Hunter Walk

Investor at Homebrew

THIS CHAT HAPPENED ON August 08, 2017

Discussion

Hunter Walk@hunterwalk · Partner, Homebrew
Hi! You might know me from such social networks as Twitter (@hunterwalk) and, well, Twitter. I'm here to answer questions you may have about funding things (I cofounded seed stage venture fund Homebrew), making things (I used to work at YouTube, Google, Second Life), raising things (I'm a dad) and whatever else you think I might have a point of view about (POV not guaranteed). Let's do this! 11am: END OF SESSION. thanks for joining me on Product Hunt
Marius Chawa@mariuschawa · UX Designer @ Hewlett Packard Enterprise
Hi Hunter, thanks for joining us. Couple of questions 1) What are the top 3 things a pre-revenue startup must accomplish before you invest in them or even approach you? 2) How can we pitch you?
Hunter Walk@hunterwalk · Partner, Homebrew
@mariuschawa 1) a) articulate founder<>market fit - what is the problem you're trying to solve and why are you the right founding team to solve it. is the problem you're trying to solve (i) large, (ii) urgent and (iii) valuable. b) show me what minimally you've done to learn and de-risk the business -- ie what have you proved to yourself that this company is worth your time for the next 10 years, let alone my time and capital c) who is your customer and how well do you understand them/how to reach them 2) i answer every email sent to hunter@homebrew.co (so long as it looks like it was at least semi-personalized to me :) )
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@mariuschawa @homebrew @hunterwalk this is gold for anyone wanting to approach @homebrew
Marius Chawa@mariuschawa · UX Designer @ Hewlett Packard Enterprise
@hunterwalk thank you so much
Alfonso Guerra@huperniketes · Founder/CEO, Apokalypse Software Corp.
What is the biggest cause for loss of productivity at your portfolio companies?
Hunter Walk@hunterwalk · Partner, Homebrew
@huperniketes waiting for too much data to make a decision. probably followed next by redoing work because you made a bad decision using zero data. so basically, figuring out how to prioritize what you're trying to solve and then finding the minimum amount of data you need to make a reasonable decisions.
Alfonso Guerra@huperniketes · Founder/CEO, Apokalypse Software Corp.
@hunterwalk Even when you have sufficient data to make decisions, it's possible the team fails to correctly understand the decision, or go in the wrong decision. What would be the best way to make sure bad decisions along some point in development gets found out and corrected ASAP?
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
@huperniketes @hunterwalk does that mean thatvat some point there should be "performance iver perfection" approach?
Jed Christiansen@jedc · Founder, Seed-DB
Looking back, what were the biggest differences when making the jump from angel investing to venture investing? What benefits did you get from your angel investing experience? Were there habits or thought processes you had to break when you started investing via Homebrew?
Hunter Walk@hunterwalk · Partner, Homebrew
@jedc I made ~20 angel investments during the ~4 years before I started Homebrew, so it wasn't necessarily high velocity nor was it with the intent of proving I could be a good investor. Instead my motivation was to invest in friends who were starting businesses in areas that I was curious about but didn't think my work at YouTube would provide exposure to. The fact that it also turned out to be financially successful was a nice side effect :) That said, I did learn a few lessons that has helped me at Homebrew. On the upside, I was surprised that even though i was often the smallest line on the cap table, I was often the first call founders would make when they needed help on something. That suggested to me there was still ability to "add value" as an investor. On the downside (aka mistakes I made), there were three potholes I stepped into occasionally then which I avoid now with Homebrew: 1. investing in something solely because I want to build it - that's an operator's mentality, not an investor's mentality and would cause me to sometimes forget to evaluate the team sufficiently :) 2. ego trip! investing in a great idea but flawed team with the idea that I could coach them up 3. social proof - investing just because other smart people are investing but not developing my own opinion
Mike Bestvina@mbesto · Professional Utility Infielder
Hey Hunter - this is a question we talked about quite a bit in person recently and I think it's a good topic for lots of people considering starting a tech company - how do you determine if seeking venture funding is the right fit for you and your company? You and I both hear a lot about people blindly taking VC capital and realizing it was a mistake years later. How do entrepreneurs avoid this mistake?
Hunter Walk@hunterwalk · Partner, Homebrew
@mbesto hi mike! venture capital is a great vehicle to be able to forward invest in your business with investors who are willing to take a lot of risk, but it's a terrible vehicle if your main goal is solely to build a sustainable business. You either need to be a business that fundamentally will require a lot of capital to hit scale but if you successfully hit scale, will be worth a tremendous amount of money -or- are working with venture investors with a model that can productively collaborate with you on maintaining optionality in outcome (which is difficult to do as amount of capital raised and fund sizes both get larger on average).
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
Hunter, I'm 63. a semi-retired investment banker/vc (from the 80's-90's). right now I consult with a few companies around Fresno CA and also am a mentor at Fresno State for their Entrepreneurship Program. I want to get back in the vc game only as a outside scout, so to speak or consultant. what's the best way to get back in the game? most VC's have their core group and don't look for outside sources. The best part of this is I'm not looking to get paid. It's about the hunt/game and feeling good. I miss it to be honest!
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
Hi @markjohn1 if you're open to help a startup with minimal feedback/advice that would be awesome :)
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
@sam_cholera That would be great. You can email me at markjohn1@mac.com if you want?
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
@markjohn1 @sam_cholera same! If you are looking to help a startup... *raises hand*
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
@sam_cholera @taytus Always willing to lend a hand or some advice.
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@mac @markjohn1 Will do Mark, thanks, you're a gent
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
Do you feel newsletters are better than blogs? What's their future?
Hunter Walk@hunterwalk · Partner, Homebrew
@markjohn1 different animals. I love personal blogs but unfortunately most are subsumed by social media or "going professional" a personal blog post delivered via email to me isn't necessarily a newsletter just like a list of curated links makes a shitty blogpost (in my opinion) but can be a great newsletter
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
@hunterwalk I look at "The Skimm" as a newsletter to emulate in some ways. They don't have a blog, but they use the newsletter to act almost as a blog. That to me seems to be the best of both worlds?
Mark&Patti Clifford@markjohn1 · It's All Mishegoss "California Dreamn'"
@hunterwalk thanks for answering Hunter. I thought I had done that. Old Age sucks!
Jerry@jerry_hsiang1
What are some strategies to scale an asset-heavy (like you own/manage the inventory of assets) startup venture?
Hunter Walk@hunterwalk · Partner, Homebrew
@jerry_hsiang1 1. predictable payback period on assets - whether it's inventory or CAPEX, you need to have a handle on the payback period 2. debt financing to manage cashflows so you're not using equity financing (expensive!) as a way to handle ongoing cashflow ins and outs 3. margins that get better with scale. an asset-heavy business with margins that don't increase at scale is a tough biz to venture back
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
@jerry_hsiang1 @hunterwalk what about cutting down the transaction expenses?
Ellie Li@li_ellie · Co-Founder@Projections.io #DidYouSeeThat
I follow you on Twitter and you are super active there. How much time do you spend on Twitter every day? Where do you get your news/information/next books to read from?
Hunter Walk@hunterwalk · Partner, Homebrew
@li_ellie i use Nuzzel to catch content being shared on twitter and facebook, which allows me to use twitter as a more ephemeral stream. Prob 30-45 minutes a day, in short bursts. I try to read/respond to anyone who tweets at me. I'm a bit of an info junky. One tip - i don't read much in realtime - instead save things during the day to Pocket and binge read 2-3x a day, while deleting things that i no longer think are worth my time.
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
Why you don't list your email in your twitter profile? You don't want entrepreneurs to pitch you or you are one of those who only invest in startups after a warm intro?
Hunter Walk@hunterwalk · Partner, Homebrew
@taytus my email is in my blog (which is linked), homebrew's website and any # of places on the web. i respond to every initial email that's sent to me. and we've invested in companies where the intro was a cold inbound email. so not listing it in my twitter profile isn't intentional but in hindsight, maybe a slight speedbump for you to navigate :)
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
@hunterwalk Awesome! I'll email you today ^_^ Thank you!
Vitor@vit05 · tapan.ga
Hi, Hunter. What do you think will be the role of Audio in the coming years? There are several applications related to Audio for certain sectors like music, spotify, for messages, Whats app, and millions of apps for podcasts. But do you think there will be a Killer app that have everything related to audio and can reach 1 billion users in the next years? Do any of the companies you invest as Radio Public and Anchor have that potential? This WSJ[0] report shows that new people who are now coming online through mobile prefer to use video and audio, but companies seem to be targeting Live Video and Live Photo that are too expensive for this audience. Why? [0]https://www.wsj.com/articles/the...
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
Hi @hunterwalk, what is your approach to founders whonset aside some significant equity for the first important hires?
Hunter Walk@hunterwalk · Partner, Homebrew
@artashesvar i literally wrote about this yesterday :) https://hunterwalk.com/2017/08/0...
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
@hunterwalk gonna read it
Wisam Abdulla@realwisam · CEO @ Hazel
What % (roughly) of your rounds are convertibles vs priced?
Hunter Walk@hunterwalk · Partner, Homebrew
@realwisam almost all are priced. In Fund 2, where we've done ~14 investments, only one was a note and that was only because they raised enough on it already that it felt like a pain in the ass to convert at this point. But we really hate notes for a variety of reasons and when you're raising a $2m+ seed round including institutional investors, lots of the "benefits" of a note are mitigated anyway.
Wisam Abdulla@realwisam · CEO @ Hazel
@hunterwalk Would you care if the company had already rolled in some money on a SAFE while talking to micro-seeds like Homebrew? We're starting to raise our Seed in September and were thinking of taking in some easy money from Angels we're close to while working on getting micro-funds in -- mostly to get some momentum and take a bit of edge off. Thoughts?
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
My last question to @hunterwalk. What do you look at when cinsidering a #fintech invesent at @homebrew ? Besides team, market and other must things i mean domain specific.. thnx Hunter
Hunter Walk@hunterwalk · Partner, Homebrew
@homebrew @artashesvar i tell people to email Satya@homebrew.co with this question.... ;-)
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
If you pass on a deal, are you still open to do an intro if asked?
Hunter Walk@hunterwalk · Partner, Homebrew
@taytus you don't want intros from an investor who passed unless we know each other well and the intro was investment model based. otherwise it's a terrible signal.
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
@hunterwalk I pitched a VC last week, we are pre-launch and pre-revenue (MVP is ready), he made a warm intro to an angel, I'm meeting that angel tomorrow. Could be that we are too early for the VC but OK for the angel? or just as you said this is a bad signal?
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@hunterwalk Good luck tomorrow @taytus
Roberto Inetti@taytus · Engineer - Founder at ROBOAMP.com
Dr.Chirag@drchirag511
What is one book that you obsess and why ?
Hunter Walk@hunterwalk · Partner, Homebrew
@drchirag511 Harold and the Purple Crayon :) -- it's a children's book which for me is a metaphor for creating the world around you otherwise it's Influence - http://amzn.to/2hGsTDt
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
Can't wait for this. 1. What lesson have you learnt while being a VC, that you feel should be taught from school age upwards? 2. Best and worst thing about working in SV? 3. Top 3 traits/qualities of Hunter Walk & Satya Patel as a team? 4. One habit you'd like to break?
Hunter Walk@hunterwalk · Partner, Homebrew
@sam_cholera so many questions! 1. self-awareness 2. best: amazing talent, community with history of collaboration and risk-taking, beautiful part of the world; worst: increasing sense of entitlement and self-importance 3. loyal, customer focused, always evolving/improving 4. pecking at my phone when i'm with my kid
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@hunterwalk thanks for the reply
Marius Chawa@mariuschawa · UX Designer @ Hewlett Packard Enterprise
I live in Atlanta GA... Do you believe aspiring entrepreneurs should be in SF/Valley ecosystem to really learn what it takes to become a great/successful founder? Just like the the concept of if you want to be an actor, what are you doing in Alabama, move to Los Angeles. Just wanted to get your honest perspective.
Hunter Walk@hunterwalk · Partner, Homebrew
@mariuschawa i believe great companies can be started in many many geographies. The question I'd ask is, what type of company would benefit from being started in Atlanta vs anywhere else? When we invest outside of the Bay Area, we look for companies where the geo is a neutral to positive factor. For example, our NYC investments are often in fintech, fashion/commerce, media -- all NYC native industries.
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@mariuschawa @hunterwalk would you consider making investments in companies outside of US?
Hunter Walk@hunterwalk · Partner, Homebrew
Sam Cholera@sam_cholera · Founder @ iSpy Sport Search
@mariuschawa @hunterwalk where's the downvote button ;) lol. Thanks for reply though
Artashes Vardanyan@artashesvar · Love disruptive tech. Constant Learner.
Why are the VC-s so boring?
Hunter Walk@hunterwalk · Partner, Homebrew
@artashesvar so i've got a long answer to this. Basically all VCs are.... Oh, it's 10:59am and my session is over 👋
Venkat Mocherla@venkat_mocherla
Hunter - thanks for always being so generous in helping startups 1) Do you have any advice for startups that need to recruit engineers at scale? 2) What are your favorite podcasts and will you come on our Bay Area podcast :)
Hunter Walk@hunterwalk · Partner, Homebrew
@venkat_mocherla hi, thanks for the kind words 1) be able to articulate why your company is a great place for engineers, set aside equity, think creatively about skill/career develop opportunities for the people you hire, think about whether you can hire more junior engineers and train them up, build a great hiring pipeline and process 2) current fav podcasts: Our Fake History, Bill Simmons, Lore, Pod Save America, The Woj Pod, Well Made