Feb 13, 2017 · 25m · 20vc
20VC: Why We Are Valuation & Ownership Insensitive, Why We Do Not Take Board Seats & The Effects Of The Series A Crunch with Topher Conway, Co-Managing Partner @ SV Angel
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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, host Harry Stebbings interviews Topher Conway, Co-Managing Partner at SV Angel, about the firm's unique early-stage investment playbook, founder-first support philosophy, and approach to navigating board seats, valuations, and the Series A crunch.
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 39.6% of the talking time here. How this is scored →
Harry as informed peer 3.7 Guest teaching 2.7 Guest disagreement 0.7 Harry pushing back 1.9
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:19 Valuation insensitivity pushback
Topher pushes back against Harry's focus on ownership targets, stating they are valuation insensitive and that spending over five minutes discussing valuation indicates something is wrong with the deal.
Hardest push from Harry ▶ 15:55 Harry challenges portfolio construction economicsHarry directly challenges how SV Angel generates venture returns on $100k checks without strict valuation and ownership targets.
Biggest teaching moment ▶ 16:19 Topher reframes seed ownership mathTopher educates the host on seed power law outcomes, explaining that owning even a tiny percentage of an outlier success like Snapchat far outweighs early ownership sensitivity.
Harry holds his own ▶ 18:30 Harry leverages Mike Maples' bridge round frameworkHarry demonstrates industry expertise by citing Mike Maples' distinction between a true bridge round and a pier into the sea, challenging whether bridge rounds signal founder delay.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Topher Conway's Background and Path to VC | 2 | 2 | 0 | 0 | Harry asks standard background questions about Topher's early entry into venture and his framework for assessing founder grit. Topher shares anecdotes about his 8th-grade Napster investment and SV Angel's background checks without any friction. | |
| Pre-Seed Investing and SV Angel's Fund Strategy | 3 | 3 | 1 | 2 | Harry banteringly questions VC terminology around pre-seed and asks how SV Angel handles pivots and founder failure rates. Topher explains fund sizing strategy and notes their willingness to support founders through pivots, citing a 40 percent mortality rate. | |
| Seed Ecosystem Dynamics and Building Reputation | 4 | 2 | 0 | 1 | Harry demonstrates familiarity with Ron Conway's philosophy regarding reputation building and asks about co-opetition in the seed landscape. Topher emphasizes collaboration across the seed ecosystem and maintaining founder goodwill. | |
| Founder Mentorship and Avoiding Board Seats | 3 | 3 | 1 | 2 | Harry probes the delicate balance between being a friend and an investor to early-stage founders. Topher outlines SV Angel's deliberate strategy to avoid board seats to remain permanent founder advocates during contentious times. | |
| Strategic Board Formation for Growing Startups | 5 | 4 | 2 | 4 | Harry presses on fund mechanics, questioning how a $100k check size delivers required fund returns without ownership target discipline. Topher reframes the premise by asserting SV Angel is valuation insensitive, noting that a tiny stake in a huge winner like Snapchat drives the model. | |
| The Series A Crunch and Bridge Round Milestones | 6 | 3 | 1 | 3 | Harry quotes venture investor Mike Maples regarding bridge rounds versus piers to challenge whether bridge rounds signal milestone achievement or execution failure. Topher concurs with Maples' distinction and details when SV Angel participates in follow-on bridge financing. | |
| Quickfire Round with Topher Conway | 3 | 2 | 0 | 1 | Harry runs through quickfire questions on books, fund scaling, and recent investments. Topher discusses reducing fund size to stay nimble and highlights their investment in BetterUp. |
Statements from this episode (12)
Conway Made His First Angel Investment in Napster in Eighth Grade
“My first angel investment was when I was in eighth grade. It was in a company called Napster.”
Conway Claims eCal Created YouTube's First Real Episodic Content
“We made shows for YouTube. It was the first real episodic content on YouTube.”
SV Angel Receives 8 to 15 Referred Deals Daily
“We see on average eight to 15 companies per day referred to us all from within our network.”
SV Angel Intentionally Reduced Its Fund Size to Write $100K Checks
“And for us, that's our latest fund. We actually reduce the size of it so that we have the flexibility to invest whether it's pre-seed or seed, you know, so we can make that 100,000 dollar investment where it's really just the founders that we, that we're inves…”
SV Angel Sees a 40% Portfolio Failure Rate
“We have about 40% of our portfolio goes out of business and that's fine.”
SV Angel Writes $100K–$200K Checks and Never Leads Rounds
“Like I said, our checks are smaller. They're a hundred to 200 K checks. So we rely on all the other investors to participate in the round. We never lead rounds ourselves.”
SV Angel Refuses Board Seats to Maintain Founder Alignment
“We also don't take board seats. We think that, you know, we always want to align ourselves with founders and be the advocate for them. We think that at some point in the business boardroom will get contentious and founder will, and the board won't agree on som…”
Startups Should Wait Until Post-Seed to Construct Formal Boards
“You can always bring on angel investors and advisory board members earlier on in the life cycle of the company, but when it comes to really constructing a board, you know, doing that post series seed going into the series a, you know, that's probably when it's…”
SV Angel Is Valuation and Ownership Insensitive at the Seed Stage
“So we don't really think about it That much at all. Unless it's something totally out of whack or, you know, out of line with where the company is in the founder's background, that's probably the only time that it'll really play into our decision. Other than t…”
Valuation Caps Do Not Matter for Breakout Venture Hits
“You know, if the company's, if it's going to be a big, successful company, you know, if you're investing at a six million cap or an eight million dollar cap, it doesn't really matter.”
SV Angel Flags Deals if Valuation Talk Exceeds Five Minutes
“You know, if we spend more than, you know, we've always had this kind of internal rule is if, You know, if we spend more than five minutes talking about valuation with a founder, then something's wrong. Something's awry there.”
The Series A Crunch Was Overall Healthy for the Startup Ecosystem
“And, you know, one of the byproducts was it really forced companies to focus on their core metrics. What really happened in the, over the last couple of years is, you know, series a investors and B started really focusing on, you know, is this a good business?…”