Feb 23, 2018 · 26m · 20vc
20VC: The Fundamentals Of Optimising The Fundraising Process, SAFE's vs Priced Equity Rounds & Why Hiring Is Really A Big Data Problem with Chris Hutchins, Founder @ Grove & Former Partner @ Google 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, host Harry Stebbings interviews Chris Hutchins, founder and CEO of Grove and former Google Ventures partner, to explore actionable fundraising strategies, pitch frameworks, deal structuring, and data-driven hiring practices. Hutchins offers founder and investor insights on optimizing fundraising funnels, choosing priced equity over SAFEs, and scaling early-stage operational teams.
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 37.9% of the talking time here. How this is scored →
Harry as informed peer 2.9 Guest teaching 3.1 Guest disagreement 2.4 Harry pushing back 1.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:11 Chris directly rejects Wayne Chang's advice on hiring recruiters early
When Harry brings up Wayne Chang's advice that an internal recruiter should be one of a startup's first hires, Chris explicitly disagrees and explains why that strategy wastes money at the seed stage.
Hardest push from Harry ▶ 5:38 Harry challenges Chris's anti-fundraising advice regarding founder salariesHarry pushes back on Chris's claim that founders shouldn't raise money early by asking how young founders without personal savings can afford to live without VC capital paying their salaries.
Biggest teaching moment ▶ 11:09 Chris corrects Harry on name-dropping other VCs during fundraisingHarry asks if name-dropping other firms helps create leverage, but Chris shuts the tactic down completely, explaining that VCs talk to each other immediately and will verify rumors.
Harry holds his own ▶ 13:21 Harry cites Michael Deering to challenge SAFE structuresHarry demonstrates technical industry knowledge by bringing up Michael Deering's vocal dislike of SAFEs to lead into a nuanced discussion on equity round pricing.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Chris Hutchins' Background and Risk Tolerance | 2 | 2 | 1 | 1 | Harry introduces Chris Hutchins and asks about his career trajectory from Google Ventures to founder. Harry references Glossier founder Henry Davis regarding founder risk tolerance, setting up a warm, collaborative introductory dialogue. | |
| When and Why Founders Should Fundraise | 3 | 4 | 3 | 3 | Harry presses Chris on why founders shouldn't always raise VC money immediately, citing Mike McDermott from FreshBooks. When Harry asks how young founders without savings pay living expenses without VC, Chris reframes the premise by arguing founders don't need venture capital to pay themselves early on. | |
| Structuring the Pitch and Pitching Tactics | 3 | 3 | 1 | 1 | Chris walks through the tactical steps of preparing a pitch narrative and running a time-bound process. Harry shares his own frustration with poorly targeted cold outreach, aligning with Chris's advice on manufacturing warm intros. | |
| Optimizing Investor Interactions and Meeting Execution | 3 | 4 | 3 | 2 | Harry asks whether founders should be transparent about meeting other VCs and if name-dropping helps. Chris firmly shuts down name-dropping, noting that VCs back-channel constantly and transparency can backfire on the founder. | |
| Priced Equity vs. SAFEs and Preemptive Rounds | 4 | 3 | 2 | 2 | Harry cites Michael Deering's critique of SAFEs to probe priced equity vs. convertible instruments. Chris outlines why Grove chose a priced round and why super pro rata rights demanded by early investors can handicap future rounds. | |
| The Evolution from Seed to Series A | 3 | 3 | 2 | 2 | Harry asks about the distinction between Seed and Series A rounds and brings up macro questions about venture capital oversupply. Chris offers a balanced response, noting tech's expansion across all sectors justifies higher overall capital flows. | |
| Hiring as a Data and Funnel Problem | 3 | 4 | 4 | 2 | Chris explains hiring as a data funnel problem. Harry brings up a quote from Wayne Chang recommending an internal recruiter as an early hire, but Chris directly disagrees, arguing recruiters make little financial sense at the seed stage. | |
| Quick Fire Round with Chris Hutchins | 2 | 2 | 3 | 1 | In the quick-fire round, Chris shares contrarian views on crypto speculation and criticizes VCs who give disingenuous positive feedback to founders rather than direct rejections. |
Statements from this episode (12)
Hutchins takes minimal salary and relies on savings to build Grove
“Yeah, I would say relative to Silicon Valley, I probably have a low risk Risk tolerance. I'm not entirely investing my life savings in Bitcoin. I'm not a rabid angel investor. I think compared to the rest of the world, I'm probably pretty high risk tolerance i…”
Warby Parker and Casper warrant VC backing through supply chain innovation
“At first glance, you might say that a number of companies like Warby Parker or Casper traditionally wouldn't be venture backed companies because they're kind of traditional e-commerce product companies. But I think as you dive into the supply chain, you dive i…”
Hutchins: Founders Should Practice Series A Pitches for 40 Hours
“In advance of a Series A, you should be giving the pitch for about 40 hours of practice and rehearsal before you give it to the first investor.”
Hutchins: Founders should never name-drop other VCs during fundraising
“Oh, I think none. If I'm a founder, and I tell someone at VC or at GV, oh, you know, I just had this great conversation with this other investor. I'm going to be like, great, I'll call them and see what's really happening. VCs all know each other. They all tal…”
Hutchins: The specific VC partner matters far more than fund reputation
“I think ultimately what you're looking for as a founder when fundraising, assuming you have options, is someone you think will be a partner to you, and you know, I always say that the partner means much more than the fund, and so find out how you work together…”
Hutchins: High-leverage founders should slow fundraising cycles to vet board partners
“So if you're the founder and the deal time is really, really tight, and you feel like you need another two hours to spend with the partners at the three funds you're thinking about working with, you have all the leverage. I could see the allure of just rushing…”
Hutchins: SAFEs and convertible notes create distracting fundraising loops for founders
“Safes, convertible debt, they're all kind of based on future guesses. You kind of figure out the dilution later. It allows for this continual raising process that, you know, I know YC's talked a lot about that I think can be a huge distraction.”
Hutchins: Super pro rata rights for insiders block new lead investors
“If you are in a situation where the insiders have all of their pro rata rights, super pro rata rights, you get to a point that if you want to raise 20%, or you want to sell 20% of the company in your next round, and insiders are taking 15, it's going to be har…”
Hutchins: Preemptive funding rounds must price in six months of future growth
“I personally would want to make sure if someone wanted to preempt a round by six months, the round would need to be priced as if we were six months further along.”
Startup hiring requires a single leader and hundreds of candidate contacts
“Put one person in charge, and step one is just define the process and put someone in charge. If that person loves data even better, and just understand that it is a longer slog than I think anyone who's never been in charge of it realizes, and it might take yo…”