonance with other people in the media community. And I felt like there was big macro tailwinds to sort of away from these sort of centralized media organizations to much more of a distributed model of freelancers working, as you've seen with blogging and what you do. For example, in many ways is sort of attacking traditional media.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I'm trying to build a firm that I always wanted as an entrepreneur and the support and the advisors and the resources that I could never have. And so we want to become the indispensable partners to the most ambitious founders. I mean, we really aspired a revolutionized venture capital industry in the way that our founders are doing in their own industries. And so it allows us, I think, to stay sharp from an entrepreneurial perspective, but it's really fulfilling to feel like you played a meaningful support role in helping entrepreneurs to be successful.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “I read a smattering of anything, of everything. I just really try to get lots of perspectives from different folks in the industry. But if there's one sort of person I think who does a really amazing job, it's probably Bill Gurley and above the crowd, a combination of a really rigorous analysis and market insights. And sort of I really enjoy reading his work. He does an awesome job.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “There's a lot of wonderful people in the venture industry, but there's probably too many people in VCs in the industry who sit on the fence and don't have the conviction themselves to make their own decisions without pure validation. And so there's some awesome entrepreneurial investors that really get in there and support companies. But I think there's also many more people around the industry that fence it too much. And I think it's very frustrating to me as a co-investor and it's even more frustrating to entrepreneurs as they try to sort of battle their own markets head on. It's frustrating them to try and get the right support in the venture community so they can fuel up and fight the good fight.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “The most recent book that I've read that I really loved was The Success Equation by Michael Mabasian. It's a fascinating look at how to untangle skill from luck in a number of domains such as sports, business, and investing. And it's just sort of amazing to look at sort of the serendipity of life and then what parts of it can be deconstructed and really understood and repeated. And so I always love looking at the world from a little bit more of a rigorous analytical approach. And that book really sort of hits squarely in the center on that.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “I'm a serial entrepreneur at heart. What I learned was I loved particularly the ideation and the product sort of market discovery process more than I like the sort of long-term operational elements. And so that's what ultimately drove me to VC. And so I love the thrill of working with inspiring founders to build a lasting company and that sort of discovery process of finding their market. And so my wife says that it's borderline obnoxious that I almost skip to work each day that I'm not supposed to be having this much fun. But I really get a thrill out of the sort of challenges and the ups and downs of entrepreneurship and really being able to be a partner and supporter of inspiring entrepreneurs.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Of entrepreneurs, or they'll fade away. And I think data and technology plays a key role in that much of the same way that sort of Airbnb and Uber are using technology to take sort of antiquated analog models in their respective industries and really streamline the consumer experience, make it more efficient and a level of support that is sort of unprecedented before technology was applied to these contexts. And we're doing the same thing in venture capital fundamentally.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “How we help them build the business as they should. And so a huge part of the emphasis for us is on how we help entrepreneurs to build their business, to accelerate their growth, to make better decisions. And so from my perspective, data is information and the right types of data can help you make better decisions. The good news is that data can also help our portfolio founders to make better decisions. And that's really where our emphasis is. So when you look at, there was actually a recent CB Insights study of like who would you most want to lead your series, hey, and it's the first rounds and the Google Ventures and the Andreessen Horowitz of the world that are doing some of the more innovative things here. And our plan is to sort of take these things to the next level. And so I think the old guard VCs are on notice that they have to make meaningful investments in better support.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “When I look at data, though, I would probably look more to what angel list or social capital or Google Ventures has done. Social capital is doing some interesting things with data around growth hacking with companies and helping to sort of accelerate their growth while simultaneously better understand their business in order to effect better investment decisions. In the case of Google Ventures, they're using a lot of data and this sort of network of people within the Google organization to try to bring in-house expertise to their portfolio. And what we're doing is much more along those lines or what first round has done, you know, building a common platform for peer-to-peer support within the first round community or what Angelist has done to sort of streamline the syndication communication process. We're much more in that sort of realm than we are sort of in the realm like a quant hedge fund. No entrepreneur gives a shit what algorithm we use to find them. They care about”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yeah, well, I have a lot of respect for the sort of pioneering approach that correlation has done, but honestly, we're at opposite ends of the spectrum, right? We lead every deal. They specifically fill in rounds. We're a very high touch of value add operationally driven company. Our data is all around operational elements of the company, whereas theirs is much more around the sort of round syndicates and what that sort of dynamic looks like. And so we're very high touch comparatively”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Not waiting for the company to come report to us on a quarterly basis at a board meeting. We're having much more degrees of interaction on a regular basis. And then over time, if we do take board seats, we actually bring to bear not just our own investment team has heavy operational experience, but a network of over 50 advisors and will actually underwrite those advisors, in essence, as venture partners so that you get this sort of specific expert operational experience to sort of complement the generalist blockade and tackling that we support as a venture fund. And so that allows us to scale up dramatically relative to the traditional closed architecture.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “At the seed stage, we don't take board seats. Frankly, I think that the cycle of board interactions is far too slow. We tend to be very highly engaged with our companies. And so we're touching on them at least a weekly basis, if not daily basis. And so, you know, much like the specialization that sort of GM pioneered in the 1930s, we as a firm have done similarly. So we have a talent partner who used to run executive search for Facebook. We have market development partners who come from having to run programs like that at Andreessen Horowitz or run major sales of marketing teams for top venture-backed companies, et cetera. And so we have functional resources in-house for all the sort of day-to-day blocking and tackling, as well as seven full-time people on the investment team. When you add that up, we have 17 people today supporting 13 companies and over 50 advisors, if anything, we're over-resourced relative to the number of companies. But the benefit of that is that we're”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Have this network of 50 advisors available on demand to our companies in every sort of key functional area from technology architecture, pricing, sales of marketing, design, M&A, et cetera. And as a result of that, we have an unbelievably high win rate against the top venture firms in the industry and almost always went head-to-head against the seed funds because typically we're competing with two guys and a dog and we're bringing an army of resources to companies and not taking any incremental equity or economics as a result of that. And so we're built to scale not just from the sort of C to A stage of things, but over the entire arc of the life cycle of a company. And you need a lot of technology and resources to do that. And we figured out how to make that work.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I think in the seed weight class, there's few, if any firms that frankly can come close to having the same sorts of resources we have. We have 17 full-time people, over 50 advisors around the firm. You know, we've really taken great efforts to architect the firm around the specific pain points that entrepreneurs have. For example, it's not just about building technology for finding and monitoring investments, but it's as much about helping our companies with competitive intelligence, with data insights into operational elements of their business, and the sort of critical task of recruiting key executives in the best engineers. So, you know, in the research we did interviewing over 500 founders, recruiting was the number one pain point of almost all the founders. And so we put massive resources into this area going so far as building a proprietary SaaS recruiting platform from scratch. And we're also in process of building a talent agency in-house. And so we offer senior support in market development, growth hacking, data science.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Be sort of a $5 million valuation anymore, but now you're at $15 or $20 and you don't want to go raise $10 million and sell a third of the company in order to get one of the bigger VCs on board. And oftentimes a few million dollars will take you another year or two out and allow you to hit a number of more milestones. So in essence, founders have the option to raise money based on sort of smaller milestones of the amount of runway that they need, allowing them to raise money based on that rather than driven by what large VCs need to deploy capital wise or a percent of ownership in the company that they need in order to make the economics work for them. So this has really caused the major funds, I think, to drift away from their roots of sort of being that sort of foundational investor. And they've become much more momentum investors versus sort of the initial partner that a founder has from inception.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I think we've seen a substantial evolution that continues to happen. And so it used to be the companies would raise a series A at inception, and then they'd raise a series B after product market fit and a series C for expansion. Then around 08, seed investing started to institutionalize, driven by capital efficiencies from open source and cloud computing platforms like AWS and the distribution channels like the app stores and social networks. And so then Seed became the new A and everyone else sort of shifted upstream a notch. And then the A round followed Seed, a sort of typically post-product market fit and then so on. This phenomena continues to shift as the seed funds have now grown to often $100 million plus funds. So now there's often a pre-seed round of an incubator or friends and family or even a preseed fund investing before the quote unquote seed round. And then on top of that, now there's a postseed round often is emerging as an alternative to raising a full series A.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “To enable discovery, competitive intelligence, contextualization, collaboration, and ultimately support of our portfolio companies. So we look more like Uber than we look like Mattermark in that sense.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “I still believe in heavily in human-in loop systems, and so we're not trying to assess the quality of the founder using data. What we use the data for at the seed stage, you still have to do all the traditional venture capital blocking and tackling. But we use data for context on what's the strength of competitors, how fast will they growing, those types of things. And we use technology at the seed stage to understand that a company exists. And we use it to sort of track down and then pursue those opportunities. And then we use technologies to streamline the diligence process, the collaboration between our network of advisors who are all deep domain experts and can often serve as references for those founders on how gritty, determined, and effective they have been in various roles that they may have been in the past. It's a misperception that what we're doing is actually trying to use data to score a company in that sense. That's not at all what we're doing. We're using technology.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “World class engineering team that you would typically only expect to find at a company like Google. And so today we have 17 full-time people on the team and we have more engineers and data scientists than any”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “There's been a say in VC for years that VCs rely on patent recognition, and it's all about lines, not dots, yet we do all this in our heads, seriously. It makes no sense to me. So some firms have begun to dabble with data, but almost none have serious efforts in the area. So it's mostly window dressing at best. So we at Single Fire decided to, you know, after years of focused work, that it was obvious that this wasn't about hiring a data scientist and you couldn't expect to make meaningful inroads that way. There are very few good structured data sources and no stock prices or anything to anchor on. So we don't even know that a company exists. So it's fundamentally a distributed systems and unstructured data problem that requires a full-blown engineering effort with highly specialized knowledge in NLP, particle physics, search, and artificial intelligence. Almost none of these skills exist in almost any venture firm. So we invested heavily to build out”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Yeah, so for the most part, the way most VCs do business has barely changed since 1970. So while they all claim to be value-added partners to entrepreneurs, few hold themselves accountable or measure anything other than financial returns. And almost every major firm still fundamentally structures themselves like a money management firm. And so the irony is that VCs invest in cutting-edge technologies, yet they barely use more than spreadsheets in the CRM, which is to me is insane in this day and age. And so as VCs, we manage networks of relationships, entrepreneurs, executive, angels, capital, and corporations, but we use the same sorts of technologies like we don't use any of them, like Facebook or LinkedIn, pioneered to more effectively manage our own networks. And manual support doesn't scale. So VCs often become absentee and just show up for board meetings of that as companies mature, especially at the earliest stages where they don't have much resource. So it's amazing to me that we don't use technology to help us scale at all.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So I hired six researchers for a year in 2009 to study precisely that question. We interviewed over 500 founders and 170 funds from seed to bioge and every major venture fund in between. And we just deconstructed everything over 10,000 companies. You know, some of the key insights that we ultimately used to create SignalFire. And so instead of creating a traditional venture fund at that point, I partnered with General Catalyst to launch GCC'd and then join the firm as a venture partner where I built the early foundation of SingleFire on the side. So it was a long journey. Once I convinced that it was convinced this crazy idea might just work, I spun out in 2013 and went all in to launch Signifier.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Basis as an associate. And so we pulled together a small angel fund where I made a few investments in companies like Applied Semantics, which you know today as Google AdSense and a company called Skybits that would be in the sort of industrial IoT SaaS category. And so after the bubble burst, I joined Skybits to help them navigate the downturn and ended up running almost every non-engineering role at the company at one point or another, really learned how to build a business, played a key role in growing the company from pre-product to about $35 million in revenue and $5 million EBITDA before we sold the business and then went to Bain& Company and tech private equity before sort of finally settling back into venture capital at Bessummer Venture Partners where I covered consumer mobile. And so after a few years, I felt that VC was outdated. So I left Bessemer to study one question. If you were to strip a venture curve down of the bare metal, we were to recreate a firm from scratch, how would you build a next generation?”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Got it. Well, it's a bit of a winding path, but I'll try to give you a brief rundown. So I was born in London and lived in a number of countries growing up, including Bahrain, Spain, France, et cetera. But my family ultimately settled in California when I was about 11. I was a serial entrepreneur growing up. I started little businesses, not so much companies, but I knew I had sort of the entrepreneurial bug very early. From college, I went to the classic venture capital hotbed of Tufts University and the Fletcher School of Law and Diplomacy, where, of course, all of ECs come from. And there I wrote my thesis on internet marketplaces in 1996. At that time, I discovered this sort of strange world of venture capital, which I'd never been exposed to before. And basically ever since I've been planning to launch a venture fund. So right out of school, I worked in venture capital group on Wall Street, which I quickly discovered was very different than Silicon Valley. So I came back out to California and started supporting Angel investors on an ad hoc.”

    2016-11-30 · The Twenty Minute VC · 20VC: Why There Is A Revolution In VC, Why Boards Are Inherently Inefficient & Why Data Will Be Central To VC In The Future with Chris Farmer, General Partner @ SignalFire · IDENTIFIED FROM THE TRANSCRIPT · source