The 7 Questions Interview Series: Angels and Venture Capitalists

The 7 Question Interview Series is an investigative content series where I seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that “enquiring minds want to know”. There is a twist however to these questions. I provide the interviewee with a hypothesis for each question to help frame and set context for their answer. This specific series of interviews is ideal for startup founders.

Series Objective

The objective of this series is to establish direct connections with VCs and Angel Investors across the globe and ask them the same set of 7 questions regarding investing in technology startups. I’d also like to know what their appetite is for investing in Canadian startups and why they do or don’t.

Interview with Brad Feld, Co-Founder at Foundry Group.

Here’s my seventeenth interview with Brad Feld, Co-Founder at  Foundry Group, located in Boulder, ColoradoBrad is also a Co-Founder at TechStars.

When would it be appropriate for a startup to seek investment from you?

We invest early in the life of companies, but don’t have to be the first investor. As long as you’ve raised less than $3 million, it’s not too late to approach us.

What’s more important: the idea, the team or both?

We have a set of themes that we are interested in. If what you are doing is outside our themes, we pass immediately. Assuming what you are doing fits in one of our themes, then we are focused on three things. First, do we have affinity for the product? Next, are the founders obsessed about the product they are working on. Finally, do the founders want to be long term partners with us and do we want to be long term partners with them.

What are you looking for in a startup team? What does a winning team look like?

It varies dramatically. Ultimately, we are interested in backing founders who are obsessed about what they are working on. We use the word “obsession” specifically instead of words like passion because it’s a particular characteristic that we’ve found differentiates great founders from all the rest.

While we will back single founder teams, we generally believe the best teams are between two and four founders, with at least half of them working on the product.

What are you looking for in an idea? What does a winning idea look like?

I have no idea what a winning idea looks like in advance. The idea is simply the price of admission.

Does a startup really have only one shot?

Nope. Many of the companies we’ve funded that went on to be successful were ones we initially passed on. One of my favourite examples is Fitbit, which is doing remarkably well. I passed on investing after my first meeting with the founder / CEO because I wasn’t inspired enough at the time. A year later, we led the second round. My judgement the year earlier was completely wrong and I wasn’t afraid to acknowledge it. Fortunately, the founders were willing to give me a second chance.

Can you describe your due diligence and investment process? What’s important for a startup to know about it?

It varies by company. I have three partners – all four of us engage with every company that we are exploring investing in. The process could happen very quickly or stretch out over a year. A great detailed example online is the story of us leading an $18 million financing in Moz or more recently leading a $6.5 million financing in Mattermark

In your view, is Canada a fertile ground for tech startups? If so why and in what ways is Canada unique and competitive in this regard? Are you investing in Canadian startups? If so, why? If not, how come?

I believe tech startups, and more specifically great Startup Communities, can be developed anywhere in the world. I’ve written extensively about how to do this in my book Startup Communities: Building an Entrepreneurial Ecosystem in Your City. And yes, we are game to invest in companies in Canada.

About Brad Feld

Brad has been an early stage investor and entrepreneur since 1987. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures. Brad is also a co-founder of TechStars.

In addition to his investing efforts, Brad has been active with several non-profit organizations and currently is chair of the National Center for Women & Information Technology, co-chair of Startup Colorado, and on the board of UP Global. Brad is a nationally recognized speaker on the topics of venture capital investing and entrepreneurship and writes the widely read blogs Feld Thoughts, Startup Revolution, and Ask the VC.

Brad holds Bachelor of Science and Master of Science degrees in Management Science from the Massachusetts Institute of Technology. Brad is also an avid art collector and long-distance runner. He has completed 23 marathons as part of his mission to finish a marathon in each of the 50 states

Social Outposts: LinkedIn | Twitter | AngelList

Chris HerbertChris Herbert is the founder of Mi6. Mi6 is a B2B (Business to Business) marketing and business development agency dedicated to helping companies build their brands and develop commercial relationships. He is the founder of ProductCamp Toronto and the Hi-tech community Silicon Halton. He tweets under the handle @B2Bspecialist.

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