Nicholas Chirls

Nicholas Chirls

Partner at Notation Capital, a pre-seed VC, & all round entrepreneur & investor

THIS CHAT HAPPENED ON December 11, 2015

Discussion

Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
Hey Product Hunt! My name is Nicholas Chirls and I've been building and investing in startups for the last 7 years or so in NYC. I currently run Notation Capital, a pre-seed venture capital fund. Look forward to jamming on all things startups as well as the (very) early stage tech ecosystem in NYC, which is where we spend our time and invest.
Jon Lax
Jon Lax@jlax · Product Design Director Facebook
@nchirls Hey Nick, can you be a VC and not be an asshole? In the job you need to say "no" more than you say "yes". You need to tell people their idea isn't worth investing in. How do you do that and remain such a nice guy?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@jlax Jon! Gosh I hope so. Many jobs require focus and discipline, which almost always means saying No a lot. Assume that's true for you as a designer too no? We wrote a blog post about saying no recently - https://medium.com/@NotationCapi... My approach has always been to say No as simply, thoughtfully and transparently as possible. And that's what I'd expect from others saying No to us, which we hear from founders and LPs all the time. Ideally, someone hears no, understands why, and still wants to do business with us in the future. This is a loooong game, decades long, and so we're insanely focused on making sure our reputations and Notation Capital brand stand for high integrity and respect at all times.
Harry Stebbings
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
@nchirls absolutely great to see a past @twentyminutevc guest again! My question is what is the biggest challenge facing you in the the micro vc market today and what are you doing to combat this challenge? Love to hear your thoughts!
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@harrystebbings Thx Harry. The biggest challenge for a new / small fund like Notation Capital is fundamentally differentiating what we do compared to the hundreds (thousands?) of funds out there. I think we're well on our way, but lots more to improve. We're still at Yr 1 in what will hopefully be a decades long journey. How the heck did you create such a good podcast so quickly? Answer me that! We're thinking about doing our own Notation Capital podcast in 2016...any advice?
Patrick L. Adams
Patrick L. Adams@patrickleeadams · Creator of @sparq_app and @LionBrowser
@nchirls I have a startup that would be perfect for "pre-seed" funding. What is the preferred way to get in touch with you and/or Notation Capital?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@patrickleeadams pretty easy - send us an email connect@notationcapital.com or nick@notationcapital.com ... we're pretty good about trying to get back to everyone promptly !!
Patrick L. Adams
Patrick L. Adams@patrickleeadams · Creator of @sparq_app and @LionBrowser
@nchirls awesome thank you!!
Cobby Amoah
Cobby Amoah@cobbyamoah · CEO, Peach
@nchirls What do you look for in founders before you make an investment and what are your thoughts on digital health as an industry?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@cobbyamoah love the digital health space. we've made some investments there already in Yr 1 and will make more in next few years. Some things we look for in founders (not comprehensive) - Real passion / drive for the problem area he/she is tackling - Ability to recruit and find amazing people to work on this problem too - No bullshit attitude and a person we can trust and we'd want to work in the trenches with / for - Clear communication skills
Darren Bounds
Darren Bounds@dbounds · CEO, Founder @ Breezy HR
Hey Nick. Pre-seed is an interesting category. There seems to be a recent shift in expectations around early stage SaaS investments with the traction requirements for seed & series A rounds being bumped up. Do you agree? If so, how does this impact the Pre-Seed fundraising?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@dbounds So..."pre-seed" means lots of things to lots of people, and really it probably isn't the best word to define an entire category of companies that haven't yet raised an institutional seed round. We use it for lack of a better word / idea :-)
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@dbounds What has happened, quite clearly, is that all of the traditional seed investors have raised much larger funds in recent years, and so folks that used to be doing $500k-$1M seed rounds are now leading $2-3M seed rounds, which aren't really seed rounds, because often they require full teams built out, legit product in market, traction / growth, etc etc.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@dbounds What we do, what we've always done, is work with founders at the very infancy of a project or experiment. That's what we'll do for a long time...and that's most often called pre-seed these days, which is really just a sub $1M round with a company that's generally pre-product market fit. But we also view pre-seed as more than just the size of a round...we also view it as a disciplined approach to running an early-stage experiment, with the hope that it might grow into something much larger. Most early stage Internet experiments don't take millions of dollars to get off the ground... We're one of the first of what I believe will be many pre-seed focused funds, in addition to angels and other investors that like working at this stage.
Alex Rosen
Alex Rosen@alexmr · Co-founder at Sense
sup @nchirls, what's the biggest differences you see between the SF and NYC tech scenes, especially in the early stages where you spend most of your time. How about the biggest similarities?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@alexmr Sup Rosen! Excited to see what's in the next Keds club :-) Have you thought about productizing it yet? We'll make millions!! Lol. Man, the differences between SF and NYC are still vast. Different worlds almost. - SF still has WAY more capital and venture dollars. We encourage the companies we work with to go out there and build relationships early. - Eng talent is still way deeper in valley. NYC has gotten to a place where it can scale an eng team to like 50+ without any major issues if the company is doing well, but beyond that is still tough. - NYC I'd argue has a much greater diversity of people...and maybe companies too. I still don't believe companies like Etsy, Kickstarter, Makerbot...could have been built anywhere else. I think NYC will continue to have category defining companies like this for many years to come, but not sure they get to Uber / FB , etc scale for another cycle or so...
Mohsen Khalkhali
Mohsen Khalkhali@mossibat · IoT investor @ Iratel Ventures
@nchirls what's your most interesting deal origination story?
Jack Smith
Jack Smith@_jacksmith · Serial Entrepreneur & Startup Adviser
Hi Nicholas - how long was the fundraising period for Notion Capital's first fund and how was that whole experience compared to your expectations?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@_jacksmith We raised the first Notation Capital fund ($8M) in about 6 months from a combination of institutional and individual LPs. It took us a little while to figure out and navigate the LP world...it is still quite opaque in so many ways.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@_jacksmith We heard a lot of No's, but that's almost always the case for any fundraising process. You really just have to find a handful of true believers, which we ultimately did. We're grateful to those folks for supporting us from the very beginning, even when it was a rough sketch, and we often play that same role for a lot of the founders we work with in the trenches.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@nchirls @_jacksmith Given how much capital there is in the market these days, you really have to take a hard look and develop a strategy, thesis or a way of working with founders that is fundamentally differentiated. I'm not sure we're quite there yet, but I think we get closer each day, week, and month we do this...
Jack Smith
Jack Smith@_jacksmith · Serial Entrepreneur & Startup Adviser
@nchirls thanks for the transparency in your answer
Ryan Hoover@rrhoover · Founder, Product Hunt
Hey, Nick! Congrats on launching your own fund. You're focusing on "pre-seed" stage companies/people. How come? What type of entrepreneurs do you look for?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@rrhoover Thank you Ryan! Been amazing to see Product Hunt evolve over last couple years. I remember when it was a Linkydink site :-)
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@rrhoover Thx re: Notation Capital. We closed the fund almost a year ago now, amazing how quickly that went. Doing a lot of year in review now and looking to future years.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@rrhoover We went out about 18 months ago to pitch a "pre-seed" fund to LPs. At the time, for most LPs, that was the first time they heard that word, so we got a lot of "No's" initially. We were convinced a year and a half ago of a few things: - Amazingly talented technical people here in NYC, really a critical mass for the first time - There was increasingly often a round of funding before institutional seed rounds, especially as seed rounds have gotten so much bigger - Given my partner, Alex Lines, and my background, we were well suited to work with strong technical teams at the very infancy of an idea, even before they're ready to raise institutional seed capital Fortunately we convinced a few great LPs and believers to give us a shot ... and here we are
Ryan Hoover@rrhoover · Founder, Product Hunt
@nchirls glad to hear, Product Hunt user #34! 😊
Phil Nguyen
Phil Nguyen@p_ngu · The Daily Water Cooler + Vettery
Yo @nchirls - Thanks for taking the time today! 1. Could you talk a bit about your experience with Betaworks? I'm constantly fascinated by their ever-evolving studio model, particularly how does the team allocate its focus between building, investing, and acquiring products/companies? 2. Kind of random but I remember you mentioned on Twitter like a year ago that you planned to open a bar in Brooklyn. Did it happen? What's your favorite beer, brewer, or style at the moment? I'm all about the sour beers right now, especially since summer has come back to NYC for this weekend.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@p_ngu ARGH! A bunch of friends and I indeed almost opened a bar in Brooklyn a couple years ago, we basically crowdfunded the capital we needed to do it...and then we lost the &**^%$ lease right at the last minute. So no, it didn't happen :-( That said, my buddy Josh opened an amazing brewery recently called Threes Brewing in Brooklyn - http://www.threesbrewing.com/ ... check it out. We also happen to work upstairs from Threes, so drop us a line!
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
Where is one place you want to visit that you haven't been before?
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@jacqvon New Orleans
Brian Donohue
Brian Donohue@bthdonohue · CEO, Instapaper
@nchirls let's go!
Justin F Harris
Justin F Harris@justinfharris · Co-Founder, Beehive
Hey @nchirls thanks for doing this AMA and congrats on your fund. 2 Questions for you: Does Notation Capital only invest in companies based in Brooklyn/NY? What did you see in the market to start a pre-seed fund vs a traditional seed fund? Thanks!
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@justinfharris We invest in NYC only for now. Hopefully that might change with future funds. pre-seed fits our skillsets and felt like a more interesting area from an opportunity : available capital perspective. as an investor, was tired of showing up to demo days and/or trying to squeeze into some crazy seed round. this stage is a place where we feel we can have a larger impact with the companies we work with, which is so much more fun!
Niv Dror
Niv Dror@nivo0o0 · VC at Shrug Capital
Hey @nchirls, thanks for joining! Curious what are the 2-3 apps on your home screen that we wouldn't expect? 🤔
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@nivo0o0 Hmmm...good question, think I need a homescreen refresh :-) That said, I've actually quite enjoyed this app called Pause recently - https://itunes.apple.com/us/app/... I often struggle with anxiety ... and I've tried all sorts of meditation, but nothing seems to stick. I like Pause because it's really just a few minutes a day, and the simple act of taking a few minutes to take a deep breath and focus on something unrelated to work, life, etc...I've found to be helpful. I try to do it in the mornings before I leave my apartment for work.
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@nivo0o0 what are the 2-3 apps you use I wouldn't expect?
Niv Dror
Niv Dror@nivo0o0 · VC at Shrug Capital
@nchirls I'll have to check out Pause! On my homescreen, Ditty is my new favorite app! It can be used to make things like this. Another is not on my homescreen, but I love FaceParty and Instant, which is used to shoot Instant GIFs :-)
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@nivo0o0 nice. will check out ditty. thanks for the rec!
Ben Tossell@bentossell · newCo
Hey @nchirls what is the craziest thing you've seen in a pitch?
Ben Tossell@bentossell · newCo
What are you favourite books :)
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@bentossell I've been reading all the books in the Elena Ferrante series - http://elenaferrante.com/. My fiance recommended to me. Love them. I read mostly fiction.
Theoharis Dimarhos
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
Hi! What are your thoughts on online schools/education? What are the components missing that would help them grow exponentially?
Ben Tossell@bentossell · newCo
What criteria is your default when assessing startups/founders? Are you pro-team team team as many others are? cc @msuster
Nicholas Chirls
Nicholas Chirls@nchirls · Partner, Notation Capital
@bentossell yes yes and basically...yes. what else is there at our stage?
Josh Cohen
Josh Cohen@jshchnz · Co-Founder, ThnkDev
Hi @nchirls how many employees do you guys have, and what do you think the best way to get into venture capital from startup life is?
Phil Nguyen
Phil Nguyen@p_ngu · The Daily Water Cooler + Vettery
Ooh, one more question in addition to the previous: what is an industry or technology that you feel has seen a lot of activity or interest but isn't ready for primetime? Alternatively, is there an industry or technology that you won't invest in and why? Thanks @nchirls!