Jan 2, 2017 · 28m · 20vc
20VC: Why Companies Going Bust Is Part Of The Plan, Why Most VCs Are Later Stage Than They Think & Why Venture Capital Is Humbling with Charlie O'Donnell, Founder @ Brooklyn Bridge Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, Brooklyn Bridge Ventures founder Charlie O'Donnell joins Harry Stebbings to discuss quantitative portfolio construction, seed-stage follow-on strategies, founder evaluation vs. fundraising mechanics, and regional VC ecosystem dynamics.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 33.1% of the talking time here. How this is scored →
Harry as informed peer 3.0 Guest teaching 3.9 Guest disagreement 1.7 Harry pushing back 2.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:38 Rejection of VC ecosystem fluency standard
Charlie directly rejects Harry's premise that founders should be expected to be in tune with the VC ecosystem, arguing that fundraising mechanics are distinct from operational skill.
Hardest push from Harry ▶ 17:18 Pushing on the risk of pitch-driven fundraisingHarry forcefully challenges Charlie's point, questioning whether decoupling fundraising performance from execution ability disadvantages the best company builders.
Biggest teaching moment ▶ 9:06 Demystifying fund return mathCharlie breaks down portfolio return mechanics for Harry, showing why modeling $250M exit averages creates a more realistic path to a 3x fund than relying on unicorn assumptions.
Harry holds his own ▶ 15:38 Asserting the investor evaluation standardHarry stakes out his own explicit framework, stating that founder knowledge of the VC landscape is a necessary precursor for his investment thesis.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Charlie O'Donnell's Venture Capital Career Journey | 1 | 1 | 0 | 0 | Harry welcomes Charlie back for his second appearance and asks for a recap of his career path. Charlie provides a straightforward narrative of his progression from GM Pension Fund to Union Square Ventures, First Round Capital, and starting Brooklyn Bridge Ventures. | |
| Overview of Brooklyn Bridge Ventures Fund Performance | 2 | 3 | 1 | 1 | Charlie politely clarifies his fund size figure ($15.03M rather than $15.1M) and responds to Harry's prompt on venture capital being humbling. Charlie explains the crucial distinction between decision-making processes and uncontrollable market outcomes. | |
| Portfolio Modeling, Returns, and Realistic Exit Targets | 3 | 5 | 2 | 2 | When Harry asks how Charlie copes with high failure rates, Charlie details his LP-style cash flow model. He educates Harry on why targeting $250M exits rather than $1B unicorns provides a grounded baseline to generate 3x fund returns. | |
| Evaluating Seed Stage Returns and Follow-On Strategy | 4 | 5 | 3 | 3 | Harry probes follow-on strategy and negative signaling risks. Charlie reframes the reality of Series A funds being majority later-stage capital and playfully rejects Harry's notion that lack of follow-on funding breaks founder confidence. | |
| Personal Branding and Ecosystem Differences: NY vs. SF | 5 | 6 | 4 | 5 | Harry asserts that founder fluency in VC dynamics should be a key precursor, but Charlie directly challenges this view by separating fundraising performance from operational talent. Harry pushes back, asking if this creates a structural flaw where great company builders fail to get funded. | |
| Consumer Brand Acquisitions and Market DNA Trade-offs | 4 | 5 | 2 | 3 | Harry quotes a prior guest on consumer startup acquisitions and asks if brand functions as IP. Charlie clarifies that incumbent giants have brand awareness but buy startups for speed and building DNA, offering an inside look at Ample Hills Creamery. | |
| Quick-Fire Round on Mentors, Learning, and Challenges | 2 | 2 | 0 | 0 | A collaborative quick-fire round covering Charlie's mentors, learning processes, and recent investment in Industrial Organic. Harry hosts efficiently without challenge or friction. |
Statements from this episode (13)
O'Donnell: Brooklyn Bridge Ventures targets eight to ten deals annually
“Basically, we do eight to 10 deals a year.”
O'Donnell: Brooklyn Bridge Ventures rejects startups that have raised over $750,000
“So basically, I have a rule that if you've already raised 750,000 dollars in a previous round, It's actually too late for me, and so, you know, we did napkins, and prototypes, and ideas, and founders, you know, all sorts of various versions of early, and you k…”
O'Donnell: Venture investors must separate decision quality from outcome control
“It's important to separate decisions and outcomes. Hopefully, you make all good decisions, but you can't control the outcome, and that's sort of the humbling thing, is that you can check off every which box you come up with in terms of decision making and scre…”
O'Donnell: A $15M fund needs $1B in portfolio value for 3x returns
“You have to create roughly about a billion dollars of total enterprise value to make a small fund like mine about a three-x fund”
O'Donnell: The average tech M&A exit is $250 million, not $1 billion
“When you look at the average tech M&A transaction, the average is not a billion dollar exit. The average is something like more like two 50.”
O'Donnell: Assuming billion-dollar exits in venture fund modeling is poor analysis
“To me, it's not a good analysis and not a good plan if I expect my winners to be billion dollar outcome.”
O'Donnell: Seed funds deploy 60% of their capital in Series B or later
“I think a lot of people don't realize that most of their funds are actually much later Right. So if you have a seed fund that makes its initial 200,000 to 500,000 dollar bet and seed round, and then follows on all the way through, if you do that math, probably…”
O'Donnell: Brooklyn Bridge Ventures allocates 80-90% of capital to initial rounds
“I will follow on, and anybody who's able to raise an outside round. If you can get somebody else, I will not lead an extra round, but if you can get somebody else to participate, you know, I will do a small amount of follow on across the board, and it's not go…”
O'Donnell: Pre-Series A investors heavily weight internal participation from seed backers
“Where I do think it plays is in the round, whether you call it institutional seed, or seed plus, or just seed, and maybe what I'm doing is pre-seed, whatever the case, this two to three million dollar round that sometimes happens before a series A, I think tha…”
O'Donnell: VC personal branding is essential in SF due to extreme deal competition
“So in San Francisco, where I happen to be visiting right now, I think personal brands and marketing that comes from sort of being public as a VC, it is important because it is extremely competitive here to get into deals.”
O'Donnell: Venture fundraising and company execution require separate skill sets
“There's a little bit of a separation between being good at venture fundraising, and being good at running a company, and it's over and above just being a good advocate for your company.”
O'Donnell: Bob Iger brought Ample Hills Creamery to Disney after ordering online
“I was having a conversation with Brian from Ample Hills Creamery, and he was sort of telling the story of how they wound up in, in Disney World, and they launched a retail location in Disney largely because the CEO of Disney, Bob Iger, Found them in a Wall Str…”