Speaker Q&A: How to Build the Best Founder-VC Partnership

May I have your attention please welcome TechCrunch senior reporter Kyle wiggers Josh Fabian co-founder and CEO of medify And Caitlin Holloway founding partner of 776 Hey everyone Thanks for attending this Session of disrupt one of the last I Believe Um hope you're enjoying the conference I Know I am it's been a whirlwind Um but it's just great to be here in Person again after three years of Virtual Um there's nothing there's no substitute For it I'm glad to be joined by esteemed Guests here who are going to talk about The VC startup relationship Which is I think a really timely topic Given these um weird Economic Times we Find ourselves in uh you know raising is A little tricky now Um uh Founders are thinking about Venture debt when they didn't before Um I'm sure a lot of questions are going To pour in uh regarding how do you reach Out to VCS how do you negotiate these Turbulent Waters so but let me introduce My speakers to begin with we have Josh Fabian from uh medify which is a really Interesting gaming company and content Company which we'll talk about in a Second hopefully and and fill us in on And we have um Caitlin Holloway who's From

776 a fantastic Venture firm and I think A good starting point would be why don't You introduce yourselves to the audience And just give us a brief high level Overview of you know what you do where You came from so if we could start with Josh I think that'd be sure great sure So I am the CEO of Spotify for better or Worse uh you know and what we do at Modify is we take the best gamers in the World and we help them monetize their Talent uh with their existing audiences Through coaching content and competition And we are series a you know we've Raised just under 35 million to date uh And we're about two years old Awesome and then if you could absolutely So as you said my name is Caitlin Holloway I am founding partner at Venture Capital firm 776. my business Partner is Alexis Ohanian and we also Are two years old so we are a startup Ourselves Awesome well how did you two meet I Think um that gets at the topic today Um uh was was there Outreach involved Um networking maybe Josh you could walk Us through it and I'm sure you'll have Comments to add Caitlyn yeah Um it's actually a little a little bit Of a of a winding story so I'll try to Give it as succinctly as I can Um you know initially before we had any Money at all about

You know I think that First six months or so I reached out Wanting to talk to Alexis but I was just Cold emailing One of thousands I'm sure but it was Later that I actually got a little Smarter about how I was reaching out to Investors and I learned the magic of a Warm intro uh you know and we kind of Cut through the noise in that way Alexis Agreed to have you know that initial Conversation Um with a little bit of a warning of Like I may not be able to do a big check Right but I want to talk uh and that's Really what kicked everything off and They ended up writing a very big check Um but it was it was a very interesting Start for us yeah and is that kind of Your preferred way to be pitched do you Think I'm sure No Um this is actually it's interesting Because like I said you know metaphys Two years old and we are two years old And so this was you know we were growing Up together this is you know we were at The earliest days and figuring ourselves Out and you were at your earliest days Figuring yourself out and um and so for Us we actually Um warm intros I mean that's a deep Topic to get into really quickly so I'm Gonna tread gently just in the the

Spirit of time and in this introductory Opening question but Um that's actually not our preferred Path uh to have initial conversations And so unfortunately when Josh had Initially emailed and Alexis has beaten Himself up about this several times Um it was because we were too busy Building ourselves and the reason we Said we can't write a big check is Because we were still fundraising our First fund yeah and so we met at a Really awkward time it wasn't as if you Know we had an established firm with With a closed fund I mean we were Literally like Having more pitches with LPS than we Were with with potential Founders at That point and so Alexis was doing his Best to manage expectations Um but you know Josh had emailed and um Like I said Alexis like even in the very First pitch meeting was like I'm such an Idiot I'm so sorry it's the first thing He led with actually yeah exactly that's Yeah But uh It was because it had come to us so many Ways that he was like I can't not look At this like I can't not take this call Also the business was incredibly Compelling and um Josh and I were just On a different stage a moment ago so I Apologize if anyone ran here very

Quickly and it's going to be a repeat Story but Um something really cool that mattify Does and I actually think this is if we Are talking about fundraising and a Strategic advantage that Founders can Can use in in their court is Um medify does what they call build in Public and so uh and in fact I should Actually let you you explain it and I'll Tell you why it works sure Um you know so for us I try to make as much public as I can Um in the sense of even our investor Updates you know if you go into my Twitter you'll see in my bio Um you know that we're building in Public and there's a link to our Investor updates and they're public Truly public uh how much we're spending Every month what's going wrong what's Going right sometimes it's very lopsided On which one that is Um but also like in our Discord you know We don't build in slack we build on Discord and our community can see what We're working on when we're working on It they can see our team fighting Amongst each other and we do fight we're Human Um but all of that transparency makes it Pretty easy for investors to get an idea Of What's going on and how it's going

Um so I do think it's an advantage for Fundraising for hiring uh for Journalists uh you name it and it's also Very very different than than how most Companies are building and so uh you Know as Josh mentioned he reached out Cold to to Alexis it went unanswered Because we were busy building ourselves But the reality is is when we had so Many signals that we couldn't not look Um it we also personally had been Following so Alexis and I are both Parents to to young kids who are Gamers Alexis and I are super I was going to Put a qualifier on that I'm not going to I am not very good but I grew up as a Gamer as well and so we had been Following Josh and medify and so the Beauty when we finally did connect was That the the meat and potatoes of the Conversation was actually about our Values alignment and it was actually Around how we want to partner knowing This is going to be a very long term Relationship that we're going to build Over time I mean minimum a decade but But hopefully you know in into the wild Blue yonder because you have a lot of Big work to do and because of that Decision to build in public we already Had you know half of our even more boxes Ticked around the business it was it was Super defensible uh the numbers were Early and really really strong uh I we

Could see and watch their their Community internally and externally Being responsive to things that they Were doing and so you essentially did Our homework for us in that Pre-diligence so by the time we actually Got on the phone call we really were Talking about much much much more Meaningful things for me and for Alexis Are really going to help us make that Final decision around is this the right Partnership for us yeah yeah definitely Um I I there are some questions coming In and I definitely want to get to those But this build in public model is Fascinating to me the idea of like Putting out Um everything you're doing in the open On Discord of all platforms Um and I'm sure like I mean you alluded To this it's great for the investor Relationship right like you're really Fostering a connection there's trust There yeah um so would you mind like Elaborating a bit more on that like Um are you are you honestly just putting Everything out in the open you know like Being fully yeah uh transparent about Road map and and a lot of the internal Things you're working on challenges too Um would love to hear more about the Process yeah I Not everything right like there are There are things that we're working on

That I I would rather jump off a Building than let my competitors know Right I don't put some of those things Out there Um so that we do have some private Channels where we'll discuss Acquisitions we're looking to make and Things that might be very sensitive Um but most things 90 of things uh Especially the Bad and the reason that's Important is no one trusts corporations Anymore I don't trust corporations most Of you I promise don't so how do you Create trust stop looking like a Corporation you know look like a group Of people who really give a and It's amazing how Evangelical your Community becomes because you know Nobody the only thing people like about A winner is their downfall right but Everyone loves an underdog when Everything's out there you quickly Become an underdog because startups are wall-to-wall A lot of people see it You know you don't gotta lie yeah and I'm sure you have you know formal Check-ins and conversations with uh you Know your investors but I'm sure they're Also checking the Discord and and Regularly kind of staying on top of Updates through through there I imagine That's that's just a convenient Channel You can always tell them oh just you Know look at today's chat if you want an

Idea of progress right on a particular Project yes I think something a little Funny about me maybe it makes me look Like a diva but Um whenever and I'm always fundraising Right I'm always fundraising but I Always get the same question from Investors which is can you keep us Updated right send us your investor Updates And I give the same answer every time Which is well that's not what I do we're Building in public you can follow you Can subscribe to our investor updates on My newsletter but I'm not going to send Them to you that's insane I'm not gonna Go to you uh and and that that works Quite well because it allows us to focus On building and keeps the window Shoppers away right just hey you can Watch if you're really interested reach Out everything is there for you to see And it's made our fundraising process so Much easier you know we can start and Then close around quite quickly because It's just one email that we send out to Everyone absolutely Um so I apologize in advance the Questions are going to be a bit all over The place that's the nature of a q a so We might be jumping around topics a tad Um and most of them I think most of them you can tag team They're really addressed to both of you

Um so the first one I think this is Interesting um do you have to be a Technical founder I suppose it depends On the field that's a pretty broad Question to answer But I think there is a VC perspective to Give on that as well as a startup Founder perspective yeah I can give my Perspective uh My feeling is you should at least be a Little technical Um maybe that's a spicy take but I found it incredibly valuable to you Know I have a design background but I Learned front end a little bit of back End and a big part of the reason why is I need to know when I'm being like Someone's bullshitting me you know like How can you possibly build something at An early stage and vet people to join Your team if you have no clue what they Do so you have to have it know enough to To know what you don't know technically I don't think you have to be like a World-class engineer or designer but Knowing a little goes a long way I think my take might be a little Different uh but I but I think we're Going to get it the same thing so I Don't think that you need to be a strong Technical founder Um I think that if you were building a Technology company that means that you Need to have a really strong partner uh

That that has a background and and that Partner doesn't have to be a co-founder Uh they can be a very very early hire They can be a very committed advisor who Actually sits on your cap table and you Have very strong commitments about what Being an advisor looks like Um but if I I believe that if you are Genuinely building the product that you Know needs to exist in this world You can figure out how to surround Yourself with the right people and so For as much as you know you have a Strong design background and you know Enough to kind of like have the sniff Test of like are we there or not you Still are going to call in other people It's not just a one-to-one interview You're calling in other people to Corroborate like this person has the Skills Um both soft skills and and hard skills To be able to to accomplish the job but Those early hires are so critical so so Critical because even if you you are Just two co-founders and you have a Technical co-founder and a non-technical Co-founder you don't have every function Represented and and those are important And so do you need to hire for example a Head of HR as your third hire No but you're going to bring people to The table that can help you know augment That team and cover those bases in the

Right way and so I I would say no you Don't need to be a technical co-founder So long as you are very very self-aware Um and you understand your gaps so that You can surround yourself with the right Team and that could look like a few Different things but if you know in your Heart that you are meant to be the Person to bring this thing to this world Do not let your lack of technical Ability be the things that stops you and I guarantee you the more you start Pulling on these threads of trying to Build it you will gain those technical Skills because you will be so frustrated That you can't get it out of your head Onto the screen onto the paper into your Phone onto whatever the thing is you Will be driven to learn how to build so I think the skills can follow Um but you have to be really intentional In setting it up in the beginning I Actually changed my answer to hers Um Better luck next time Um in a related question Um so this person asked Anonymous again Um very prolific submitter of questions Here Anonymous um what do you look for In founders with no previous business Experience so this might be like a first Time founder someone who's like very new To the whole process Um maybe we can start with Caitlyn

Because I feel like um you have seen This before and you probably work with Some of these folks and what kind of Advice do you give them So no business I wish Anonymous was here Uh because I have a qualifying question Which is no business experience at all So has never had a job so assuming like You know maybe 19 years old didn't go to College never had you know in some cases Never worked at all right like not even A Pizza Hut gig or working at you know The local uh laundromat whatever I'm Assuming That's intense yeah to be honest with With No experience That's a tough tough road to hoe not Impossible but a tough road to hoe and I I think I think I'm going to choose to answer This because they chose not to share who They are I'm going to choose to answer The maybe some experience maybe minimal Experience right so maybe maybe you're In college and you're you're making the Decision to to leave formal education to Go and build something Um or maybe you didn't go to school and You're a few years out but you've had Some uh experience where you're Interacting with other humans in a in a Not school setting I'm going to go there Is that okay that's fine I mean I think

I know I think absolutely no business Experience is probably more rare than Some so fair enough and that would be a More useful answer to the audience okay In my opinion so Like I said I think it's a tough road to Hoe but I don't think it's impossible Um And a tough road more specifically sorry I'm thinking really hard right now it's A tough road to Hove to be a Venture-backed company it's not a tough Road to Hove if you are building and so If you are determined to get that big Big check from a tier one VC firm and You have little to no business Experience that's going to be very hard And so you must either have an Incredible depth of unique technical or Experiential Something to bring to the table to say Look what I have done so I think you Need to show a lot more in those early Days instead of saying I have a track Record or I have these logos on my Resume which I also have a bone to pick With but let's say you know as that's Who you're being compared to it's if you Can't just slide a napkin over and have A doodle of an idea and say hey we're Going to do this and expect millions of Dollars so I think that you have to come Super correct you need to really be able To back up what it is that you're

Building and your ability to bring this Thing into the world what we see more Often are people who are still maybe Younger in their careers younger in Their work experience but have tried and Demonstrated this ability to build learn Try again so maybe not not hitting the Winner maybe not having a history of Previous funding but can come to the Table and say This is exactly why and so um you should Take notes from Josh because in order to Do this not only do you need to show up With something incredibly compelling you Have to be incredibly compelling because You are going to have to have secret Compliments Um because you are going to have to sell The crapola out of this uh to everyone To investors to your early employees to Your customers you have a lot to prove And so in order to do so you need to Really really come correct Like this guy yeah makes sense um sorry To hone in on this but I'm just curious Um you said you have a bone to pick with Logos and resumes right can you can you Yeah can we die pick this bone and I Will moderate my language because I have A lot of choice words Um for any of you who think that you Must have gone to a top-tier school or That you must have worked for one of the You know the Fang companies or or to

Have some real experience on your resume Saying like I am a valid contributing Member of society and I have something To show you I do not care I do not want to see those In fact at our firm we even been Interviewing for our own team I don't Look at resumes I don't look at Linkedins I want to hear your story Um and and because I have a background In HR I was an HR executive for over a Decade Um I'm asking behavioral questions I Want to understand how you show up in This world I want to understand more Around your values alignment your Integrity the people that you have Chosen to surround yourself how you make Decisions I care much more about that Than seeing that shiny little logo and That's that's not saying that those are Are bad or negative but I'm just saying I think a lot of people especially young Builders based on the previous question A lot of young Builders are too afraid To go and try to build because they're Like oh I need to go and earn my stripes Or by working at stripe I need to go and Earn that my my Privilege to be able to build my own Thing Like that don't do that build if you you Know in your heart if you are a builder So do not waste a single second playing

Someone else's game making someone else Money Do it you might try and trip and fail Several times but that experience is far More valuable than I I did a tour of Duty at fill in the blank that's my Opinion yeah I like that opinion thank You yeah thanks for sharing that I think That was useful to hear for a lot of People in the room Um so we don't have a ton of time left About five minutes I think this will be A good one to wrap up on aside from Face-to-face interaction which is like The gold standard obviously what what Technology do you think is helping Founders and investors Network and I Want to add to that how do you think That'll change in the future Um will we be um you know interfacing More in the metaverse or are there some Other Technologies and apps that come to Mind that might help facilitate these Conversations Yeah I mean This is zoom it's Zoom uh you know like Might they live in a zoom world now yeah I think I mean I I've raised 35 million Dollars through Zoom you know like I've Never had an in-person meeting uh and It's convenient why because when I'm Fundraising and they're asking questions That challenge me I write it down you Know I can't if I'm sitting there in a

Meeting with you and he has a question That's challenging I can't like oh hang on So I like being able to do it on Zoom I Prefer being able to do it on Zoom the Metaverse thing maybe I don't know one Day but like it's not there now Probably soon uh like yeah I'm not gonna Put on an Oculus and that's your bone to Pick yeah it's my bone to pick uh but Yeah for me personally it's At the end of the day it's just as Caitlyn said like the thing you need to Get across is Who you are as a person what your story Is why you're uniquely situated to win In a market of people that are probably Smarter than you More Advantage than you uh and you can Get that across on pen and paper if you Need to but for me I don't care too much About the medium I think it's really Just about who you are as an individual Zoom is the best way to to do it for the Most part I you know what I'm I'm super Biased because my firm we we started it Up in the middle of covid and so I Actually have never taken a live pitch Ever and I'm I've deployed hundreds of Millions of dollars in capital and feel Great and and these moments of actually Meeting live after you've worked Together Um virtually for so long they just

Become really lovely like there's I Don't need to drive somewhere to I don't Need to make someone come all the way to San Francisco I mean I I will say this I Know that we don't have a ton of time I'm going to go off on a two second Tangent that we had back backstage I'm So happy to see so many people in San Francisco I love this town I've been Here for over 20 years and it makes me So happy to see people coming here and And be having this deep sense of Community and belongingness it is an Institution to come to TechCrunch Disrupt but you don't need to live here To participate you don't need to be a Builder here to participate you can do That from anywhere in the world and I Really think that the pandemic helped Unlock that and so when we do come Together it's intentional and it is by Design and so every time that I've had The pleasure of hanging out with you Josh it wasn't because we were talking Business and trying to get to the nuts And bolts of the term sheet like screw That too I want to hang out I want to Sit down and have a coffee and ask about Your kids and and see how I can be Supportive of what it is that you're Building so that you can create those Outsized returns like that's the focus And so I don't need I don't need people I'm staying your jammies everyone yeah

Bottom down but like chill I've never Worn pants for a pitch that's not a Single pair is that your secret Um you've revealed on stage now your Secret to raising tons of money I got Some lucky underwear yeah If it works for you then why not Um so it sounds like you both believe uh This is kind of just the new you know mo Like this is just the way we're going to Operate now like you can be distributed And yeah like have those maybe more Meaningful in-person interactions but Otherwise you don't need to you don't Need to get on a plane you don't need to Like go to a board room like you think The level is the playing field yeah yeah Like it's so intimidating to to go into Like a VC's office which is some of them It's just opulent decadence you know and You're overlooking the world you know Right and then you've got to sit down in This terrifying room you're waiting for Them to walk into it's scary but you hop On a zoom call and it's just another Call you know and it feels a little bit More equal and you can show up at your Best without stumbling over your words And being nervous so I I prefer it Absolutely we'll see if it stays yeah I Think it will Um I mean there's so much money in the Video conferencing space now too it has To right yeah

Um we have like 30 seconds left maybe I Can fit in one more question Um that's ambitious yeah let's see can You keep this brief um your answers Um so when should you start talking to VCS for funding um a funding question Because I think like that is also timely Especially given the state of the world Right now Um yeah there's the second part of that Question I'll just ask that one Yeah I'll answer quickly uh one of You've got your story together uh at the Early stage especially fundraising is Storytelling you do not have a business Stop pretending like you have a business Together what you have is a story to Tell that inspires confidence that maybe There's something here so I I suggest You start pitching once you have a story That is worth telling and then you keep Refining that story as investors are Poking holes in it right I think Perfectly told because we're out of time Perfect sorry to cut you off but what he Said yeah thank you so much for being on Stage with me and uh enjoy the rest of Your disrupt everyone thank you everyone Thank you