AirTree Ventures

Brad Feld on assessing founders, investment themes and reading superpowers

By Paul Bennetts

paulbennetts.co

Brad is the kind of VC I look up to and try to emulate. “Tell me who your heroes are and I’ll tell you how you’ll turn out to be,” as Warren Buffett says.

To start, he’s an author. In fact, he’s written six books in an area he has the most expertise – startups. He is the author of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. It’s required reading for anyone considering venture investment. Or, for those who just want to talk shop. People love talking shop.

He’s a prominent investor. Brad was an early investor in Fitbit, Zynga, Harmonix and MakerBot. He co-founded Foundry Group in 2007 raising a $225m fund. Foundry Group has since raised 3 more venture funds. All $225m each in 2010, 2012 and 2013.

At Foundry, they believe in doing the work. They’ve never grown beyond their founding four partners. They have no junior people. They seek to understand the world and play inlong term thinking.

He reads more than anyone I know. Fourteen books in the last 6 weeks alone. He has reading super powers.

He’s married and has his personal life in order. In 2013, he co-wrote Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur with his wife Amy Batchelor.

Oh yeah, and he co-founded Techstars. I love that his accelerator program provides full transparency on their performance. Here is the results of every batch of companies that has gone through his Techstars program. Though, I wish they gave more aggregated data on valuations for each batch.

Paul: What is your system for assessing the capability of a founder?

Brad: I get to know them by doing things together. Rather than play an endless game of question and answer, I’m very focused on using their product, engaging in ways that we can learn about each other, and actually get to know each other. I also like to spend social time together, although not in a forced way.

Paul: I think the hardest thing to parse out is founders who give good meetings versus those who have deeply tested assumptions.

Paul: You play in some of the most interesting sectors for investment – how do you approach building expertise in these spaces?

Brad: When we started Foundry Group, we defined our approach as ‘thematic’. At the time the word theme was not being used, whereas today it is massively overused as to be almost meaningless. For us, a theme is an area that we believe has a 30+ year investment horizon. We go very deep within a theme, developing significant expertise that we believe allows us to quickly hone in on companies and products that will be interesting to us to invest in. The themes are not static – they evolve over time – based on our experience with them.

Paul: I completely agree. Most times when you ask an investor what themes are driving their investment decisions, they respond by citing sectors (internet of things, bitcoin, etc.).

Note from Paul: Foundry’s themes can be found at here.

Paul: What is the most interesting macro theme you are exploring now?

Brad: Human computer interaction. It’s the theme that fascinates me the most. It’s based on the premise that they way humans and computers will interact 30 years from now will be radically different than how they interact today, or how they interacted 30 years ago.

Paul: It’s fascinating to read Ryan’s post on HCI all the way back in 2008.

Note from Paul: In a nutshell, the way humans interact with computers 30 years from now will make the way we interact with them today look silly.

Paul: What do you think the majority of VCs do wrong?

Brad: Act like a crowd.

Paul: My view.. I think the ecosystem would benefit from everyone only being allowed to read TechCrunch once a month followed by a long walk in the woods.

Paul: What advice would you give to investors early in their track records?

Brad: Focus on playing a long term game. That’s the only one that matters.

Paul: You are a ferocious reader, what is your reading routine?

Brad: Reading is one of my favorite things to do, so I just do it. I don’t have a particular routine – I read often and anywhere. I generally read on a Kindle Paperwhite, which has hundreds of unread books on it. I just buy whatever interests me when I run across something and read whatever I feel like reading new.

Paul: And to finish what was the last book you read that has really changed your perspective (fiction or nonfiction)?

Brad: When Breath Becomes Air was spectacular.

I stayed up late for two nights reading it while in bed. As I put my Kindle on the bedside table I had tears in my eyes.

It might be the most powerful book about being human, being mortal, learning about, confronting, dealing with, and ultimately accepting one’s own mortality. It’s beautifully written – almost poetic in its rhythm – and aggressively real. There is no prognosticating, no rationalizing, no baloney – just real, raw feelings throughout the book.