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Steve Schlafman

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19
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2016-08-03
most recent
2016-08-03
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1
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  1. “Yes, I would say that the one that is most recent is a company called Brightwheel, which is a SaaS offering that's powering pre-K education. So if you think about daycare centers, most of these are small and medium-sized businesses. They tend to use paper email in Excel to manage their entire business. They often don't take digital payments. They take cash in check. This is just an insanely antiquated market without a great technology solution. And what Bright Wheel has done is they've basically built out a complete administrative suite for these daycare centers that not only allow them to manage the end-to-end business, but also provide communication tools so that the teachers can communicate directly with parents and that they”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “To gain a mental. It's a good question because it's something that, as I said, been top of mind. I think there's two ways that I've done it. One is just building relationships over long periods of time, having people that I can trust and go to. And sometimes these are my peers in the business. And other times it's investors that have been doing this for 20 plus years. But I do think it's a blend. I have actually been more proactive in my outreach lately where I'm trying to actually land a more formal mentor. So this is someone that has been in the business for at least a decade, if not longer, general partner, seen at least one cycle is willing to at least put in an hour a month and sort of walk through certain things, not just about what I'm dealing with on a daily basis, but also things. That are more strategic at the firm level.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “There are a few every day I read Fred Wilson's blog AVC. I love Stratchery by Ben Thompson. I think he's a genius. And finally the Schem where I get a quick dose of news every morning”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Yeah, it's a good question. It's something I've been thinking quite a bit about. The one thing that I don't think happens enough is mentoring and not just mentoring within firms, but also mentoring cross-firm. And so how do even though where what I would consider in some instances frenemies, right, where in some instances where competitors and others were partners, how do we take that dynamic and work more closely together, less around making money, but helping each other deal with some of the things that we're facing as investors?”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Actually, there are three books that I just finished reading last week. One is called Who, which is all around running a highly structured hiring process. The other is work rules by Laszlo Bach, who ran people at Google that talks a lot about Google's philosophy around people and how they hire, train and retain the best employees. And that was really important because I do think that hiring and firing decisions are what really make or break a company. And then finally, I just finished reading leading by Alex Ferguson and Michael Moritz, which was just really phenomenal. And for those of you who don't know, Alex Ferguson, the manager of Manchester United for almost 30 years. And that, to me, was just an amazing book on leadership and what it takes not only to build a winning team in one season, but how to maintain.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Yeah, it's a good question. I think it really varies. I mean, I sort of like opportunities. There's not a lot of people that are occupying the particular product set. I've invested enough companies now where it really spans the gamut. I've funded companies in very competitive spaces such as office services, right? There's a lot of cleaning services managed by Q, brought a very different offering to that market, but you could argue that it's a fairly competitive and fragmented market, at least regionally. So that's an example where there's already an established market. We're betting on someone to come in and really change the way that that service is delivered. But in the case of GIFI, there's not a market. It's a brand new market.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “I think that's a great question, and I do think there are times where opportunities are overlooked. One thing I would say is I don't think it's in that priority around founder product market. Those are sort of the attributes around how we think about our seed program. So it's not based off of a stack ranking. But look, there are plenty of times where I've looked at a seed stage company and I felt as if there was a fairly crowded market or the market was just forming and so it was really hard to separate signal from the noise. And I was completely wrong about it. It's not to say that we're deprioritizing market, like market's absolutely important, but I think our job as a VC isn't to get fooled into thinking that a market is small because sometimes the best ones are the ones that Pure small, but end up becoming fairly meaningful.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Yeah, it's a good question. I mean, look, the beauty of RRE is we do have quite a bit of flexibility because our fund size is 280 million, each partner can invest in anywhere from three to five seed deals a year. The way that we think about our seed program is around founder”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “I remember him talking about the customer experience of when a kid sees a motive and it's the same experience that the food critic and the movie of Ratatouille had when he tasted the rat's ratatouille. The way that he told the story, and I wanted to invest after that first meeting, another example is Giffey, where I've known Alex for a while. We worked together. I just saw Giffey for the first time. I'm like, I love this. Like, I love the product. And this was before they started plugging in to all the various apps. And I knew Alex, and it wasn't even like he came and pitched me. I'm just like, I want to invest. So I think at the seed stage, a lot of it is instinct, both around people and the feel of a product.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yeah, I mean, I think at the seed stage, a lot of it is gut for me. This is a long-term business. So the reality is I'll know if I'm any good at this in another five years. If you look at the early data, it suggests that I have a pretty good gut when it comes to investing in seed stage companies. Time will tell if I have good gut with Series A, but I think seed is a very instinctual style of investing. And for me, I think about the decisions that I've made around gut, just to give you a few examples, right? One of which remotive, which is now pivoted into a company called Zipline, that was a pure gut instinct on the founder Keller Renato, but that was one where I took an hour, hour and a half phone call, and I'm just like, I absolutely love this.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “But it's my job to at least share the different perspectives. Again, my job as an investor, what I realize, and it's something I've been thinking a lot about lately, it's very hard to control an investment. I think as an investor, the things that we can control is the decisions that we make in terms of the entrepreneurs that we back and the markets that they're going after, right? And that are attractive to us. I think that those are the things that are really in our control. My job as an investor isn't to be a control-free after the investment. It's to help educate and partner with the founder focus on building a company over the long term.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Anytime I'm sitting across the table from an entrepreneur and we're discussing this topic, it's something I will educate them on. Now that said, I always explained both sides of it, right? Like if you're going to raise more money at a higher valuation, then there are trade-offs. Sometimes you're taking more dilution. Sometimes you're taking more dilution in order to run faster, right? Sometimes you don't want because you feel like you can hit those milestones without having to raise as much capital and you can preserve more of the company. So I try to help them at least think through it. But at the end of the day, we're minority investors in the company and either the entire cap table is going to decide or the founder is going to decide, especially if it's an earlier stage company. And so it ultimately rests on their shoulders.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, I wouldn't say, and by her, I don't mean that it's catastrophic, but I can think of several companies I've seen both in my time at Lear and at RRE, where a company, they sort of optimized valuation and the amount that they raised. And then when they went out to go and raise the next round, even though the business has continued to do well for a number of factors, including the market changing slightly or investor, the series B investors wanting to see certain kinds of metrics and not having them, they don't get as much of a step up on the last round that they were hoping.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Making the transition hasn't been easy for me, admittedly, just to talk about seed for a second. I really think seed is just pure hustle, right? It's about moving quickly. It's about doing a set level of diligence, but the reality is that there's really very little data to go off of. And in fact, sometimes you're dealing with pre-launched startups. A lot of it is based on instinct. It's based on getting to know the founders quickly. It's about seeing a lot of deals and having pattern recognition in terms of valuation in things like that. Generally, the valuations are within a tight band. So there's usually anyone.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Focusing on seed, we also focus slightly later, series A and Series B. It's been really valuable for me to go from seed investing to more traditional venture investing at the Series A stage, taking board seats, because I like to think it's a much different ball game, Series A and Series B and taking board seats and the commitment that comes with it. And so just to summarize, I'm a little bit of a mutt. I've done everything. I've worked for Fortune 500 company. I've worked for a successful startup. I've worked for a failed startup. I've worked for a seed fund. And now a traditional venture fund. And I should add that my wife is an entrepreneur. When I come home every night, I remove my VC hat and play business advisor and coach and psychiatrists and all the things that are required to support an entrepreneur.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Into what was known as turntable FM. And so going through that whole experience was quite an amazing learning opportunity. And then I remember going to Billy Chason and saying, I really think this music idea is interesting and creative. But frankly, I didn't sign on to be part of an online music business. And I like to joke that I saw the riding on the wall when all of our servers were named after dead online music services. And so I parted on good terms and shortly after I joined Lair Ventures, which was really my first big opportunity in the venture capital business. Got quite a bit of experience into just wrap it up. I've been at RE now for about three years and it's been a really great experience. RE is a little bit of a different beast in that rather than just”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Investment opportunities they were looking at, and that was really how I first thanked my teeth into the venture business, although they didn't have a formal VC fund in about three and a half years into my time there, I had a chance to move back to New York, which was calling me, and I saw the rise of technology. Things were just getting started here. Companies like BetaWorks and Kickstarter and Tumblr, and I just saw the activity and really wanted to be a part of it. And so I moved back. I joined a company called Sticky Bits, which was started by Seth Goldstein and Billy Chason. I was one of the first five employees there. We were ultimately backed by Chris Aka and first round in Polaris and some other really great investors. And for one reason or another, we launched and it didn't work out and we pivoted.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “I had a really unique opportunity to go work for a startup here in New York called Massive, which was an in game ad network where I worked for the COO running a team for her specifically around network projections and ad operations. So we were the team that effectively straddled business development and sales. Shortly into my stint there, I had another unique opportunity that fell on my lap to go work for the Kraft family that own and operate the New England Patriots. And that was just a really unique experience in that they have businesses certainly in sports and entertainment, but also in paper and packaging and real estate development and private equity. And so I was able to help them evaluate businesses across all of those areas of focus. I remember at the time when I was interviewing with them, I offered to evaluate a few.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Sure. So I always like to say I'm a little bit of an accidental VC. I never really intended to get into this line of business. And what ultimately happened is it was just a stroke of luck how I started evaluating companies. But Harry, the reality is I've been obsessed with technology and really video games since I was a very little kid. I got my first Nintendo when I was four years old and I owned every console up through high school. That really started my love for gadgets. And ultimately I was in college and I started my career at Microsoft specifically in their venture integration team. So this was the team that integrated acquisition, their acquisitions monitored all the strategic investments from the dot-com era. And that was really my first taste of the VC business. About two years in.”

    2016-08-03 · The Twenty Minute VC · 20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures · IDENTIFIED FROM THE TRANSCRIPT · source