Takeaways

• Never burn a bridge / maintain your relationships. During Wise Apple, he pitched to 1000 investors of which 900 said a straight no. Instead of cutting them out, he stayed in touch with each of them and focused on building relationships with them - those have been useful to him in his VC career now. Also remember, it only takes one yes, so ignore the other 99 nos.
• Culture is who you are when others aren't looking. Similar approach to relationship building as a VC. It's easy to get caught up in work and forget to reply to emails / let them get lost. But always reply. Never just say no - give a reason. Be honest and transparent. The world is small, getting even smaller.
• Investing during COVID: Product > Founder. Since we can't meet founders, it's even more imperative to fall in love with the product and have 100% conviction. For CPG, both brand and product are key. Brand needs to grab attention and product needs to maintain attention.
• Best founders have a strong human element. Our best portfolio founders have strong family ties, hobbies, life outside the startup. Need to be a well rounded person. Zoom is giving new opportunities to understand founders - observe how they react when a family member walks into the room / something goes wrong on a call. I have a 6 week old baby I have been holding while on calls, and how founders react to her is interesting.
• High valuations for early stage companies. Founders get excited when they get needlessly high valuations in early rounds. Heard of some founders who got a $50m post money for a pre-revenue company. That's just setting yourself up for failure. Chances are you can't grow fast enough to justify that valuation and you will either have a down round or a poor bump up. Investors expect 100x bump ups.

Notes

About the fund and 'funder':

1. Barrel Ventures is a Seed & Series A stage fund in the Midwest, US. 'House' is a portfolio company. Their most recent investment was Arctic Brewing, a non alcoholic beer in Canada which mimics beer and is Keto friendly.
2. Nate Cooper - Founded 2 hospitality companies (3L and Wise Apple). Now looks at Food and Beverage / Hospitality investments at Barrel. Grew up in a family involved in the F&B sector.
   • The end of Wise Apple. We were going ahead with a strategic investor. A few hours before the promised wiring, they abandoned us and left us with the legal bill. Bankrupted us.

Building Relationships:

1. Who you are is what you do when nobody is looking.
2. While building Wise Apple, we spoke to 1000 investors, of which 900 turned us down. We took the approach that we will still stay in touch, even though they called "our baby ugly". Today, that has benefited me. Today those VCs are close friends. Never burn a bridge.
3. It's easy for VCs to ignore / forget emails, but those actions become your reputation. World is small, getting smaller. People always connected. Texts and emails can be misconstrued. Give people a reason if you say no. Be honest and transparent.