YouSaid · the spoken record

Mike Hirshland

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22
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2019-03-18
most recent
2019-03-18
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1
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podcast

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  1. “Where we can chase it. Final one. What's the most recent publicly announced investment and why did you get so excited? There's a New York-based SaaS company that we just recently invested in. And for us, it was just a classic example of two young first-time founders who we just think have the right stuff and really got down compelling. And so it was very much of a founder-led decision. Mike, as I said at the beginning, I heard so many great things from the team at Foundry. So thank you so much for joining me today and many exciting years ahead with Resolute. Thank you. It's been a lot of fun.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I read about a year and a half ago and it's nothing to do with tacker business. It's a novel, first time novel by the author whose name I'm forgetting and it's a portrayal of humanity in all of its essence and frailty and the characters and personality was the most moving book I've ever read. Attribution important or it brings more harm than good? Yeah, I think not so important. You know, I think for us we like to think of everything as a partnership. I think there's responsibility as the point partner on a deal to be making sure you're the one waking up thinking about it. But that's a little bit different than attribution and I'm not as concerned about attribution. Price sensitivity, how do you think about it, Mike? A lot. For our model, we're looking for companies that are early and where the valuation is in a band that will allow us to get our 10%. And so we're very sensitive to price and there's a lot of deals that are great opportunities, but it's that they just get priced at a price.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Able to start to build an institutional LP base. We're happy enough with how things are going that they wanted to continue in the next fund. For me, both funds one and fund two were rather challenging. Listen, I love the openness and transparency. What would you most like to change in the VC community today? You've got a magic wand. Yeah, great question. You know, I think what it would be would be just clarity on who really is investing when. As you said earlier, there's lots of confusion right now that's a seed, what's a precede, what's a post seed, what's an A, what's a small A, what's a big A. And too often everybody says they do all of it. When in fact there are very few investors, VCs, who really are interested in pre-traction. So I think there's just a lot of confusion in the marketplace in terms of who really wants to invest when and clarity around that and transparency around that would be awesome. What book must I read, Mike? I would say there's a book called A Little Life, which”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Where lots of people are sharing their own opinions on something, but it's not that critical decisions are getting made quickly and crisply. Do you understand exactly what you're talking about? I do, though, want to finish with my favorite element, though, Mike, being the quickfire round. So I say a short statement and then you give me your immediate thoughts. Are you strapped in and ready, Mike? I'm strapped in and ready, yes. So raising our fund is a challenging exercise to say the least. What's the most challenging aspect of raising the fund? Well, I think that raising the first fund is by far the most challenging thing to do. And if you don't already have a track record in a similar construct, then creating a narrative that's very compelling that you're going to have a track record, I think is the critical thing. And that's very challenging. Can I ask, does it really get much easier with the second fund? From personal experience, I would say a little bit easier with the second fund, but it's really the third and fourth funds where I saw it get much easier. And that was because I was.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Haven't seen a lot of that in my time adventure. In terms of the boards that you've been on and boards that you've witnessed and especially boards at seed, when we chatted before, you said there's an element of counterproductivity to boards that seed. Can I ask, what did you mean by this and how are they counterproductive? Well, it's kind of what I alluded to a minute ago. First, it ends up the board meeting leads the founders to dedicate amount of time preparing for the board meeting and putting together the right deck and doing the analysis. And so that I think is oftentimes overdone. And then board meetings themselves, they're typically three or four hour affairs and you have, you know, the investors there. Typically these days, the VC will bring along a junior associate who's kind of their sidekick and helps with various things. Everyone kind of wants to be heard from on everything that comes up. And so you end up having these not very productive”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “On the founder's time. And so during the seed stage, I really personally prefer there not to be an investor-led board and really just to work directly with the founders to help them get to the next level. My partner, Fred, often talks about how important it is to build an element of board intimacy almost once the board is established into that kind of engagement process with the board itself. How do you think about this? And have there been elements that have worked well for you in terms of building that kind of board intimacy? To be brutally honest, not really. I think it's tough. You know, I think the board management dynamic is a little bit of a tough one to build intimacy into. I think, I suppose, if the founder really picks the right investors and has the level of outside of the board, has the level of trust connection and authenticity with the individual board members, I think that would be the thing that would contribute to kind of highly functional intimate board context.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “A board? Well, I think it's around the Series A. I think when you're raising a Series A level amount of capital, I think that the investors have an understandable interest in governance. And as a company is starting to mature and build out its organization and its management team, I think a board can also be very valuable. In addition to governance, kind of helping an entrepreneur think about building a senior team. But during the seed stage, it's a very, very different exercise. And I think too often having a formalized board, an investor-led board during this heat stage brings a lot of the trappings from the posteries A board dynamic into the seed stage where there's some degree of formality, there's fair amount of preparation that goes into board meetings, and there's a lot more discussion around things that come up because everybody around the table wants to be heard. And it ends up being a drag.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “gut elements. If we take it one step further though, we mentioned the element of boards earlier and kind of preference to be at less formative stages. There's always a lot of debate on boards seed stage. When do you think is the right? Time”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “I think in many instances, yes. I think founders with good reason want a very fast process and they want to get back to work and are sometimes inclined really just to get the best deals as quickly as they can and get back to work. I would personally advise our founders when they're going through a process and therefore by inference founders coming to us not necessarily to build a lot more time into a process, but to really take seriously the fit with the investor and to reference investors, talk to other founders they've acted and ask probing questions and then just kind of see how you feel interacting with this investor and see what your gut's telling you. Yeah, absolutely no.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I think I absolutely think there can be. But I would also say sometimes it's your friends who have to give you the toughest news. And I think as investors, there's a difference between the phrase that's become tossed about a lot being, quote, founder friendly. On the one hand, which means that you're always going to be yielding to the founder and supporting what they want and want to do versus having both a friendship and a very authentic relationship where sometimes you need to tell the founder what they're screwing up or really be fairly direct about things that you think they need to change. In some instances when pay need to change be the change.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, the way I like to sum that up is I'd say our aspiration is to be the first call for a founder. And that means lots of different things in different instances. It means when something tough is going on going wrong, that classic, oh shit moment, we want to be that first call. The founder feels supported, feels comfortable enough in our relationship that they wouldn't hesitate to share the really bad news. Similarly, when that huge deal gets closed, we love being first called. And to the extent that Renan and I can develop the kind of authentic relationship with our founders where it's not always going to be touchy-feely, you know, lovey stuff, but it's going to be authentic and they can trust that we're really in the boat with them. I think that's what we aspire to.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Yeah, so we pretty consistently end up, each fund has a portfolio of 30 to 35 companies. And I think we are very consistent in terms of our initial check, which we think is critical in terms of getting to 10% on that first check. And then we're, I would say, combination of vigilant plus creative in terms of our second and third checks, being able to really build up our ownership position and not necessarily waiting until the classic VC rounds to do that. There are many, many, many instances where it will be interesting to a founder and interesting to us for a company that's starting to break out to have more capital to really invest in growth. And they're not quite ready to go raise that A. And those are classic opportunities where we see to invest more, get more ownership, and at the same time really help fuel the company to accelerate its growth so that it can raise all the more compelling venture round.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Dollar fund. And I think that was largely successful in allowing us to get what we want in terms of ownership. Not 100%. And I think the evolution of Resolute 1 to Resolute 4 has been fairly modest steps to try and get it just right, to try and have enough capital really to have double-digit ownership at exit of our best companies, but not more than that. So we can really maximize the multiple of the fund. And so we've kind of built up in terms of fund size, but pretty gradually really trying to seek that optimum.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “It's something I've seen kind of across the business. It's not something that we've practiced, I think. Resolute was started with ownership really being a pillar of our strategy. And when we look at fund one and we have our handful of companies that are the superformers, I'm really thrilled that our ownership in each of them is very strong. And as a matter of fact, when I raise Resolute One, I initially raised $25 million. quite frankly that was because that's how much I could raise. But after getting about a year into the deployment of the fund and executing the ownership strategy and the follow-on strategy became very clear to me that a 25 million dollar fund couldn't execute the ownership strategy that I set out. And so went back to my ALPs and said, we really need more capital to execute this. So we ended up bringing in another 20 million and being a 55 million.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “The other companies tend to be mostly zeros or a whole bunch of them are small, modestly successful returns. It's really going to be driven by that core group of companies that are successful and your ownership in them.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Quite honestly, we don't think about loss ratio, which I suppose in some sense might be the answer that it's less important to us and is likely going to be higher. Honestly, when those conversations come up with LPs, I tend to be very direct in that we really don't worry about loss ratio. And if that is an important evaluation criteria for you, then we may not be a good fit because that's not how we operate at all. My mentor in the business from Polaris, John Flint, had a saying that I always remember, which is you can only lose one times your money. So, you know, losses are limited. And really for a seed fund, for a sub $100 million seed fund, if you end up having a handful of companies, four or five, six, seven, that truly are venture scale returns in the hundreds of millions of dollars or more. And you have strong ownership, you know, approximating 10% in those companies, you're going to have a fantastic fund altogether independent of whether”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, so obviously product market fit is an acceptable risk. The way I think about this oftentimes is we really are looking to back teams that we think are exceptionally strong around product, product development and product management.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Yeah, so what I meant by that was really pre-traction, I think. Today it's become rather conventional for seed funds to be looking for early indications of traction and there were for companies that are mature enough to be in market enough to show traction. RMO, what we really like to do is to be backing teams we fall in love with with ideas that we fall in love with and just that. And so we really do not necessarily look for traction at all. Now in some instances when companies approach us, they happen to have had traction, but our model and really our preference is to go before traction and really be thinking about the team and the idea.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “My own sea fund, and kind of what it would look like and how we would work. And from that morning forward, I just charged forward.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Yeah, so you know, I had a 12 year stint at Polaris and lots of great stuff. The highlight of that really was my work creating and building dog patch labs, which was towards the latter end of my tenure at Polaris. And I realized that was really what I loved, was spending time with entrepreneurs in the very earliest of stages, sometimes even before they were clear on starting a company and really spending my time doing that in contrast to, and we can talk about this more later, sitting at board meetings. The other thing that was becoming clear to me is the challenge of doing really early stage seed investing out of a billion dollar fund in a very large platform. And so, you know, I just was, I was becoming more aware of what I really loved and consequently more aware of some of the challenges of doing that from that platform. And quite literally, Harry, one morning I woke up and I just had this clarity that I was going to start.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “And by the end of those two hours, something clicked in my gut and said, that's what I want to do when I grow up. And so I carried that around with me for the next couple years in DC. And then in 1998 decided it was time to make that jump. And I bet the folks at Polaris and ended up there and coming to Boston.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Well, there's actually, those are two different questions. My transition into venture. And then 12 years later, my founding of Resolute. So my decision got into get into Venture. I can pinpoint to a very specific moment. It was in the mid-1990s, probably 1996. And believe it or not, at the time, I was a lawyer for the U.S. Senate Judiciary Committee in Washington, D.C., and we were working on hearings around antitrust in the high-tech world in Silicon Valley, and specifically around the browser wars, which were quite the rage in the mid-90s. And as a result, I spent a bunch of time in Silicon Valley and just chatting with a whole bunch of people across the industry that really understand it and get a sense of what was going on. And one of my early meetings was with a VC who I'd never heard of, and his name was John Door. And I had the opportunity to spend a couple of hours with John learning about VC and the industry where the internet was going.”

    2019-03-18 · The Twenty Minute VC · 20VC: The Acceptable vs Unacceptable Risks To Take When Seed Investing, Why Loss Ratio Is Not A Consideration & Why Series A Is The Right Time To Establish A Board with Mike Hirshland, Co-Founder @ Resolute Ventures · IDENTIFIED FROM THE TRANSCRIPT · source