YouSaid · the spoken record

Guy Turner

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26
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2015-07-22
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2015-07-22
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  1. “Most recent investment we made that is public was a company called 250 OK. They're based in Indianapolis. It's a seed investment of ours. And they are in the email deliverability space. And the reason why we said yes is really twofold. They have several of the industry's utmost experts working at the company. It is an industry that's gotten stodgy and ready to be disrupted. And because of one of our partners, we have extremely strong level of expertise in the space.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I'd probably point to our portfolio company Geofedia, which is just on a complete tear and has blasted through those five milestones that I described of first sales, multiple sales, renewal, and then building a sales organization in far less than a year. But of course, you can also point to big public stars like Box and Slack and so forth.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Okay. Yeah, we're probably a quarter, a third the way through. It's not, you know, so it has, it's not completely on the horizon, but ag tech is going to be a hugely disrupted industry. And of course, we've got a big bet there with farm logs. But the other one is logistics. You know, logistics is a giant industry. Everything is moving around constantly, and that's only getting more and more true as home delivery becomes very ubiquitous. And so we're seeing a lot of opportunities there that at first strike you as being not so sexy, but then when you consider the size of the market, get pretty interesting.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “So there's a book called Thinking in Time, and I won't remember what the author is. And it's about how historical analogies provide strong guidelines to making decisions in the present and in the future, and also to how analogies can be broken down in very often don't apply. I think as a VC, we see a lot of analogies that people make between their business and someone else, some giantly successful business like eBay or Facebook, or nowadays you hear, it's Uber for this or Uber for that. And so often those analogies don't actually hold when you dig into them. And this book is basically about that.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “That's a boy, that's a good question. Favorite book and why? I would say, you know, right now with two little kids, it's probably go.go because it gets my kids to sleep really fast.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “You know, we tried to provide feedback. Unfortunately, feedback can be a little bit of a double-edged sword. And so I think one place that I'm trying to be better at is ask for the invitation to give feedback. In other words, I shouldn't assume that someone wants my feedback and probably no venture, no VC should. And it's always best to ask for someone's permission to give them feedback. But we do try to give it because sometimes there's very obvious feedback that an entrepreneur could get that could have a big impact on their ability to raise or their ability, more importantly, to be successful in their venture. And the bottom line is we want to see entrepreneurs be successful. That's why we do this.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Look, it's like any type of selling. At the end of any meeting with a VC, you should be looking for next steps and commitment on those next steps. Most of the time, there won't be that kind of commitment. It'll be something like, let me talk to my partners or let me think about it or things like that in any type of communication such as those is basically a no.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Yeah, I think you should assume you're getting rejected until the check shows up. So I know one multiple time-backed venture CEO who says it like that. Now, obviously, that's kind of hyperbole, but the question is, are you seeing a heightened level commitment happen relatively quickly? And that means you have a first meeting at the end of that meeting is the partner or associate, depending on who you're talking to, saying, hey, I want to get you in front of my partners. At that partner meeting, do they ask for specific information and delineate next steps? So for example, we want to look at your customer data and crunch numbers on that. And then if that looks good, we want to invite you to a partner meeting. And then if you go to a partner meeting, are they saying, okay, we're going to have two days and then we will either issue a turn shooter or not. In other words, commitment at the end of this, I mean,”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “You know, I think there are a lot of amazing stories out there about wildly successful first-time founders. And that's, you know, people are willing to take that bet. I mean, when you see a Facebook and you see a group on and companies like that that have gotten so big with a first time founder, you know it's possible. There's a lot of work that goes into that from those founders to learn very, very quickly and to be really flexible to new situations and to bringing in great talent. But that's all part of the game.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I don't think that there's one right way to do it. The one wrong way that we're pretty conscious of is we typically will not invest in a founding team that does not have a strong technical co-founder on it. Other than that, you can imagine a bunch of different mixes where sometimes it's a strong technical co-founding team that very early on brought someone with strong sales expertise to the table. Sometimes it's a founding team that has the sales expertise built in, et cetera.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “That quote unquote sold themselves like Dropbox and other self-service software products. But in reality, most companies that sell software to businesses, they actually have to sell it. The product does not sell it sells. And so we look very carefully on founding teams for a strong sales capability, a strong sales background. And that's something we learn a lot about in the get to know you process because, of course, selling is a really important part of fundraising as well.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Yeah, that's a great question. So, our number one rule in startup sales, and when we evaluate a company is that the sales cycle has to be much, much shorter than the funding cycle. And so generally for a company that is raising $18 to 24 months of runway, we don't like to see sales cycles that are any longer than three to four months. There's a lot of reasons for that, but the simplest one is if you imagine you have a sales cycle that's six to 18 months and you have an 18 month runway, the likelihood is you're going to run out of cash before you ever sell anything. So in terms of going into an investment, we look for sales cycles that tend to be three to four months long. And then the other thing is, you know, it's really critical to have a strong technical founding team. And of course, there are stories abound of companies that have built products.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “So, I think there's a way to attenuate the hype, which is by maintaining a personality of the executives that doesn't believe their own press. In other words, a company can have lots of hype about it, but if when the executives and CEOs and founders are out in public, they are humble and reasonable, I think any sort of acceleration of the hype beyond the performance of the company doesn't have a negative impact on the reputation because the executives are seen as being mature and thoughtful and generally backable people.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I do think so. We see that particularly in financings when companies that at one point were very high on the hype curve and as I like to say were hype is really ahead of performance where they need to suddenly raise more money and they actually go in front of investors and investors are let down by the actual results because the hype is so exceeded what's actually happened at the company.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Years back, who had a very, very young founder, and he was kind of the press guy, right? He was always out there. But then there's also local hype. And I think local hype matters a lot because ultimately you raise money locally. You hire people locally. And often you get customers locally. And I see that hype as being engendered largely kind of in word of mouth based on your hiring, based on how your employees speak about your company. And so having really strong culture, a really strong talent pipeline and active hiring is one of the ways that you build that hype. But obviously, in the end, it all comes down to traction.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Yeah, that's, I mean, there's different types of hype. I think there's kind of national hype or broader stratospheric hype, which is largely driven by PR and getting coverage. And we've seen some companies be very good at doing that. A lot of the times it depends on how interesting the story is. So to give you an example, one of our best companies, Farm Logs, has had a lot of attention and a lot of kind of stratospheric hype because it's in ag tech, which has become a pretty hot space and it's an incredible story because it's too young farm boys who went out and started a software company that's become a big success. And so they get a lot of coverage. So one way to get that stratospheric coverage is to really have a story that's exciting for people. And another great example in the Midwest was Groupon.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “No, I don't. I think investors really want the extra buffer. Investors want you to be successful and are typically willing to put a third more money to work to double the chances of the company being successful. That's literally what it comes down to. And as a founder, the math is fairly simple too. You take a third extra dilution and yet you double your chances of success.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “If you're in an unfortunate situation and only having 12 months runway, the problem is that you literally only have one shot at the apple. So you've got your plan A. If that doesn't work out in six months, maybe you try a plan B, but then you can't go raise capital in time for your 12-month cash out.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, no, absolutely. So 18 months runway is what we consider being the minimum that a startup should raise regardless of stage, whether it's a seed stage or whether it's a series A or Series B. And the reason is that you typically have a plan designed going into that raise. So what you plan to do with the money and what that will lead to in terms of if you're a B2C business downloads or usage and if you're a B2B business revenue. But what we see so many times is that the first plan you try, the plan A, is not successful. And unfortunately, if you work backwards, if you want to close around 18 months from now, you have to start raising it about 12 months from now. And if you want to start raising...”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “You know, I think in business to business software that that would be kind of a tough rule because we do see a lot of situations where a specific piece of software is developed for one customer with a pretty specific need and that getting beyond that one customer to a lot of customers is a pretty hard step. Now I certainly think if you sell it to one customer, you can sell it to one, two, or three more, but I think selling to many more is an important milestone and by no means a foregone conclusion.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Can you train a salesperson to go do what the founders did and sell that product? If you can get through those four steps, you know, you've generally got a business that has got real product market fit and that is approaching a stage where it can scale.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So we are primarily B2B software investors at Hyde Park Venture Partners, so our greatest measure of product market fit and value proposition is fundamentally revenue. And so for us, it's primarily revenue, but that means a couple things. So in the earliest stages of a startup, that's can you get someone to pay for your product? And then it's can you get more than one someone? five, six, seven, ten, fifteen, a hundred customers, depending on your price point, to really prove, hey, you didn't just build this for one person or one company, you built it for a bunch. And then the next measure is, can you get those people to buy it again? Can you get them to renew? And at this point, these three steps of first revenues, multiple revenues, and then renewals are often driven by the founders themselves. And the next step...”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Yeah, I mean, I'm certainly not the originator of that idea. I think lean startup methodology has become fairly commonplace in the institutional knowledge and practice. But the biggest thing is you just fundamentally time is money, that your time is really the oxygen of your startup, and that's all defined by how much money you have. And so you cannot kind of die on the sort of ideas that don't work. And the teams that we see being successful will test strategies, put a boundary on how long they're willing to spend on it without it being successful, and then move on to the next thing. And that's measured in weeks and months and a successful startup, not in quarters and years.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Well, you know, I think the part of engineering that's transferable to investing and both looking at investments and also managing an investment portfolio is the problem solving part. But I think that's a fairly abstract leap. Certainly I wasn't a software engineer, probably should have been given what I do now. The consulting work was probably a little bit more transferable in the sense that as a consultant, you spend one to one to four months at a time looking at an industry and hopefully learning just enough with just enough of a different viewpoint than the company you're working with to provide some value and unique perspective. And that's very much what I do on a daily basis with the investments we make and the investments we consider.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Many awesome investors who ended up backing us. And in mid 2011 started investing or late 2011 started investing full-time.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Yeah, you bet. I started life off as a mechanical engineer and worked practice for about five years making an assortment of different products. And at one point, you know, realized, boy, it would be awesome to know more about who I'm making these for or why and how they're sold and really to understand the mechanics of all the other parts of a business besides the engineering. And so I went to business school and had the fortune of interning for an angel group in Chicago called Hyde Park Angels. And around the time I was graduating, had spent about a year by then investing actively in building a relationship with the guy who ran the group named Iro Weiss. And the two of us decided to raise a fund. And of course that takes some time. So I worked as a consultant for a few years while the two of us had many, many, many meetings with many.”

    2015-07-22 · The Twenty Minute VC · 20 VC 056: The Life Cycle of Startups with Guy Turner, Partner @ Hyde Park Venture Partners · IDENTIFIED FROM THE TRANSCRIPT · source