Kent Goldman

Kent Goldman

Founder, Upside Partnership

THIS CHAT HAPPENED ON May 03, 2016

Discussion

Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
Hi - I'm Kent Goldman, Founder of Upside Partnership. I've been a seed investor since 2008 which was before anyone started calling us seed investors. I was previously a Partner at First Round. Excited to be here - ask me anything!
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
When evaluating new potential investment opportunities, what are the top 5 questions you try to answer before making a decision?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@tomstocklein When I meet with a Founder, I'm trying to get to know them and understand what motivates them. So much in a start-up is mutable - except for the Founders. I want to understand what is driving their desire to do something which - honestly - will most likely end in failure. Do they have an understanding of what they are building that gives them a unique advantage? And then you test this knowledge. You try to understand whether or not they have a learning mentality. And you want to understand how they respond to criticism or viewpoints that contradict theirs. There isn't a set of 5 questions that provides a perfect path to these answers. Meetings are directed conversations not inquisitions. But one thing I do want to point out is that as a seed stage investor, I spend little time on product details for the sake of product details. That is all guaranteed to change by the time an investment is actually made.
Seenit Hunter
Seenit Hunter@seen_hunter
Investment opportunities are always risks to take.
Seenit Hunter
Seenit Hunter@seen_hunter
Great insight.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What are the most valuable skills and experiences you picked up during your time at First Round Capital that help you be a better investor at Upside today?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@tomstocklein One of the most beneficial things was that we saw so many companies go through so many things. The velocity of learning was pretty unparalleled in the venture business. But more than any experience was the opportunity to be mentored by people like Josh, Howard, Chris, & Rob, and to be learning alongside colleagues like Bill, Phin, and Brett.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
If you were on the other side of the table and had to launch a new product/app/service in 2016, what would you build?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@tomstocklein The right answer for anyone asking themselves this question is "Build the business you are uniquely suited to build." I try to take that approach to investing too. I think Founders, not investors, can see the trends before they happen. The Child's Mind is my approach - I want to see things with fresh eyes and an open mind. This is a longwinded way of saying, I try not to think about trends too much. If they are identifiable, chances are that it's already too late for a seed investor.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Kent, thanks for joining us today. What are some of your top tips for early stage founders looking to approach investors?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@ems_hodge This answer is a bit hackneyed but... Find a way to be networked into them. Thinking through the priorities of an investors day is pretty revealing. For example, my first priority is to support the Founders we've already backed and committed to support. The next priority is to *be present* for any meetings or calls with prospective Founders. After that, it's to be responsive to the qualified introductions. Somewhere after that is taking care of the "over the transom" introductions and emails. I wish I had more time to spend on them because I do believe that to have outsized returns, you have to find different companies than everybody else but...
Lesley Wu
Lesley Wu@deleted-407305
@kentgoldman @ems_hodge very hackneyed... -_-!!!
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What's the biggest value-add Upside provides for its portfolio companies other than financial capital?
Parker Thompson
Parker Thompson@pt · Startup Fanboy
You made a splash with an interesting model for sharing returns with your portfolio founders. How has that been working in terms of your ability to win deals and the dynamics within the portfolio?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@pt Some background for people who aren't familiar with Upside Partnership. We were among the first venture firms to share our returns with the Founders we back. In essence, the Founders become Partners in the fund. And if the overall fund does well, we should all do well together. When Upside launched, this aspect of the fund garnered a fair amount of press attention. Founders can better answer how the shared carry has impacted their decisions to work with Upside, but from the feedback I've received, the economics of this has had minimal impact. What stands out to Founders is what this represents. It's that they are viewed as Partners to Upside. In terms of our ability to invest in and support the Founders with whom we work, we're doing pretty well. Off of the top of my head, I can't think of a company in which we wanted to invest but found ourselves on the outside looking in. Some of this is that because the majority of the time, we have been the first institutional investor to commit to funding a team. Both of these "metrics" would make me nervous (are we missing great companies? if we didn't have such strong syndicate and follow-on partners. So I'm not sure that our unique structure has been a driver here. In terms of portfolio dynamics, it's still really early. We just now have a large enough group of Founders to be able to call it a "community" and there's much further to go before it can approach the level of something like the incredible First Round community. But I have heard from Founders that when they connect with one another they do feel a bit of extra engagement. We'll continue to share returns with Founders in our new fund. It's been great way to express our values.
Snah Desai
Snah Desai@s_haverford · Operations Analyst, ServiceTitan
how can someone like me, a recent college graduate, find career opportunities at Upside Partnership?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@s_haverford We're not looking to grow our team but if you are interested in being in venture become a student of start-ups. Work at them, learn from all the things that work - and even more of the things that don't, build a great network, and then do your best to manufacture serendipity. Also, if you ever get a job offer in venture, take it. Don't worry about title or comp. It's such a small opportunity that any opening is rare.
Snah Desai
Snah Desai@s_haverford · Operations Analyst, ServiceTitan
@kentgoldman Thank you so much for the thoughtful advices. I hope to run into you one day!
Vikash Singh
Vikash Singh@vikashshingh · I am Vikash Sharma, Co-Founder of Sparx
Hello Kent, how you doing? We have launched a website theme development business (wordpress basically) last year, check the website www.theemon.com Whats your suggestion for the seed funding of the same, we can make a next big wordpress theme together.
Vikash Singh
Vikash Singh@vikashshingh · I am Vikash Sharma, Co-Founder of Sparx
Also check my another startup www.inkyrobo.com what potential you find in this?
Carmen
Carmen@macclabs · travel writer, cofounder
Hi Kent, what to look out for / trickiest part for a startup to get funded by an investor and not tricked into a hardcore business deal? thank you
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@macclabs Not sure what you mean by "hardcore business deal" but I think most "bad" deals are often the result of miscommunication. Sit down with the other party, ask them what their goals are for an investment. Share with them you goals for your business. If they offer a term sheet, ask them to explain why they need / want anything for which they ask. And trust your Spidey Sense. If something feels off, walk away or brace yourself for a surprise at an unexpected time.
Syed Ahmed
Syed Ahmed@tabishis · Altimus Solutions, Inc.
Do you think MOOCs will eventually replace traditional learning, specifically tech focused learning? Do you invest in products that are focused on solving problems for MOOC students?
Syed Ahmed
Syed Ahmed@tabishis · Altimus Solutions, Inc.
What's that one enterprise product you think sucks and can be built better?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@tabishis What enterprise (or consumer) product can't be built better?
Mike Barash
Mike Barash@maringuy · founder & CEO, Knock Twice @knock2x
apoogies in advance, this one's pretty intense – who's your favorite office neighbor??
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@maringuy since you have been parking better... ;-)
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What have been some of the defining moments in your career to date?
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@ems_hodge Two big moments stand out to me: 1. Early in January 2008, I was working at Yahoo. One day, I woke to learn that Microsoft was attempting a hostile takeover of Yahoo. It was a bit of a dizzying day. In the middle of it, an (at the time) Philadelphia angel investor named Josh Kopelman decided to run an experiment to get a sense for how freaked out Yahoo employees were about this. It turned out that the experiment rubbed a lot of people the wrong way. Josh got lots of hate mail over it. I happened to think it was kind of interesting and funny, so I sent Josh a note that wasn't overly emotional. We hit it off over email, met for coffee on his next trip to San Francisco, and 6 months later I was offered a spot on the First Round team. It was / is an exceptional group of people coming together at a time when the seed world was just taking shape. Turned out that the note I sent to Josh was life altering. You can read more about his experiment here: http://redeye.firstround.com/200... 2. 2013 was a very emotional year for me. In early January, my father had passed away after his chronic leukemia unexpectedly became acute. In the weeks before he passed away, I really questioned whether I had it in me to steer my own life without his guidance and support. But I really didn't have a choice, my wife was pregnant with our second child who was due in November. As many people do, my reaction to all of these life changes was to do a lot of navel gazing, questioning, and doubting. During the same period, I saw some changes in the world of seed funding - rounds were getting bigger, elbows were getting sharper. Somewhere along the way, I started asking myself "if I were to start a seed fund today, what would it look like?" That was the beginning of a process that gave me the conviction to form Upside.
Kent Goldman
Kent Goldman@kentgoldman · Founder, Upside Partnership
@ems_hodge Should add that there were lots of humbling moments along the way... Instagram, Foursquare, Pinterest, and others all pitched me.