The decision to leave Sazze Partners was not an easy one. I have been with Sazze for more than three years and it has been an amazing experience. My co-workers and partners are without equal and I have been extremely blessed to work with a group of rock star founders. Working at Sazze has never felt like work. It is the place where I finally discovered not a career but a calling. While I am no longer a partner at Sazze I am pleased to say that I will continue to work with the founders I brought into the Sazze family and will be taking all of the friends and relationships I've built over the last few years with me wherever I go.
I am leaving Sazze Partners because I believe there is a new (or actually old) way to do venture capital and I wanted to lead a new firm down this path.
At Gelt VC We Will:
Invest with a purpose
Venture capital should help drive positive change in the world. This strategy shouldn't be confused with triple bottom line investing where non-economic factors are considered in whether an investment is a success; rather, this strategy is about finding companies and technologies that have the potential for major impact on society.
While many falsely accuse Silicon Valley of focusing too much on photo sharing apps and fluff, it is true if you are not focused you can find yourself investing in a portfolio of companies offering shiny solutions to problems that do not exist. At Gelt VC we will focus on solving the biggest problems faced by society and in so doing, we believe we will generate outsized returns for our investors.
See http://schlaf.me for a great take on investing with a purpose.
Invest in founders we respect and admire
At the seed stage there are very few signals on which an investor can rely when making an investment decision. The company is likely to pivot several times within a year of investment meaning the data we have at the time of decision is of little value. The one thing we can be sure of is that the founding team will make or break the company.
Given the importance of the founding team we believe in an “Embedded VC” strategy where our investment decisions are based on working side by side with founders over an extended period of time both before and after investing. Just as embedded journalists gain unparalleled insight into the military units with whom they are partnered, we believe our strategy leads to better investment decisions, better relationships with our founders and a better understanding of the industries in which we operate.
Our Embedded VC strategy dictates two absolute requirements be met before we can invest in a company. (1) We need to be in awe of the prowess and tenacity of the founding team and (2) We need to really like the founding team because we intend to be one of their closest relationships for the next 10 ish years.
(If we aren’t invited to weddings and baby showers we might feel like we are failing)
Invest in our vision of the future
As an investor you can choose to either drink from the fire hose of inbound deals, picking the deals that rise to the top or you can choose to think deeply about the world around you and go out looking for the companies with whom you want to partner. Chris Sacca from Lowercase Capital refers to the latter strategy as “playing offense” and Union Square Ventures refers to it as thesis based investment.
We believe that thesis based investment is the only way to consistently out perform the pool of venture capital firms. Consistently picking great companies from the ocean of startups formed each year is a Sisyphean task and one we are not arrogant enough to claim we can do. However, what I believe we can do is make a series of investment decisions in a tightly focused space based on a detailed understanding of where that space is today and where it will be 5-10-20 years from now.
One of the spaces I’m most excited about is transportation. You can see part of our theses around transportation in the article I wrote for TechCrunch: Driving the New American Century
Invest in honey badgers
It has become dogma in venture capital that a fund should expect only 1 or 2 deals to generate all of the returns for the firm. History bears this belief out. The problem, however, is if you embrace this dogma blindly you stop being able to see some of the best opportunities. Specifically, you stop seeing the companies who have both short-term paths to profitability as well as long-term game changing potential. It is too easy to conflate early opportunities for profitability with small opportunities.
I look for companies I call Honey badgers. These are companies that can be strong in all market conditions. As the video so eloquently puts it, “Honey Badgers don’t care.”
What this means from a practical perspective is we look for companies with major disruptive potential whose business fundamentals are also extremely solid. Swinging for the fences does not excuse a lack of discipline and it should not involve faith-based investment.
Invest in the future
In addition to the transportation of people, goods and services we also view real estate, fintech, space, CRISPR and computational biology as the fields of the future. Many of these industries are just now coming into their own and we believe their impact over the next 10 years will dwarf the impact mobile has had in the last 10.
In the coming weeks and months we will write about each of these industries and will try to share where we think the real opportunities are.
Be the team we want to invest in
The chance to build Gelt VC from the ground up as a world class, future-shaping enterprise was an opportunity I could not possibly turn down.
I would not be doing this with anyone but Keith and Damian, my friends and now my partners. They are some of the hardest working, sharpest and most genuine people with whom I’ve ever had the pleasure of working. They have built an investment firm that takes great care of all of its stakeholders from their humblest of tenants to their wealthiest of investors. I know that adopting the same ethos at Gelt VC will enable us to build a venture firm that is a true agent of change in the world.
As we launch this new enterprise we will endeavor each day to exemplify the kinds of founding teams we look for. We will be tenacious, we will do our work with intention, we will be conscientious in all that we do, we will be transparent and we will be humble.
I could not be more excited about the opportunities ahead. It is an amazing time to be alive.
If you are an entrepreneur I invite you to reach out. We’d love to hear more about your plans.
If you are a venture capitalist, we’d love to hear more about your strategy to see if we can work together.
If you are a prospective limited partner we’d love the opportunity to tell you our story.