May 8, 2018 · 32m · 20vc

20VC: Andy McLoughlin on The Benefits of Backing Unsexy Businesses with Non-Obvious Founders, How To Distinguish Between A Good Bridge Round and A Bridge To Nowhere & Whether VCs Really Do Add Value?

Andy McLoughlin · 22m spoken Harry Stebbings · 9m spoken

0:00 / 0:00

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 Andy McLoughlin, Partner at Uncork Capital, about his transition from startup founder to VC, the firm's rebranding from SoftTech VC, and his investment thesis on non-obvious founders and unsexy software markets. McLoughlin also provides actionable insights on VC value-add, Series A preparation, runway optimization, and bridge rounds.

Chapters · click to jump

1 statement ▾

McLoughlin's first angel check was $10,000 into Postmates in 2011 open →

3 statements ▾

Jeff Clavier bought SoftTech VC's original logo on 99designs for $100 open →

SoftTech VC missed hardware deals because founders assumed a software-only mandate open →

SoftTech VC was regularly confused with SoftBank after Vision Fund launch open →

1 statement ▾

Investors should not expect founders to be experts on the VC landscape open →

1 statement ▾

Silicon Valley remains the best place to incubate global startups open →

3 statements ▾

Startups should target 24 months of runway instead of 18 open →

Series A startups compete against all fundraising companies, not just sector peers open →

Uncork Capital avoids health startups requiring upfront FDA approval open →

3 statements ▾

Over 2,500 US seed funds have inflated Bay Area business costs open →

McLoughlin predicts Pipedrive will be worth hundreds of millions or billions open →

McLoughlin predicts Tray.io will raise its Series B in 2018 open →

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 30.6% of the talking time here. How this is scored →

Harry as informed peer 4.3 Guest teaching 3.3 Guest disagreement 1.5 Harry pushing back 2.7

speaking balance: gold is Harry, purple is the guest (3 minute bins)

Sharpest disagreement ▶ 20:34 Refuting blanket claims about bridge rounds

Andy politely but firmly rejects the blanket assertion that bridge rounds are bridge to nowhere, pointing out specific enterprise SaaS contract dynamics where bridges are justified.

Hardest push from Harry ▶ 11:07 Harry's contrarian stance on fundraising

Harry directly challenges Andy's premise that VCs should assist with fundraising, arguing it is a core competency that founders must possess.

Biggest teaching moment ▶ 19:15 Explaining Series A competitive reality

Andy educates Harry on Series A fundraising realities, explaining that startups compete against every fundraising company across all categories rather than just direct sector competitors.

Harry holds his own ▶ 20:19 Quoting Mike Maples on bridge rounds

Harry demonstrates deep industry familiarity by invoking Mike Maples' famous quote that bridges often lead to piers when pressing Andy on unsexy business risks.

the scores for every segment, with the reasoning behind each

Topic	Harry as informed peer	Guest teaching	Guest disagreement	Harry pushing back	Why
Andy McLoughlin's Path from UK Founder to West Coast VC	2	2	1	0	Harry welcomes Andy back and asks a open-ended question about his journey from a UK founder to a West Coast VC. Andy delivers a relaxed personal monologue detailing his angel investment in Postmates and transition into SoftTech VC.
The Rebranding Story: SoftTech VC to Uncork Capital	3	2	1	1	Harry inquires about the strategic drivers behind SoftTech VC's rebrand to Uncork Capital. Andy outlines brand staleness and confusion caused by the massive rise of SoftBank's Vision Fund.
How Early-Stage VCs Deliver Real Value to Founders	6	4	2	6	Andy explains how VCs assist founders with fundraising and candidate sourcing. Harry offers a contrarian pushback, arguing that fundraising is a core discipline founders must master rather than outsource, prompting Andy to refine his perspective.
Backing Non-Obvious Founders and Identifying Resilience	4	3	1	1	Harry asks Andy to define non-obvious founders and explain how he stress tests resilience in first-time CEOs. Andy gives concrete portfolio examples like ultramarathoners and former professional poker players.
Investing in Unsexy Businesses, Runway, and Bridge Rounds	7	5	3	7	Harry plays devil's advocate, probing Andy on long sales cycles, runway lengths, regulation, and citing Mike Maples' quote that bridge rounds lead to piers. Andy refutes blanket generalizations, explaining the financial mechanics of enterprise SaaS contracts.
Quickfire Round: Books, Seed Dynamics, Fatherhood, and Fritz	4	4	1	1	Harry runs through a rapid-fire series of questions covering book recommendations, seed market dynamics, and fatherhood lessons. Andy shares insightful perspectives on angel vs institutional VC risk tolerance and playful linguistic differences between the US and UK.

Statements from this episode (12)

Disclosure

McLoughlin's first angel check was $10,000 into Postmates in 2011

“And so I invested 10,000 dollars into this entity that became a company that turned into Postmates. And so that was my first ever investment.”

Andy McLoughlin May 8, 2018 ▶ 4:44

Assertion Contradicted

Jeff Clavier bought SoftTech VC's original logo on 99designs for $100

“Jeff had bought on 99 designs for like a hundred dollars or something back in probably 2005 or something.”

Andy McLoughlin May 8, 2018 ▶ 6:34

Disclosure

SoftTech VC missed hardware deals because founders assumed a software-only mandate

“Given that fairly large chunk of the investments we make these days are in hardware and frontier technologies, I think we actually were missing deals because people thought we would only invest in software.”

Andy McLoughlin May 8, 2018 ▶ 7:21

Disclosure

SoftTech VC was regularly confused with SoftBank after Vision Fund launch

“With the announcement of the Vision Fund and, you know, the huge investments into Uber and everything else that they've been doing, we were just getting confused on a pretty regular basis, which is kind of crazy considering that their fund is, I think, three o…”

Andy McLoughlin May 8, 2018 ▶ 7:39

Insight

Investors should not expect founders to be experts on the VC landscape

“I think that the art of fundraising and the art of pitching and the art of selling are all kind of bound up together. I just don't expect my founders to be experts in understanding the VC landscape.”

Andy McLoughlin May 8, 2018 ▶ 11:25

Opinion

Silicon Valley remains the best place to incubate global startups

“And I think if you believe that great entrepreneurs and great businesses can be born absolutely anywhere, but this is probably still the best place in the world to incubate them, then finding those teams and finding those people who maybe don't look, you know,…”

Andy McLoughlin May 8, 2018 ▶ 12:22

Insight

Startups should target 24 months of runway instead of 18

“Yeah, I mean, I think 24 is probably the right number. The issue with 18 months worth of runway is that by the time you close the funding ground, you get started, you might have 1011, 12 months before you need to think about fundraising again.”

Andy McLoughlin May 8, 2018 ▶ 19:15

Insight

Series A startups compete against all fundraising companies, not just sector peers

“And, you know, given that there is such a glut of seed money out there and so many companies being seed funded, yet this, you know, the number of Series A deals is effectively the same, if not lower year on year. What that means is, and I, this is the exact wo…”

Andy McLoughlin May 8, 2018 ▶ 19:28

Disclosure

Uncork Capital avoids health startups requiring upfront FDA approval

“Yeah, I mean, I think we stay clear of anything which is too highly regulated. I mean, we do a lot of look at digital health. We look at hardware and health, and in any of these areas, we try and find products that don't necessarily need FDA approval, in order…”

Andy McLoughlin May 8, 2018 ▶ 21:41

Assertion Contradicted

Over 2,500 US seed funds have inflated Bay Area business costs

“There, you know, there are now two and a half thousand plus seed funds operating in the U.S. With a large focus on being on the Bay Area. What that means is, you know, there are probably too many dollars chasing too few deals Which has driven the cost of both …”

Andy McLoughlin May 8, 2018 ▶ 23:33

Prediction Held up

McLoughlin predicts Pipedrive will be worth hundreds of millions or billions

“I think that's going to be a business which is worth many hundreds of millions or even billions of dollars in the future”

Andy McLoughlin May 8, 2018 ▶ 25:29

Prediction Didn’t hold up

McLoughlin predicts Tray.io will raise its Series B in 2018

“I think they're probably going to be raising their Series B this year, and I hear a lot of great things from great VCs who want to meet them.”

Andy McLoughlin May 8, 2018 ▶ 26:16

20VC: Andy McLoughlin on The Benefits of Backing Unsexy Businesses with Non-Obvious Founders, How To Distinguish Between A Good Bridge Round and A Bridge To Nowhere & Whether VCs Really Do Add Value?

How this conversation actually went

Statements from this episode (12)

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